Console sales slump continues
According to analyst figures, July 2026 saw the lowest amount transferred for the month since 2020, a trend highlighted by Mat Piscatella, senior director and video game business advisor at Circana. Circana data shows hardware spending fell to a July low not seen in six years, echoing the 2020 dip.
Supply constraints and pricing pressure
Piscatella notes that the challenges go beyond simple cyclicality. Shortages of components, especially RAM, are driving up prices as data centers consume much of the supply. The upcoming launch of the Nintendo Switch 2 in June 2025 has already set a high bar, and a price increase for the Switch 2 hardware is scheduled for September 1, 2026.
Impact on major consoles
The shortage and price hikes have hit PlayStation 5 and Xbox Series sales hard. Xbox reported a $1.6 billion loss over the last fiscal year, while Sony says the PS5 is lagging behind the PS4 at the same stage of its lifecycle. Overall hardware sales are down 39% compared with July of the previous year, and the average system price has risen 16%. The premium PS5 model now costs $899.99, with the cheaper version at $599.99, making the investment difficult for many consumers.
Looking ahead
With GTA 6 on the horizon, retailers expect a sales boost during the Christmas period and into the next year. However, the question remains how much those gains will offset the broader market slowdown. Meanwhile, PlayStation is reportedly reworking the Horizon Hunters Gathering live service into a smaller, more traditional co‑op game after underwhelming playtests.
