The US console hardware market just posted its worst year in more than a decade, and the numbers are blunt. Xbox hardware unit sales in the United States fell 33% year over year for the 2026 period running through August, while PlayStation hardware sales dropped 25% over the same stretch, according to Circana’s US Retail Tracking Service. The decline marks an all-time low for Xbox hardware sales in the US and the weakest PlayStation showing since 2013. Both drops arrive while console prices have climbed to record highs, with the Xbox Series X disc model now priced at $799.99 and the PlayStation 5 Pro at $899.99.
The figures, first reported by Circana analyst Mat Piscatella and picked up by outlets including Tom’s Hardware, paint a picture of a console business squeezed from two directions at once: shoppers pulling back as sticker prices rise, and manufacturers raising those prices in response to a memory and storage component shortage that has rattled the entire consumer electronics industry in 2026.
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Xbox and PlayStation Hardware Sales Hit New US Lows
Circana’s year-to-date tracking through August 2026 shows Xbox hardware unit sales down 33% compared with the same period in 2025, a decline the firm says represents an all-time low for the platform in the US market. PlayStation hardware fared somewhat better in relative terms but still posted a 25% year-over-year drop, enough to push the brand to its lowest US unit-sales level since 2013, according to Push Square.
Both figures track unit sales, not revenue, which matters because average selling prices moved in the opposite direction. Fewer consoles sold at meaningfully higher prices is the core tension running through this entire story. Circana’s tracking service pulls from US retail point-of-sale data across both physical and online channels, and this result covers January–August 2026 in the US rather than serving as a worldwide Microsoft figure, making it one of the more reliable third-party gauges of how hardware is actually moving off shelves rather than how many units manufacturers report shipping to retailers.
This isn’t an isolated blip for either platform. The decline follows a broader pattern tracked across 2026 gaming hardware, including the game hardware sales slump to a 13-year low as DRAM prices climbed throughout the year. What’s new in the October reporting is the scale and the explicit framing from Circana’s own analyst that this is the worst the category has looked in decades.
Circana’s Mat Piscatella Breaks Down the Numbers
Piscatella, who serves as Circana’s video game industry analyst, shared the year-to-date figures publicly on October 9, 2026 and did not soften the framing. “For 2026 YTD ending August, Xbox hardware unit sales are down 33% versus a year ago in the US, while PlayStation hardware units are 25% lower,” Piscatella said, according to Video Games Chronicle.
He followed with an even starker characterization of where each platform sits historically. “Xbox YTD US hardware unit sales are at an all-time low, while PlayStation is at lowest point since 2013,” Piscatella said, according to GamesRadar+. For context, 2013 was the year both the PlayStation 4 and Xbox One launched, meaning PlayStation’s current US sales pace is weaker than the pre-launch lull that preceded an entirely new console generation.
Piscatella also addressed the pricing side directly, noting that the average price a consumer paid for a new Xbox console in 2026 year-to-date through August hit $529, 26% higher than a year earlier, while the average PlayStation console sold for $597, up 20% from the prior year. He added a blunt assessment of the moment: “Both prices are at all-time US highs. Price sensitivity is becoming a real problem,” per GamesRadar+. Those average figures blend older, cheaper SKUs still on shelves with the pricier current models, meaning the true cost of a new flagship console has risen even faster than the blended averages suggest.
Why Console Prices Keep Climbing: The Memory Shortage Behind It
The price increases are not happening in a vacuum. Reports tie the hikes to an ongoing shortage of memory and storage components, as demand from AI data centers has pulled manufacturers like Samsung, SK Hynix, and Micron toward specialized memory used in AI infrastructure and away from the consumer-grade chips that go into game consoles, PCs, and phones. That reallocation of manufacturing capacity has tightened supply for the DRAM and NAND flash that every modern console depends on for system memory and storage.
Modern consoles lean on memory for more than just loading screens. Xbox Series X and PS5 Pro both use unified memory architectures where the same pool of RAM handles system operations, graphics processing, and game asset streaming simultaneously. When the cost of that memory rises, manufacturers face a choice between absorbing the hit to their margins or passing it to consumers. Microsoft and Sony have both leaned toward the latter in 2026, following similar moves across the PC hardware market, including the 20.1% drop in PC shipments tied to the same DRAM price surge and the 200% jump in GPU memory prices that pushed the Radeon RX 9070 GRE to $529.
