US video game market spending falls amid rising console prices

The United States video game market experienced a significant downturn in August 2026, with total spending reaching $4.3 billion, a 9% decrease compared to August 2025. According to data from Circana, content spending fell by 10%, driven largely by an 18% decline in mobile gaming. While PC content spending rose by 13%, console content saw a 7% decrease.

Hardware sales for major console manufacturers have faced steep declines. Year-to-date through August 2026, Xbox hardware sales dropped 33% and PlayStation sales fell 25% compared to the previous year. In August alone, PlayStation sales contracted by 11% to their lowest August level since 2013, while Xbox sales fell 31%, marking their worst August performance since 2020.

Industry analysts attribute the slump to rising hardware prices fueled by a shortage of electronic components. Competition for resources from AI data centers has increased production costs, which are being passed to consumers. For example, the average price for an Xbox rose 26% year-over-year to $529, while PlayStation prices increased 20% to $597. Nintendo Switch 2 also saw a price increase in September 2026.