Sony Ends Physical Discs, Xbox Layoffs Loom, GTA 6 Union Push
Jun 28, 2026 — Jul 5, 2026 · 16d ago
The video game industry is navigating a seismic transition this week as platform holders prepare to abandon physical media in favor of an all-digital future. Meanwhile, corporate restructuring at Microsoft has left major first-party studios in limbo, while developers at Rockstar Games organize to fight systemic workplace issues ahead of the year's biggest release. These shifting dynamics highlight a rapidly evolving market where preservation, worker rights, and digital ownership are taking center stage.
Sony to Discontinue PlayStation Physical Discs by 2028
Sony Interactive Entertainment has stunned the gaming community by announcing plans to cease physical disc production for all new PlayStation games starting in January 2028 . The company has already begun repurposing its primary disc manufacturing facility in Thalgau, Austria, to produce optical microlenses instead, signaling a permanent shift in its long-term strategy . This transition has sparked intense backlash from players, independent retailers, and industry veterans like Hideo Kojima, who warned of a "frightening" future where players do not truly own their digital libraries .
Analysts expect the upcoming PlayStation 6 to launch as a digital-only console, while Microsoft is reportedly planning a disc-less next-generation console codenamed Project Helix . To ease the transition, Xbox is testing a "disc-to-digital" program to let players digitize their physical Xbox One and Xbox Series X collections . Meanwhile, consumers are rushing to buy the optional PlayStation 5 disc drive accessory, forcing Sony to limit purchases to one per customer due to high demand .
Microsoft Xbox Layoffs Threaten Arkane Studios and Undead Labs
Microsoft is preparing for a massive "Xbox reset" and a major round of layoffs that threaten several first-party developers under Xbox Game Studios . Reports indicate that Dishonored developer Arkane Studios and State of Decay 3 developer Undead Labs are facing potential closure, which could result in the cancellation of upcoming projects like Marvel's Blade. In a sudden management shift, MachineGames head Jerk Gustafsson has been appointed to take over leadership at Arkane Studios amid these turbulent times .
The restructuring has already impacted external partners, as Xbox pulled out of publishing IO Interactive's online fantasy RPG, Project Fantasy, forcing the Hitman developer to implement immediate layoffs . However, experimental projects like Hideo Kojima's Xbox-exclusive horror game OD and RPG specialist Obsidian Entertainment are reportedly safe from the ongoing budget cuts . In response to the impending cuts, unionized Xbox workers represented by the Communications Workers of America (CWA) are publicly demanding layoff protections .
Rockstar Games Developers Push for Union Recognition Ahead of Grand Theft Auto VI Release Date
UK-based developers at Rockstar North have officially applied for voluntary recognition of the IWGB Game Workers Union ahead of the highly anticipated November 19 release of Grand Theft Auto VI. Employees have accused the studio of baking mandatory crunch into employment contracts, ignoring a widening gender pay gap, and weaponizing fluctuating bonus payments to enforce compliance . Union members claim that up to a fifth of a worker's salary can be withheld through these bonus structures without justification .
Despite the internal labor struggle, marketing for the blockbuster sequel is ramping up. Rockstar Games and Sony have officially declared that the game "plays best on PS5," and pre-orders have already propelled the title to the top of the PlayStation Store charts worldwide .
Marvel Tokon Fighting Souls Blocked on Steam in 132 Countries
Sony Interactive Entertainment is drawing heavy criticism from the PC gaming community after blocking the upcoming release of Marvel Tōkon: Fighting Souls in 132 countries on Steam . The restriction stems from Sony's mandatory PlayStation Network (PSN) account linking policy, which prevents players in regions without official PSN support from purchasing the game . Despite the widespread purchase blocks on PC, the game's Steam store page remains visible to users in the affected countries, fueling further frustration among the community .
Developed by Arc System Works and published by Marvel Games, the four-versus-four tag fighter recently revealed its final launch roster at Evo 2026, including Blade, Loki, and Deadpool . The game is still scheduled to launch on PlayStation 5 and PC in less than two months, with an open beta test planned to go live soon .
Nintendo Switch 2 Showcases Splatoon Raiders and Dragon Quest XI S
Nintendo has shared extensive gameplay details for Splatoon Raiders, an upcoming single-player spin-off for the Nintendo Switch 2, during a dedicated Nintendo Direct broadcast . In a surprise twist, the game is structured as a single-player roguelite that blends the franchise's signature ink-splatting mechanics with randomized runs and deep character customization . Early previews have praised the title for offering a robust standalone experience for both beginners and series veterans .
Third-party support for the Nintendo Switch 2 is also ramping up, with Square Enix sharing technical details for the September release of Dragon Quest XI S: Echoes of an Elusive Age - Definitive Edition, which will feature dedicated "Performance" and "Quality" modes . Additionally, Good Smile Company announced that the party action game Hatsune Miku Starry Party is in development for PC and Nintendo Switch 2 . These announcements come as physical sales of Star Fox on Nintendo Switch 2 topped the UK boxed charts, proving strong early demand for the newly launched console .
