Despite Xbox console sales doubling YoY, hardware sales across the US are down 62%

July 22, 2026 - 21:42

The American video game market took a sharp downturn in the latest reporting period, with total consumer spending on games, hardware, and accessories falling by roughly 20 percent compared to the same time last year. Analysts project that overall sales for the month will land well below previous estimates, signaling a broader slowdown across the industry.

Despite the grim headline numbers, one bright spot emerged for Microsoft. Xbox console sales more than doubled year-over-year, driven by aggressive holiday promotions and the launch of new limited-edition models. However, this surge was not enough to offset a massive decline in the wider hardware category. Across the entire US market, console and device sales dropped by a staggering 62 percent compared to last year.

The steep decline is largely attributed to a comparison with an unusually strong period in 2023, when Sony and Microsoft both had major hardware releases and deep discounts. This year, with no new flagship consoles on the market and consumers tightening their budgets, the hardware segment has taken a heavy hit. Software sales also slipped, though digital downloads and subscription services held up better than physical discs.

Industry observers note that while Xbox's individual performance is encouraging for Microsoft, the overall market contraction suggests that the post-pandemic spending boom has fully cooled. With no major new console launches on the immediate horizon, the hardware slump may continue into the first half of next year.