What the available reporting does not establish is a precise breakdown of how much of each price hike traces to memory costs specifically versus tariffs, logistics, or other input costs. Circana’s figures document the outcome, higher average prices and lower unit sales, without isolating memory as the sole driver. Still, the timing lines up closely enough with the broader 2026 memory crunch that most industry coverage treats it as the dominant factor.
Xbox Series X Price Timeline: From $499 to $799.99
Microsoft raised the US price of the Xbox Series X disc model to $799.99 effective August 1, 2026. That’s a substantial climb from where the console started. When the Xbox Series X launched in November 2020, it carried a $499.99 price tag, positioning it as a premium but still broadly accessible flagship next to the cheaper Series S. Six years later, that same tier of hardware costs 60% more in nominal dollars. The August 1, 2026 pricing also put the Xbox Series X Digital Edition at $749.99, the Xbox Series S 512GB at $499.99 and the Xbox Series S 1TB at $599.99, while the 2TB Series X was reported as discontinued, leaving the listed Series X configurations without it.
| Console | Launch Price | Launch Date | 2026 Price | Increase |
|---|---|---|---|---|
| Xbox Series X (disc) | $499.99 | November 2020 | $799.99 (Aug. 2026) | +60% |
| PlayStation 5 Pro | $699.99 | November 2024 | $899.99 (Apr. 2026) | +29% |
| Nintendo Switch 2 | $449.99 | June 2025 | $499.99 (Sept. 2026) | +11% |
The timing of the August hike is notable because it landed in the back half of the Circana tracking window, meaning the full 33% year-to-date sales decline for Xbox predates the most recent price jump. If US shoppers were already pulling back before the Series X crossed $800, the September and October sales figures become an important early signal of whether demand erodes further once the higher price has had a full quarter to settle into the market.
PS5 Pro’s Climb to $899.99 and What It Means for Sony
Sony’s increase came earlier in the year, with the PlayStation 5 Pro moving to $899.99 on April 2, 2026, when Sony’s reported US recommended prices also became $599.99 for the Digital Edition and $649.99 for the disc model. Sony’s storefront name for the current model is reportedly “PlayStation 5 Pro Console – 2 TB.” That price point puts Sony’s flagship within $100 of the Xbox Series X and firmly into territory once reserved for high-end gaming PCs rather than living-room consoles. Sony has previously faced criticism for the PS5 Pro’s premium positioning relative to the base PS5, and the April increase widened that gap further.
Despite the price increase, PlayStation’s 25% sales decline was smaller than Xbox’s 33% drop, which suggests Sony’s broader console lineup, including lower-priced PS5 variants still on shelves, is doing more to cushion the blow than Microsoft’s lineup is managing on the Xbox side. That relative resilience lines up with ongoing reporting on PS5 Pro supply, including the PS5 Pro shortage that has pushed refurbished unit prices up 55% to around $1,399 in secondary markets, a sign that demand for the premium Sony console has not collapsed entirely even as new-unit sales volume falls industry-wide.
Microsoft’s Own Earnings Confirm the Slide
The Circana figures are not the only confirmation of Xbox hardware’s rough year. Microsoft reported Xbox hardware revenue down 29% in July–September 2025 and down 32% in October–December 2025, and its own fiscal year 2026 third-quarter investor materials state plainly that Xbox hardware revenue decreased 33% in January–March 2026, driven by lower volume of consoles sold, a figure disclosed directly by Microsoft’s investor relations page. That the company’s own reported revenue decline matches Circana’s independently tracked unit-sales decline almost exactly lends weight to the third-party data and removes any ambiguity about whether the slump is a sampling artifact of Circana’s retail panel.
Microsoft has increasingly framed Xbox’s future around services and subscriptions rather than hardware unit volume, pointing to Game Pass subscriber growth and cross-platform software revenue in recent earnings calls, even as Microsoft’s fiscal-year Xbox revenue fell 7% to $21.79 billion in June 2026. A 33% hardware revenue decline tests that framing directly, since it raises the question of how large an installed base Microsoft can sustain for exclusive titles and first-party releases if fewer new consoles are entering US households every year.
How Bad Is “Worst Since the Early 80s”?
