U.S. physical video game sales in 2025 amounted to roughly $1.5 billion, the lowest “all-time tracked” figure in 30 years, per a report from Circana’s Mat Piscatella. While the figure on its own seems grim, there is a silver lining, as the 11-percent drop in physical video game spending from the year before also marks the “lowest rate of decline since 2021.”
But, there’s also a flipside to the flipside. Piscatella’s post on Bluesky follows Circana’s 2026 forecast report on February 11, which states that 2026 has “the potential to reach a new record high in consumer spending.” According to Circana, U.S. “video game hardware, content, and accessories” sales in 2025 reached $60.7 billion, a 1.4 percent total increase over 2024, and just shy of the $61.7 billion record set in 2021.
So, if 2026 is set to be a record high for U.S. video game consumer sales, yet 2025 was the lowest recorded point in physical video game media sales since 1995, what’s the disparity here? Circana’s report seems to indicate that shifts in consumer behavior, including an “accelerated adoption of cloud gaming” and the ever-rising popularity of subscription-based services like Xbox Game Pass and the PlayStation Plus Game Catalogue, may be to blame.
While Piscatella notes that the 11-percent dip in physical media sales is “far better than the -28% recorded in 2024,” adjusting the 1995 physical video game sales figures for inflation makes things look all the more grim, as the total inflation rate from 1995 to 2025 is roughly 113 percent.
Or, as Piscatella put in a follow-up post, there’s not much further for things to fall now that we’re this close to the bottom. “So yes, the rate of decline slowed. But that’s mostly because we’re nearing the bottom, and the launch of Switch 2 helped stabilize. There’s definitely something to be said for the desire to return to analog and non-connected devices, especially for Gen Z. But ‘dramatic shift’? Don’t see it.”