PS5 and Xbox Hardware Sales Hit Historic Lows in May
PlayStation 5 and Xbox Series consoles experienced their worst May hardware sales in decades, according to the latest U.S. market data from Circana. The report, highlighted by industry analyst Mat Piscatella, shows a dramatic year-over-year decline in unit sales as consumers react to rising console prices.
PlayStation 5 unit sales fell by 58% compared to May of the previous year. This represents the console's lowest May sales performance in the United States since the year 2000. Xbox Series hardware sales also dropped, declining by 12% year-over-year to hit their worst May on record.
While overall consumer spending on video game hardware increased by 38% to $249 million, this figure was heavily propped up by the performance of the Nintendo Switch 2. Spending specifically on PS5 hardware was down 43%, and Xbox was the second best-selling system for the month in dollar sales despite its unit sales slump. The data points to a significant market shift driven by affordability.
Rising Costs: Average Console Prices Reach New Heights
The average price consumers paid for a PlayStation 5 or Xbox Series console surged to record highs in May, according to data from Circana's monthly sales report. The financial data underscores the severe inflationary pressure on hardware that is contributing to the market's sales slump.
The average selling price for a PlayStation 5 in May was $672, representing a 33% increase compared to the same month a year ago. For Xbox Series consoles, the average price paid reached $524, a 22% year-over-year increase.
This sharp rise in average prices occurred even as unit sales for both platforms declined dramatically. The increased figures are partly attributed to a higher mix of premium hardware, such as the PS5 Pro, in the sales channel. The data confirms that while fewer consoles are being sold, those that are purchased are commanding significantly more money from consumers.
The overall impact lifted the average price paid for all new video game hardware to $502 in May, a 14% increase from the $440 average recorded a year earlier. This trend of escalating hardware costs is creating a new, higher pricing floor for the console market.
Microsoft Announces Steep Xbox Price Hikes for August
Microsoft has announced significant price increases for its Xbox Series X and S consoles, which will take effect on August 1, 2026. According to an official company statement reported by VGC, the price hikes are a direct response to a severe components crisis impacting the consumer electronics industry.
The Xbox Series X 1TB model without a disc drive will now retail for $749.99, while the 512GB Xbox Series S will cost $499.99. This represents an increase of between $100 and $150 for each model. As a result, the disc-drive version of the Xbox Series X will cost $300 more than its 2020 launch price, while the Series S is now 50% more expensive.
Microsoft explicitly blamed soaring memory and storage costs for the decision. In its statement, the company said, “Unfortunately, console storage and memory prices have increased by more than 2.5x, and we expect another doubling by the fall of 2027.” This industry-wide crisis has already led to notable price increases from other manufacturers throughout 2026.
Nintendo Switch 2 and Software Sales Provide Market Silver Lining
Nintendo Switch 2 and Software Sales Provide Market Silver Lining
While May's hardware market was defined by steep declines for PlayStation and Xbox, strong software sales and the continued success of the Nintendo Switch 2 provided a counterbalance. According to the latest Circana sales data, the Nintendo Switch 2 was the best-selling hardware platform in both units and dollars for the month. The console also reached a significant milestone, ending its first year on the market with a U.S. installed base of 5.9 million units, making it the second-fastest-selling video game hardware in U.S. tracked history, behind only the Game Boy Advance.
The robust software market was led by new releases. '007 First Light' debuted as May's number one title in full-game dollar sales, according to Circana. Microsoft's 'Forza Horizon 6' was the month's second best-selling game. These titles helped drive a 3% year-over-year increase in overall industry spending, offsetting the sharp drops in hardware revenue.
This bifurcated market highlights a challenging landscape where rising console prices are dampening hardware demand, while compelling new game releases continue to attract consumer spending. The performance of the Switch 2, which has avoided the recent price hikes affecting its competitors, underscores the impact of affordability on sales momentum in the current economic climate.