Piscatella’s broader assessment of the US hardware market extended beyond either individual platform. He described the current conditions as the US hardware market’s most precarious position since the early 1980s, a reference point that predates the modern console industry entirely and instead evokes the 1983 video game market crash that wiped out dozens of publishers and hardware makers before Nintendo’s NES helped rebuild the category later that decade.
Invoking that era is a deliberate signal that this isn’t viewed internally at Circana as a routine mid-cycle slowdown. Console sales naturally dip between major hardware refreshes, but the current decline is happening while all three major platform holders have active current-generation hardware on shelves, not while the market is waiting on a next-generation launch. That distinction is part of why the framing has drawn attention from outlets well beyond the usual gaming trade press.
It’s worth noting precisely what is and isn’t confirmed in the current reporting. The characterization that the broader console market has “craters” is commentary built on top of the Circana figures rather than a separate measured statistic. Likewise, while Xbox’s decline is described as an all-time low for the platform’s US unit sales, that framing applies to the Xbox brand’s sales performance broadly rather than to a specific claim about the Xbox Series X model’s sales relative to the original Xbox console, which launched in November 2001, 25 years before this reporting.
Xbox vs PlayStation vs Nintendo: Comparing the Damage
Laying the three major platforms side by side shows just how unevenly the memory shortage and resulting price hikes have landed. Nintendo’s Switch 2, which only launched in June 2025, has so far absorbed a comparatively modest 11% price increase, moving from $449.99 to $499.99 in September 2026. That’s a far smaller jump than either Xbox or PlayStation have seen on their premium hardware, likely because the Switch 2 relies on a different, less memory-intensive hardware configuration than the Series X or PS5 Pro.
| Metric (US, 2026 YTD through August) | Xbox | PlayStation |
|---|---|---|
| Year-over-year unit sales change | -33% | -25% |
| Historic benchmark | All-time US low | Lowest since 2013 |
| Average price paid | $529 | $597 |
| Year-over-year price increase | +26% | +20% |
| Flagship model price | $799.99 (Series X) | $899.99 (PS5 Pro) |
The comparison also reframes the ongoing hardware rivalry that’s played out across comparisons like the Steam Machine vs PS5 Pro vs Xbox Series X performance gap. Valve’s hardware has entered the conversation as a genuine alternative at a moment when both Microsoft and Sony are asking US buyers to pay more for comparatively modest generational upgrades, and Steam’s existing PC library gives it a value pitch that neither traditional console maker can easily match on price alone.
Market Impact: What This Means for Publishers and Retailers
A shrinking pool of new console buyers has direct consequences for the software side of the business too. Game publishers plan release schedules and marketing budgets around expected installed base growth, and a slower pace of new Xbox and PlayStation hardware entering US homes means a smaller pool of brand-new owners looking to fill out their game libraries. That dynamic compounds pressure that’s already visible elsewhere in the industry, including the wave of cuts detailed in coverage of Xbox layoffs that have hit 5,750 positions amid fears of further cuts across the industry.
Retailers face a related squeeze. Higher average selling prices typically mean fatter per-unit margins on hardware, but if overall unit volume keeps falling, that margin gain can be offset by lower foot traffic and fewer attached accessory and game sales at the point of purchase. Retailers that built their holiday staffing and inventory plans around historical console sales patterns may need to recalibrate expectations for the fourth quarter of 2026, particularly if the price increases continue to suppress demand through the critical holiday shopping window.
The Chip Shortage Ripple Effect Across Gaming Hardware
Consoles are far from the only gaming hardware category absorbing the memory shortage. The same supply pressure has pushed up prices across handhelds, graphics cards, and PCs throughout 2026, with DRAM scarcity cited as a factor in the broader decline to a 13-year low in overall game hardware sales. That overlap suggests the console slump isn’t a story confined to Xbox and PlayStation specifically, but rather one symptom of an industry-wide component crunch that traces back to competing demand from AI infrastructure buildouts.
The knock-on effects extend to PC gaming hardware as well. Graphics card memory has followed a similar price trajectory, and broader PC shipment data has already reflected the squeeze, with market tracking showing PC shipments dropping 20.1% in the third quarter of 2026 as DRAM prices continued climbing. For console makers, that means there’s little relief in sight from substituting one memory-hungry product category for another, since the underlying supply constraint touches nearly every device with a RAM chip inside it.
