The future of physical video games has been a hot topic recently, fueled by Sony's announcement that it will stop making disc-based PS5 games after January 2028. Microsoft has now unveiled a digitization feature allowing players to create digital copies of their physical games. It enters testing on August 31 for Xbox Insiders.

Microsoft said "thousands of titles" will be supported at launch, including most disc-based Xbox One and Series X games. Players can claim a digital entitlement by inserting a supported disc and launching the game. Once claimed, they can use digital benefits like Xbox Play Anywhere and Xbox Cloud Gaming, while the disc continues to work as before.

Xbox 360 and original Xbox games won't be part of this program at launch. The disc is bonded to the digital license, so if someone with a different Xbox account uses it, the license transfers to that account. This prevents sharing without purchase but still allows trading or lending discs.

It seems unlikely the next Xbox (Project Helix) will have a disc drive, giving current owners time to digitize libraries. Sony's plans remain unclear.