U.S. gaming market sees sharp decline in console and physical media sales

U.S. video game console and physical media sales saw a significant decline in July, according to data from Circana. Console unit sales plummeted 39% compared to the previous year, with total revenue falling to $282 million. This downturn is attributed to rising hardware costs, as the average console price increased by 16% to $542 due to surging costs for memory and semiconductor components.

Physical game sales reached their lowest monthly revenue since Circana began tracking the market in 1995, totaling just $85 million. The market for physical software is increasingly dominated by Nintendo, which accounted for 63% of sales, followed by PlayStation at 32%. Xbox physical sales have declined to a negligible 4% of the market.

While Sony's PlayStation unit sales fell slightly, its revenue grew by 29% due to higher average selling prices. Conversely, Microsoft's Xbox Series sales and revenue both dropped by 18%. The shift toward digital downloads and subscription services continues to accelerate the decline of the physical disc format.