Video game hardware sales in the United States have dropped to their lowest level in 13 years, according to Circana data cited by Yahoo Finance on October 9, 2026. The culprit is not a lack of demand for new consoles, it is the price of the consoles themselves, which has climbed sharply as a global memory and storage shortage pushes DRAM and NAND costs to levels manufacturers had not budgeted for. Xbox and PlayStation hardware sales are both deep in negative territory for the year, and the people tracking the numbers say the pressure is only getting started.
For a market that spent the first half of this decade recovering from pandemic-era supply shocks, the timing could hardly be worse. Component costs that were supposed to ease as chip fabs expanded are instead being pulled in the opposite direction by a surge in AI data center demand, and console makers are passing the bill directly to shoppers. The result, per the newest Circana figures, is the weakest August for hardware unit sales since 2013.
US Hardware Sales Hit Their Lowest August in 13 Years
Circana’s August 2026 tracking, reported by Yahoo Finance, shows US hardware unit sales down 15% year over year, the weakest August total the firm has recorded in 13 years. Dollar spending on hardware fell a smaller 3% in the same month, a gap that points to one thing: shoppers are buying fewer consoles, but paying more for each one they do buy. Zoomed out to the full year, 2026 year-to-date hardware spending is down 11% compared with the same stretch of 2025, according to the same Circana data.
Those numbers land on top of a year that was already showing cracks. Tech Insider reported in September that overall PC shipments fell 20.1% in the third quarter as the same DRAM price spike hit laptop and desktop makers. Console hardware is now following the same curve, just a few months behind.
Xbox and PlayStation Both Post Historic Declines
The platform-level breakdown is where the story gets sharper. Circana analyst Mat Piscatella said Xbox hardware unit sales in the US are down 33% year to date through August 2026 compared with the same period a year earlier, a decline Piscatella described as an all-time low for the platform’s US unit sales. PlayStation fared somewhat better by comparison but is still down 25% year to date, which Piscatella said puts PlayStation at its lowest point since 2013, the year the PS4 launched.
Average selling prices tell the rest of the story. The average price paid for a new Xbox console in the US through August 2026 was $529, up 26% year over year, according to Piscatella’s figures reported by Eurogamer. PlayStation buyers paid an average of $597, up 20% year over year. Both figures were described as all-time US highs for the respective platforms. Nintendo was not broken out with the same specific percentage in the Circana figures reported so far, but the Switch 2’s base model has also seen price pressure tied to the same component shortage.
Platform-by-Platform Breakdown
The table below lays out the Circana figures for the two platforms with confirmed year-to-date percentages, alongside the broader US market totals for August and the full year so far.
| Metric | Change | Avg. Price (YTD 2026) | Price Change YoY | Status |
|---|---|---|---|---|
| Xbox hardware units, YTD through August | -33% | $529 | +26% | All-time US low |
| PlayStation hardware units, YTD through August | -25% | $597 | +20% | Lowest since 2013 |
| US hardware units, August only | -15% | n/a | n/a | Lowest August in 13 years |
| US hardware spending, August only | -3% | n/a | n/a | Units falling faster than dollars |
| US hardware spending, full-year YTD | -11% | n/a | n/a | Weakest year-to-date since recovery began |
Source: Circana data as reported by Yahoo Finance and Eurogamer, October 2026.
Why Console Prices Keep Climbing
Sony, Microsoft, and Nintendo have all raised console prices this year, and Yahoo Finance’s reporting ties those increases to two overlapping forces: higher component costs and tariffs. Neither force is new on its own. What changed in 2026 is that both hit at the same time, and the component side of that equation has a specific cause that has nothing to do with gaming at all.
Mat Piscatella summed up the mood bluntly, telling reporters that “the US hardware market has not been in a more precarious position since the early 80s,” a reference to the home video game crash of 1983 that wiped out large parts of the industry. That is a striking historical marker for an analyst to reach for, and it reflects how unusual the current combination of falling units and rising prices looks against four decades of console market data.
