US console hardware sales dropped to their lowest July level since 2020, according to new figures from Circana analyst Mat Piscatella. The senior director and video game industry advisor said hardware spending fell sharply last month. A RAM shortage continues to push prices higher across the market.
Piscatella’s monthly breakdown attributes part of the decline to the record-setting June 2025 launch of the Nintendo Switch 2. That launch makes year-over-year comparisons harder to read, since consoles almost always sell well in the months after a new system arrives. He said the current drop goes beyond a difficult comparison point, writing on Bluesky: “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.”
RAM shortage pushes console hardware sales down
Component shortages, particularly for RAM, are driving prices higher across the industry. Data centers are absorbing much of the available supply, and that squeeze is hitting console makers directly. Piscatella wrote: “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 1, 2026.”
Circana’s numbers show hardware sales down 39% compared to last July. The average price of a system is up 16% year over year. The top-tier PS5 model now costs $899.99, while the cheapest version runs $599.99, a price that still gives many buyers pause amid broader economic pressure. Neither figure includes the Switch 2 price increase set to take effect next month. That change will likely push the average system price even higher heading into the holiday quarter.
Xbox and PlayStation are already feeling the strain
Xbox lost around $1.6 billion over its last financial year. Sony has said the PS5 is lagging behind the PS4’s sales pace at the same point in its life cycle. Both companies now face a market where rising component costs, not just softer demand, are working against them. Higher build costs leave less room to cut prices and win back buyers, even as competition between the two platforms stays steady.
Nintendo is not immune either. The Switch 2 has sold well since launch. Even so, the coming September price hike suggests the RAM crisis is squeezing every hardware maker in roughly the same way, regardless of how strong a system’s underlying demand has been.
What might turn hardware sales around
Console sales typically climb around the holidays. Grand Theft Auto 6 is due before the end of the year, giving PS5 and Xbox owners a reason to upgrade. A launch on that scale has moved hardware numbers before. How much it shifts sales this time, and whether it eases the financial pressure on Sony and Microsoft, is not yet clear. The RAM shortage driving up component costs shows no sign of easing before the holidays arrive. Shoppers will likely keep facing higher prices even as demand for new releases picks up.