US hardware spending fell to $282 million in July 2026, a 29% decline compared to the same period last year and the worst July for hardware spending since 2020, according to Circana analyst Mat Piscatella.
Piscatella shared US sales data for July on Bluesky, noting that hardware sales dropped by 39% compared to the same month last year. The $282 million figure (about £207 million) is comparable to spending during the coronavirus pandemic — $163 million (about £120 million) was spent on hardware in June 2020, four months after US lockdowns began.
Price hikes and component crisis drive decline
Current generation consoles have grown more expensive since launch due to multiple price hikes. The PlayStation 5 and Xbox Series X now cost at least £519.99 and £619.99 respectively, while the Nintendo Switch 2 is set to increase in price after just over a year on the market. Piscatella said the decline is clearly driven by how pricey game consoles are, which in turn results from the ongoing component crisis that also impacts the PC and mobile markets.
The Nintendo Switch 2 saw the biggest decline in sales compared to last year — a 51% drop — though this follows its successful launch in June 2025. The only Switch 2 exclusive in July was spin-off game Splatoon Raiders. PlayStation 5 sales declined by 6%, while Xbox Series X/S sales dropped by 18%.
Physical Xbox games account for just 4% of sales
July was a typically quiet month for new video game releases, with little to encourage console purchases. The month saw the release of Halo: Campaign Evolved, a remake of the first Halo game designed to revitalise the franchise and expand its audience with a PlayStation debut. Circana projects it as the sixth best-selling game of July 2026, behind titles such as the Assassin's Creed 4: Black Flag remake, EA Sports College Football 27, and Activision's PlayStation 4 and 5 ports of the first two Call Of Duty: Black Ops games.
In a follow-up statement to Kotaku, Piscatella added that only 4% of physical game sales in July were for Xbox games. While some have suggested Xbox could advocate for physical media since Sony plans to ditch disc-based games after 2027, this data lends credence to Xbox doing the same with Project Helix and promoting a digital-only future.
