The recent wave of price increases for PlayStation and Xbox has finally revealed its "cost" in sales data. The latest U.S. market data released by Mat Piscatella, an analyst at market research firm Circana, shows that in May 2026, PlayStation console sales in the United States fell to the lowest level in the same period since 2000, while Xbox consoles suffered their "worst May" on record. At the same time, Nintendo's new generation handheld console Switch 2 unexpectedly benefited from the high-price environment, pushing overall game hardware spending in the United States to rise against the trend.
Sony and Microsoft have successively raised the prices of current-generation consoles, which was directly caused by the soaring cost of key components such as memory. Sony made a significant price increase for the entire global PlayStation 5 series in March, raising the prices of the standard and digital versions by $100 to $150, bringing the new price of the PS5 standard model to $549 in the US market, while the higher-performance PlayStation 5 Pro was pushed to a record $899. The price adjustment ends with PS5 sales plummeting 58% year-over-year in May 2026, and console revenue by value also falling 43% year-over-year.
As for Microsoft, Xbox Series S|X has experienced two price increases in the past year, and the overall price level is gradually approaching the Sony camp. Microsoft is expected to launch a third wave of price increases in August this year, which has been described as the "most aggressive yet" adjustment - each model is expected to increase by another $100 to $150. In May 2026, U.S. Xbox console sales fell 12% year-on-year, but its hardware revenue increased 7% year-on-year due to a significant increase in average selling prices.
More broadly, the construction of AI data centers is reshaping the memory and storage chip market, squeezing the cost of consumer hardware including game consoles. Analysts generally believe that this high cost situation will be difficult to significantly alleviate before 2028. Memory manufacturer Micron has recently locked in contract prices not to be lowered for the next five years, further exacerbating expectations of price increases for end products.
While Sony and Microsoft are under pressure, Nintendo Switch 2 has become the outstanding "winner" in the market. Nintendo has only postponed a small price increase (around $50) for the handheld console until September of this year, so it is maintaining a relatively modest price strategy in May. Against this backdrop, overall U.S. gaming hardware spending recorded a 38% year-over-year increase in May 2026, with the Switch 2's strong performance playing a key supporting role.
As of the end of May 2026, Switch 2 has sold approximately 5.9 million units on its first anniversary in the United States. According to Circana, this makes it the second-fastest handheld console in the United States since portable gaming systems were first recorded in 1995, behind only the Game Boy Advance, which sold approximately 6.5 million units in its first year. In the current era of high-cost and high-priced consoles, the rhythm and strategy of Switch 2 have clearly won the favor of consumers.
However, analyst Mat Piscatella also gave a relatively cautious outlook. He believes that May 2026 may be the last month in which annual sales of game hardware show year-on-year growth in the future, and subsequent rounds of price increases that are gradually in place are expected to suppress consumers' willingness to purchase. In this case, the market may enter a "wait-and-see period" until the end of the year holiday sales season and the release window of "Grand Theft Auto VI", which is expected to reignite player demand and put pressure on console supply.