Microsoft will likely soon follow Sony and stop the production of physical discs for Xbox games. But instead of leaving physical discs behind entirely, sources familiar with Microsoft’s plans tell me the company has quietly been working on a disc-to-digital feature that will allow Xbox owners to digitize their existing physical game collections.

Xbox employees recently started testing this new feature, after references to “enable Disc2Digital” appeared in the Xbox PC app code in May. I’m told that Microsoft’s disc-to-digital feature will work on Xbox One and Xbox Series X discs only, and not those for the Xbox 360 or original Xbox console.

Getting a digital copy of a game works simply by inserting a compatible disc and installing and playing the game. This will require a Microsoft account on an Xbox console and will grant a digital entitlement for physical games. This digital entitlement is tied to the specific disc, and it will move from account to account if you swap the physical game with a friend or log in to a different Xbox profile and try to play a disc-based game.

The digital entitlement for a physical Xbox game is similar to buying the title from Microsoft’s digital store. If the game is available on Xbox Cloud Gaming and you have a Game Pass subscription, you’ll be able to stream it. If it’s an Xbox Play Anywhere title, you’ll also be able to access it on PCs and handhelds.

The Xbox disc-to-digital feature will also work with discs that come bundled with a console and multi-disc titles, providing access to everything the disc usually offers, including downloadable content. Some Xbox One discs might not work with this new feature, though. “It all depends on how and when the disc was manufactured and it may not have the features we need for this program,” warns Microsoft to its internal Xbox testers.

Discs will still work after they’re digitized, and you’ll only lose a digital entitlement if you loan the disc to a friend or sell the disc to someone else. Microsoft is currently testing this new feature internally, and I expect we’ll hear more about it in the coming months.

I understand Microsoft hasn’t fully finalized whether the next-generation Xbox, codenamed Project Helix, will ship with a built-in disc drive, but if Helix is disc-free, the feature could be essential for existing Xbox owners wanting to digitize their game collections in time for future Xbox consoles.