Predictions: Where Console Pricing Goes From Here
Based on the current trajectory of memory pricing, manufacturer earnings commentary, and Circana’s tracking data, several outcomes look increasingly plausible heading into 2027.
- Expect at least one more round of regional price adjustments outside the US before the memory shortage eases, following the pattern already set by the April PS5 Pro hike, the August Xbox Series X increase, and the September Switch 2 adjustment.
- Holiday 2026 bundle promotions are likely to lean more heavily on included games and subscription credits rather than direct price cuts, since manufacturers have little room to discount hardware while absorbing higher component costs.
- Microsoft’s continued emphasis on Game Pass and cloud streaming will likely accelerate if Xbox hardware unit sales stay depressed into 2027, since software and subscription revenue are increasingly carrying more of Xbox’s financial weight.
- Secondary and refurbished console markets, already showing elevated prices for hardware like the PS5 Pro, could see continued price firmness as budget-conscious buyers look for alternatives to new-unit pricing.
- If memory prices begin normalizing in 2027 as AI infrastructure buildouts mature, console makers will face pressure to walk back at least some pricing, though companies have historically been slow to reverse console price increases once implemented.
None of these outcomes are guaranteed, and Circana’s own data shows how quickly conditions can shift within a single year. But the combination of a historic sales decline and record pricing creates unusual pressure on both Microsoft and Sony to find some kind of offsetting move before the 2026 holiday season closes out.
What This Means for Holiday Shoppers
For anyone shopping for a console this holiday season, the practical takeaway is that prices are unlikely to drop significantly before year’s end. With average selling prices already up 26% for Xbox and 20% for PlayStation year over year, and with component costs showing no clear sign of easing, buyers hoping to wait out a holiday discount may be disappointed. Shoppers focused purely on value may find more competitive pricing in the handheld and PC gaming space, where alternatives like Valve’s hardware lineup are positioned to undercut the big two console makers on upfront cost even as they too contend with the same memory market pressures.
Bundle deals that include extra storage, controllers, or subscription credits are likely to be the primary lever manufacturers and retailers pull this holiday season rather than straightforward price cuts, since neither Microsoft nor Sony appears positioned to reverse 2026’s price increases in the near term.
Frequently Asked Questions
Why did Xbox hardware sales drop 33% in 2026?
Circana’s year-to-date data through August 2026 shows a 33% year-over-year decline in US Xbox hardware unit sales. Reports tie the drop to rising console prices, including the Xbox Series X’s increase to $799.99, which itself stems from a broader memory and storage component shortage affecting the entire electronics industry in 2026.
How much does a PS5 Pro cost in 2026?
Sony raised the PlayStation 5 Pro to $899.99 in April 2026, up from its original $699.99 launch price in November 2024, a 29% increase.
What is the current price of the Xbox Series X?
Microsoft increased the US price of the disc version of the Xbox Series X to $799.99 effective August 1, 2026, up from its original $499.99 launch price in November 2020.
Is PlayStation selling worse than Xbox in 2026?
In relative terms, no. PlayStation’s 25% year-over-year unit sales decline in the US was smaller than Xbox’s 33% drop, though Circana still describes PlayStation’s current pace as its weakest US showing since 2013.
What is causing the console price increases in 2026?
Reports link the price hikes to a memory and storage component shortage, driven in part by AI data center demand pulling manufacturers like Samsung, SK Hynix, and Micron toward specialized AI memory production and away from consumer-grade chips used in consoles, PCs, and phones.
Who is Mat Piscatella?
Mat Piscatella is a video game industry analyst at Circana, the market research firm that operates the US Retail Tracking Service used to measure console hardware and software sales. His year-to-date 2026 figures are the primary data source behind the reported Xbox and PlayStation sales declines.
Will console prices come down in 2027?
There’s no confirmed timeline for price reductions. If memory component supply normalizes as AI infrastructure demand matures, pricing pressure could ease, but manufacturers have historically been slow to reverse console price increases once they take effect.
Did Nintendo also raise prices in 2026?
Yes. Nintendo increased the Switch 2’s US price to $499.99 in September 2026, up from its $449.99 launch price in June 2025, a smaller 11% increase compared with the hikes seen on Xbox Series X and PS5 Pro.