Piscatella also connected the price increases directly to shrinking demand, saying that “we are seeing the negative impact of those higher price points on the consoles. We’re seeing a reduction in unit sales, driven by those higher prices,” in comments reported by Yahoo Finance. In plain terms, shoppers are seeing the new prices and deciding to wait, or to skip the upgrade entirely.
Inside the Memory and Storage Shortage
The root cause sitting underneath console pricing is the same one that has been reshaping the PC and GPU markets for most of 2026: a DRAM and NAND flash shortage driven largely by AI data center buildouts. Memory that would once have gone into consumer electronics, including console storage and system RAM, is instead being absorbed by server farms training and running AI models. Tech Insider has tracked the ripple effects across hardware categories all year, from GPU prices jumping as memory costs climbed to TV chip costs overtaking panel costs for the first time as DRAM spiked.
Console storage, specifically the flash memory used in built-in SSDs, has become one of the more visible casualties. Piscatella noted that availability problems are starting to show up alongside the price increases, saying “we’re also starting to see, spotty right now, but we’re starting to see some products becoming unavailable, likely because of the RAM and component crisis,” according to Yahoo Finance’s reporting. That is a notable shift from a market where the bigger story for most of the last two years was price, not availability.
Xbox’s Asha Sharma on the Storage Cost Spiral
No single executive comment captures the speed of the shortage better than Xbox chief executive Asha Sharma’s account of what Microsoft has paid for console storage components over the past year. Sharma said that “when I joined as CEO in February, the price we paid for console storage components was over 2x as high as we paid last fall. These costs have since doubled again,” according to comments reported by Eurogamer. Sharma went on to say Microsoft expects another significant increase heading into the 2027 holiday season, pushing storage costs to more than five times what the company paid just two years earlier.
That is not a gradual cost curve. It is a compounding one, doubling, then doubling again, inside a single calendar year. For a company that builds pricing and margin assumptions for a console years in advance, a five-fold jump in one component category is the kind of shock that forces either a retail price increase, a thinner margin, or both. Microsoft has already chosen the first option this year, and Sharma’s comments suggest it may need to choose it again before the next holiday season.
Current Console and Handheld Retail Prices
Price-tracking reports from early October 2026 show where current-generation hardware now sits at retail. The jump is clearest when stacked against the launch-era prices these same devices carried just two or three years ago.
| Device | Current US Price | Notes |
|---|---|---|
| PlayStation 5 Pro | $899.99 | Flagship Sony console, no price cut in 2026 |
| Xbox Series X (disc model) | $799.99 | Raised from original launch pricing |
| Nintendo Switch 2 (base model) | $499.99 | Priced above original Switch 2 launch estimates |
| Steam Deck OLED, 512GB | $789 | Valve’s mid-tier storage configuration |
| Steam Deck OLED, 1TB | $949 | Valve’s top storage configuration |
Source: price-tracking reports compiled in early October 2026. Console pricing for the PS5 Pro, Xbox Series X, and Switch 2 reflects the same component-cost pressure described in Circana’s sales figures.
Tech Insider has already flagged how fast this is moving on the resale side too. The site’s coverage of PS5 Pro refurbished-unit pricing hitting $1,399, up 55%, shows that even the secondhand market is not offering buyers a way around the shortage. When new units are scarce and expensive, used and refurbished units get pulled up in price right behind them.
How AI Data Centers Are Eating the DRAM Supply
The memory industry’s own numbers explain why console makers have so little room to negotiate. Memory maker Micron has told investors it expects supply to stay tight well into the next few years, with shortages persisting until at least 2028 under current demand trends. That is a direct consequence of AI infrastructure spending, which has turned high-bandwidth memory and standard DRAM into some of the most sought-after components in the entire electronics supply chain, ahead of gaming hardware, phones, and even many categories of PCs.
