Activision has closed its only North American distribution centre, contracting a third-party to handle operations in the region.
Based in Fresno, California, the centre employed 50 staff all of whom have been laid off, Market Watch reports.
The trend towards digital sales has been steady. Last year the Entertainment Software Association released its annual report, Essential Facts About the Computer and Video Game Industry, which revealed that digital sales represented 74% of the US games market.
This shift is supported by SuperData which predicted that Destiny 2, published by Activision, would manage between four and five million downloads across PC and console in three months.
"It's clear to us (and many others) that console games will be 100% digital in the future, but the timing of this is hard to pinpoint," PiperJaffray analyst Michael Olson wrote in a December note to clients.
"It's important to keep in mind that in the midst of the continuing trajectory toward 100% digital full game purchases, the growth of digital add-on content continues; the positive of digital add-on content is it both drives a higher digital mix and creates incremental revenue."
However, an Activision spokesperson said that the closure was an effort to consolidate its warehousing operations, claiming it was unrelated to the shift away from physical sales.