US video game hardware spending dropped to $282 million in July 2026, a 29% decline compared to the same month last year and the worst July for hardware spending since 2020, according to data from Circana analyst Mat Piscatella. The figure represents a 39% drop in hardware unit sales year-on-year, with the Nintendo Switch 2 seeing the steepest decline at 51%.
Hardware spending plummets amid rising console prices
Piscatella shared the data on Bluesky, noting that the $282 million spent on new video game hardware in the US this July is comparable to the early days of the coronavirus pandemic. In June 2020, four months after US lockdowns began, hardware spending was $163 million. The analyst attributed the decline to the ongoing component crisis that has driven up console prices, affecting the PlayStation 5, Xbox Series X, and Nintendo Switch 2.
The PlayStation 5 and Xbox Series X now cost at least £519.99 and £619.99 respectively, while the Nintendo Switch 2 is set to rise in price after just over a year on the market. Piscatella said the decline is clearly driven by how pricey game consoles are, which in turn is a result of the component crisis that also impacts the PC and mobile markets.
Xbox physical game sales hit 4% market share
In a follow-up statement to Kotaku, Piscatella added that physical Xbox game sales accounted for only 4% of all physical game sales in July. This figure comes amid speculation about Xbox's future with physical media, as Sony plans to discontinue disc-based games after 2027. The data lends credence to Xbox potentially following suit with Project Helix, promoting a digital-only future.
July was a quiet month for new video game releases, with the only major title being Halo: Campaign Evolved, a remake of the first Halo game that debuted on PlayStation 5. Despite being projected as the sixth best-selling game of July 2026 by Circana, it trailed behind titles such as the Assassin's Creed 4: Black Flag remake, EA Sports College Football 27, and Activision's PlayStation 4 and 5 ports of the first two Call Of Duty: Black Ops games. The Halo remake did not appear to significantly boost Xbox console sales.
PlayStation 5 and Xbox Series X/S sales decline
PlayStation 5 sales declined by 6% in July compared to the same month last year, while Xbox Series X/S sales dropped by 18%. Piscatella noted that Xbox sales are now so low they are barely worth counting. The Nintendo Switch 2 saw a 51% decline, but this is compared to its launch period in June 2025, and the only Switch 2 exclusive in July was the spin-off game Splatoon Raiders.
The overall hardware spending decline is expected given the Switch 2's successful launch last year, but the data underscores the impact of rising console prices on consumer demand. The component crisis continues to affect hardware availability and pricing across gaming, PC, and mobile markets.
