It will not shock you to learn that at the moment, folks in the U.S. are not super interested in purchasing brand new consoles.
This comes from Circana, which shared its July report on video game market sales in the U.S. According to the report, July 2026 was the worst July for video game console sales since July 2020, when the COVID-19 pandemic caused massive logistical challenges in stocking consoles on store shelves, resulting in a lack of inventory and thus a lack of sales. Total hardware spending dropped 29 percent year-over-year to $282 million, with the 2020 low reaching $163 million.
Unit sales were also down, dropping 39 percent year-over-year, whereas the average price of a new unit of hardware leaped 16 percent to $542. And all three hardware makers are hurting. Nintendo, admittedly facing a comparison to last year’s July which fell in the Switch 2 launch window, saw Switch 2 sales drop 51 percent. But PlayStation 5 unit sales were down 6 percent from last year and Xbox Series were down 18 percent.
“The market comparables continue to be impacted by the record-setting June 2025 launch of Nintendo Switch 2,” the report reads. “However, the challenges extend far beyond simple cyclicality. Higher hardware prices driven by the RAM and component crisis have significantly impacted the selling rates of both PlayStation 5 and Xbox Series, with a price hike for Nintendo Switch 2 hardware coming on September 1st, 2026.”
It seems unlikely matters will be improving any time soon, both with (as Circana mentions) the Switch 2 price increase looming and RAM being, essentially, gone. Analysts have been predicting further console price increases, too, and who knows if those prices will ever come back down? No one seems optimistic about it.
The PlayStation 5 was the best-selling console of the month in dollar sales, but the Switch 2 led in unit sales. The Switch 2 remains ahead of the original Switch in sales pace at the same time in both consoles’ life cycles by 11 percent.
Overall games spending dropped 10 percent year-over-year, thanks to both these declines in hardware and also significant drops in software spending.