Micron’s own financial results back this up. The company posted record fiscal 2026 revenue, which Tech Insider covered in detail when it reported Micron’s record $133 billion revenue year, even as its stock barely moved, a sign that investors already expect the memory boom to keep running rather than treating it as a surprise. Separately, Tech Insider’s reporting on Micron’s memory crunch outpacing 20% supply growth found that even healthy increases in manufacturing output are not enough to catch up with demand, because AI buyers are absorbing new supply as fast as it comes online.
For console makers, this means the shortage is not a short-term bottleneck they can wait out. It is a structural shift in who gets priority access to memory fabs, and gaming hardware is currently losing that competition to AI servers that can justify far higher per-chip margins.
Tariffs Add a Second Layer of Cost
Component costs are only half of the pricing pressure. Yahoo Finance’s reporting specifically ties this year’s console price increases to tariffs as well as component costs, meaning Sony, Microsoft, and Nintendo are absorbing two separate cost increases on the same hardware at the same time. Tariff policy and memory shortages do not usually move in sync, but in 2026 they have landed in the same window, compounding the squeeze on console makers’ margins and leaving price increases as close to the only lever left to pull.
That double pressure also helps explain why price increases this year have been larger than the memory shortage alone would predict. A 26% jump in average Xbox selling price and a 20% jump for PlayStation reflect more than just pricier chips. They reflect a manufacturer trying to protect margin against two cost increases at once, in a market where consumers are already showing clear signs of price sensitivity.
Historical Context: From the 1983 Crash to 2013 to Now
The video game industry has lived through supply and demand shocks before, but rarely with this particular shape. The 1983 crash that Piscatella referenced was driven by an oversaturated software market and a collapse in consumer trust, not by a shortage of physical components. Retailers were flooded with unsold cartridges, and prices fell as companies dumped inventory, the opposite of what’s happening with console hardware now.
The 2013 comparison for PlayStation is a closer parallel in timing but a different story in substance. That year’s hardware numbers were shaped by the tail end of the PS3 and Xbox 360 generation, as shoppers held off ahead of new console launches. The current slump has no equivalent launch cycle driving it. PS5, PS5 Pro, Xbox Series X/S, and Switch 2 are all already on the market and established. This is a demand pullback caused by sustained price increases on existing hardware, not a pause ahead of something new.
Competitive Impact: Sony vs Microsoft vs Nintendo
Xbox’s 33% unit decline is steeper than PlayStation’s 25% drop, and the gap matters for how each company is likely to respond. Microsoft has leaned harder into Xbox Cloud Gaming and Game Pass as alternatives to buying new hardware outright, a strategy that softens the blow of console sales weakness but doesn’t fully offset it since Microsoft still needs hardware in homes to anchor the ecosystem. Sony, by contrast, has stuck closer to a traditional hardware-plus-software model, which makes its smaller but still historic decline arguably more concerning for near-term revenue, since PlayStation has fewer subscription and cloud levers to pull in the short run.
Nintendo sits in a different position again. The Switch 2 is still in its early sales window, which typically cushions a platform against the kind of late-cycle fatigue affecting PS5 and Xbox Series X/S. But the same component shortage pushing up Xbox and PlayStation pricing applies to Nintendo’s manufacturing costs too, and a $499.99 price point leaves less room to absorb further increases without risking the same unit-sales pullback now hitting its two competitors.
Market Impact: Retailers and the Wider Hardware Ecosystem
Retailers are caught in the middle of this shift. Lower unit sales mean less foot traffic tied to console purchases, and the accessories, storage upgrades, and controllers that typically ride along with a new console sale. The shortage is also spilling into the PC gaming hardware adjacent to consoles, as Tech Insider covered in reporting on PC shipments falling 20.1% in Q3 2026 amid the same DRAM price surge, suggesting the pullback in spending is not isolated to console buyers but extends across the broader gaming hardware market.
