Xbox's recently introduced Disc-to-Digital service, designed to allow players to acquire digital licenses for their physical game collection, appears to be facing early challenges. Xbox Insider members have begun reporting that games from several major publishers are not compatible with the new feature, with users encountering messages stating these titles are "not participating in digital licensing."

Reports indicate that games from Sega, Ubisoft, Square Enix, and Bandai Namco are among those currently affected. These messages arise when users attempt to add digital licenses to their libraries after inserting the corresponding physical game disc. While many games are reportedly converting without issue, a consistent problem has emerged for titles released by these four companies.

This situation contrasts with Xbox's initial announcement of the Disc-to-Digital service, which was framed as a way to preserve players' physical game libraries in an increasingly digital market. The company stated that the rollout would be gradual, suggesting that some games may be added to the program at a later date. However, the specific wording of "not participating" and the consistent issues across multiple games from each publisher have led to player concerns that these companies may have chosen to forgo the service entirely.

Such an opt-out could have significant implications for players looking to transition to a discless console. For instance, owning a physical copy of a game like Kingdom Hearts III might not grant access to a digital version on a discless device without a repurchase through a digital storefront if Square Enix games are indeed excluded from the program.

Kotaku has reached out to Xbox, Square Enix, Sega, Bandai Namco, and Ubisoft for comment on the matter and will provide updates if responses are received.