Despite the release of many major games, July 2026 has seemingly seen quite a downturn in terms of people spending on games and gaming hardware in the US. According to Circana’s Mat Piscatella, the US-based hardware market has been hit particularly hard, with spending having fallen by 29 percent year-on-year. He noted that the spending – around $282 million – was the lowest spending in July since 2020 – around $163 million.
Compared to July 2025, consumer spending on gaming hardware fell by 39 percent this year, which likely wasn’t helped by the fact that the average selling price of hardware has gone up by 16 percent to $542. All console platforms have been seeing declines. PS5 unit sales went down by 6 percent, Xbox Series X/S by 18 percent, and even Nintendo hasn’t been immune, with hardware sales falling by 51 percent.
Generally, the PS5 took first place in hardware spending throughout July 2026 in terms of dollar sales. As for actual units sold, however, the Nintendo Switch 2 has held on to its top spot. Comparing Nintendo’s latest console to the original Switch, Piscatella has noted that the Switch 2 is ahead by around 11 percent.
Accessories also haven’t managed to avoid the downturn in spending, having gone down by 6 percent compared to July 2025 to $178 million. This has been noted as being the lowest spending on gaming accessories in July since 2019, when it was $144 million. Racing controllers particularly haven’t been doing well, with spending going down by 26 percent year-on-year. The cases and organizers market, on the other hand, has grown by 36 percent.
Piscatella has noted that the falling consumer spending on gaming hardware has to do with prices having increased considerably since the previous year. A major factor for this has been the ongoing component shortages, which have led to the price of memory and storage going up, and in turn, have impacted how much Microsoft, Sony, and Nintendo can charge for their consoles. It is worth noting, however, that the Switch 2’s price hike will only start affecting the market in September.
“The hardware market comparables continue to be impacted by the record-setting June 2025 launch of the Nintendo Switch 2. However, the challenges extend far beyond simple cyclicality,” he explained.
“Higher hardware prices driven by the RAM and component crisis have significantly impacted the selling rates of both PlayStation 5 and Xbox Series, with a price hike for Nintendo Switch 2 hardware coming on September 1st, 2026.”
General trends of video game spending in the US for July 2026 have also seen a drop, with year-on-year spending having fallen by 10 percent, down to $4.5 billion. Mobile content has seemingly been driving the industry towards growth on its own, especially in light of declining spending on console and PC content.
When it comes to software, Capcom’s Resident Evil Requiem continues to dominate the US-based sales charts, followed by IO Interactive’s 007 First Light in second place, and Pearl Abyss’ Crimson Desert in third.
The hardware market comparables continue to be impacted by the record-setting June 2025 launch of Nintendo Switch 2. However, the challenges extend far beyond simple cyclicality.
— Mat Piscatella (@matpiscatella.bsky.social) 2026-08-20T13:05:47.458Z
Hardware – July video game hardware spending fell 29% when compared to a year ago, to $282 million, the lowest total for a July month since 2020 ($163 million).
— Mat Piscatella (@matpiscatella.bsky.social) 2026-08-20T13:05:47.462Z
Hardware – Unit sales were down on all console platforms when compared to a year ago. PlayStation 5 unit sales fell 6% versus July 2025, while Xbox Series dropped 18% and Switch 2 declined by 51%.
— Mat Piscatella (@matpiscatella.bsky.social) 2026-08-20T13:05:47.464Z