Software sales are a separate question from hardware, and a smaller installed base growth rate doesn’t necessarily translate one-to-one into weaker software sales, since existing console owners keep buying games regardless of unit sales trends. Still, a slower pace of new hardware adoption typically means a slower pace of new buyers entering the ecosystem, which compounds over multiple years if prices stay elevated.
Predictions: What Happens Through 2027 and 2028
- Console prices are likely to rise again before the 2027 holiday season. Asha Sharma’s own comments point to storage costs climbing past 5x their 2024 level by then, and manufacturers have shown little appetite to absorb these increases through margin alone.
- Memory-driven shortages will probably persist rather than ease. Micron’s outlook extending tight supply to 2028 suggests console makers are planning for a multi-year cost environment, not a short-term spike.
- Expect console makers to lean harder into subscription and cloud gaming models as a hedge against falling hardware unit sales, following the pattern already visible in Xbox’s Game Pass push.
- Refurbished and secondhand hardware prices will likely keep climbing in tandem with new unit prices, mirroring the pattern already seen with PS5 Pro refurbished units.
- If AI data center demand for memory keeps accelerating, gaming hardware could face continued second-priority status in chip allocation, meaning any relief in console pricing would depend more on AI memory demand cooling than on new fab capacity alone.
What This Means for Buyers Right Now
For anyone holding off on a console purchase, the current data offers a mixed signal. Prices are unlikely to fall in the near term given the trajectory Sharma and Micron have both described, but the same shortage that is pushing prices up could also tighten availability further, as Piscatella’s comments about spotty product shortages suggest. Buyers weighing a purchase now versus waiting are essentially choosing between paying today’s elevated price or risking a higher price, or an outright stock shortage, later.
That calculus is different depending on the platform. Xbox’s steeper 33% unit decline suggests more room for retailers to discount in an effort to move inventory, even as the underlying component costs rise. PlayStation’s position at its lowest point since 2013, with no clear discounting pattern reported yet, suggests Sony may be more willing to let unit sales fall rather than cut prices and squeeze margin further.
Frequently Asked Questions
Why are video game hardware sales at a 13-year low?
Circana data reported by Yahoo Finance shows US hardware unit sales fell 15% year over year in August 2026, the weakest August in 13 years. The decline is tied to console price increases driven by a memory and storage component shortage, not by a lack of consumer interest in gaming.
How much have Xbox and PlayStation hardware sales fallen in 2026?
Xbox hardware unit sales in the US are down 33% year to date through August 2026, an all-time low for the platform, according to Circana analyst Mat Piscatella. PlayStation hardware unit sales are down 25% over the same period, the lowest level since 2013.
Why are console prices going up?
Yahoo Finance reports that Sony, Microsoft, and Nintendo have raised prices this year due to higher component costs and tariffs. The component cost increases are driven largely by a global DRAM and NAND memory shortage.
What is causing the memory and storage shortage?
AI data centers are absorbing a growing share of global DRAM and NAND production, leaving less supply for consumer electronics, including console storage components. Memory maker Micron has said it expects the shortage to persist until at least 2028.
How much has it cost Xbox to buy storage components?
Xbox CEO Asha Sharma said console storage component costs were more than double in early 2026 compared with the previous fall, then doubled again since, with Microsoft expecting costs to exceed five times 2024 levels by the 2027 holiday season.
What is the average price of a new Xbox or PlayStation in 2026?
The average price paid for a new Xbox console in the US through August 2026 was $529, up 26% year over year. The average PlayStation price was $597, up 20% year over year. Both are all-time US highs for their respective platforms.
Will console prices come down in 2027?
Current reporting suggests the opposite is more likely. Micron’s supply outlook extends tight memory conditions to 2028, and Xbox’s own cost projections point to further increases heading into the 2027 holiday season.
Is the current hardware slump similar to the 1983 video game crash?
Circana analyst Mat Piscatella compared the current market’s precariousness to the early 1980s, but the causes differ. The 1983 crash was driven by an oversaturated software market and collapsing consumer trust, while the current slump is driven by rising hardware prices tied to a component shortage.