Insert the disc into the console, start the game, and the disc will be exchanged for a digital version of the rights - you no longer have to worry about the disc getting scratched or the console not being able to read it. Microsoft announced the details of this new feature on Xbox Wire, which will be open to Xbox Insiders testing on August 31. Officials said that "thousands" of games will be supported, including "most" Xbox One and Series X disc games.
The way it works is straightforward: players insert a supported disc into Xbox One or Xbox Series X, launch the game, and receive digital benefits. Once claimed, the game will have the benefits of the digital version, including Xbox Play Anywhere cross-platform play and supported Xbox Cloud Gaming cloud streaming, while the physical disc itself "continues to work as usual" - as Microsoft originally described it.
According to a report by The Verge in July this year, this feature will not be included in Xbox 360 and original Xbox games, at least not initially. The report also mentioned that players do not need to keep the disc in the console after obtaining the digital version, but the disc will be bound to that digital license: if someone with another Xbox account puts the same disc into their console in the future, the license will still be transferred.
This design is equivalent to closing a loophole - players cannot keep the digital version for themselves, and then transfer the disc to a friend without letting the other party spend additional money to buy it. On the other hand, normal second-hand trading and lending are not restricted, and players can still trade or lend physical games they have played to friends.
This feature is particularly interesting in the current context: Sony earlier announced without warning that PS5 disc games will be discontinued after January 2028, making the future of physical games a hot topic in recent months. Microsoft has not disclosed its long-term plans for its optical disc strategy, but it is generally believed that the next-generation console, code-named Project Helix, will not be equipped with an optical disc drive. If this is the case, the disc-to-digital function will become a way for existing Xbox players to convert their physical collection into digital inventory for easy taking with them before upgrading to a new console. It is currently unknown whether Sony will launch a similar mechanism.