Since this is a translation of an overseas article, there may be some mistranslations.
https://hothardware.com/news/soaring-console-prices-pummel-us-hardware-sales-in-record-slump
US Hardware Sales Record Biggest Slump Ever Due to Soaring Console Prices
Soaring hardware prices and a rapid shift to digital downloads are crushing traditional offline retail sales, leading to a sharp decline in US video game spending in July. This is the worst performance seen since 1995.
July's sharp drop in game disc sales - Image: Unsplash by Oliver Beer
The gaming market last month experienced a steep decline across hardware, accessories, and offline software, marking a major slump. According to market research firm Circana, total industry spending fell 10% year-on-year to $4.5 billion.
The most dramatic hit was physical game software sales, which plummeted to a record low of $85 million in July, the lowest monthly total recorded since tracking began in 1995. This sharp decline in physical disc game sales reflects the accelerating digital transition, as exemplified by Sony's recent announcement that it will gradually phase out physical PlayStation disc production by 2028.
Similarly, US consumer spending on consoles fell 29% year-on-year to $282 million, marking the worst July for sales since the COVID-19 pandemic. The average device price rose 16% to $542, leading to a 39% decrease in total system sales. System sales plummeted across all platforms: PlayStation 5 dropped by 6%, Xbox Series platforms by 18%, and Nintendo Switch 2 by 51% compared to last summer's launch.
Xbox One - Image: Unsplash by Billy Freeman
Accessories were no exception, with related spending down 6% year-on-year. Total content sales across consoles, PCs, and mobile devices fell 9% to $4.1 billion. Even major software releases like Call of Duty: Black Ops 2, a PlayStation port that led the software charts this summer, couldn't offset this contraction.
Mat Piscatella, an analyst at Circana, explained that ongoing RAM shortages and (due to AI hyperscalers' massive demand, tariffs, and trade policies) increasingly stringent component supply have forced manufacturers to pass on rising production costs to consumers.
As of September 1st, all current-generation consoles will have higher retail prices than at launch. The Xbox Series X with an optical drive now costs $800, a $300 increase from its 2020 launch price. The disc-equipped PlayStation 5 is priced at $650. Nintendo is also raising the price of the Switch 2 from $450 to $500.
Simply put, unless RAM costs and supply chain issues ease, future hardware like the rumored Project Helix and PlayStation 6 could further transform console gaming from a mainstream entertainment option into a high-priced luxury item.
▶ Source: https://hothardware.com/news/soaring-console-prices-pummel-us-hardware-sales-in-record-slump
