Unit sales of PlayStation 5 declined 58 per cent from a year earlier, while dollar sales fell 43 per cent. Xbox Series hardware also showed strain, with unit sales down 12 per cent year on year and May volumes reaching the lowest level recorded for Microsoft’s console business. Xbox dollar sales rose 7 per cent, reflecting the impact of higher average selling prices rather than stronger demand.
The figures point to a widening split in the console market. Total US video game hardware spending rose 38 per cent in May to $249 million, but the gains were driven largely by Nintendo Switch 2. The new Nintendo platform was the top-selling console by both units and revenue for the month and remained the year-to-date leader, underlining how fresh hardware can still lift consumer spending even as older platforms struggle.
The PlayStation 5, launched in 2020, is now deep into its cycle, a stage when sales usually soften unless supported by price cuts, major exclusive releases or upgraded hardware. Instead, the console has faced price increases in several markets, including the United States, where inflation, tariffs and component costs have limited the scope for discounts. The result has been a weaker conversion of interest into purchases, particularly among price-sensitive households.
Microsoft faces a more acute hardware challenge. Xbox Series X and Series S consoles have trailed PlayStation 5 through much of the generation, while the company has placed greater emphasis on Game Pass, cloud gaming and releasing more titles across rival platforms. That strategy has broadened Microsoft’s software reach, but it has also reduced the role of dedicated Xbox hardware as the centre of its gaming business.
The weakness in May comes ahead of another Xbox price increase scheduled for August 1. Microsoft has said the cost of 512GB models will rise by $100 and 1TB models by $150, while the 2TB version will be discontinued. The company has cited steep increases in storage and memory costs, with supply pressures linked to demand from artificial intelligence data centres and the wider consumer electronics industry.
Sony has also had to manage cost pressure across the PlayStation business. PlayStation 5 prices have risen in multiple regions since launch, reducing the traditional late-cycle advantage of cheaper hardware. Earlier console generations often relied on aggressive price reductions to expand the customer base after the first wave of enthusiasts had bought in. That model has become harder to sustain as manufacturing savings have failed to offset higher component and logistics costs.
Nintendo’s performance shows a different dynamic. Switch 2 has benefited from pent-up demand, strong brand loyalty and a software pipeline that supports both family and core gaming audiences. Its momentum has helped lift total hardware spending even while PlayStation and Xbox sales weaken. The platform’s early performance has also reinforced Nintendo’s ability to operate somewhat outside the direct hardware race between Sony and Microsoft.
Software trends provided additional support to the wider market. US consumer spending across video game content, hardware and accessories rose 3 per cent in May, helped by stronger hardware sales from Switch 2 and continuing demand for major releases. Industry forecasts had already pointed to 2026 as a potentially high-spending year, supported by Nintendo’s new platform, subscription activity and anticipation around Grand Theft Auto VI.
The coming months will test whether Sony and Microsoft can stabilise hardware demand before the holiday season. Grand Theft Auto VI, due later this year, is widely expected to drive console upgrades, particularly among players still using older PlayStation and Xbox systems. Retailers and platform holders are likely to watch supply closely, as any jump in demand could collide with component constraints and higher prices.
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