New data from Circana indicates a dramatic decline in physical game sales for Xbox in the United States, with the platform accounting for a mere 4 percent of all new physical video game sales this year. This stands in stark contrast to Nintendo, which dominates the physical market with 63 percent of sales, and PlayStation, which holds 32 percent.
Several factors likely contribute to this imbalance. Nintendo's player base has historically shown a stronger preference for physical media compared to PlayStation and Xbox users. The disparity between PlayStation and Xbox may be influenced by Xbox's more prevalent digital offerings, such as Xbox Game Pass Ultimate, which encourages digital game access. Additionally, some of Xbox's major first-party releases this year have been or are planned to be cross-platform, potentially impacting dedicated physical sales figures. The data also raises questions about the initial production volume of physical copies, with speculation that PlayStation may simply release more physical units than Xbox.
This trend in physical game sales has broader implications, especially as platforms like PlayStation reportedly plan to discontinue disc support around 2028, with Xbox expected to follow. While the discontinuation of physical media on PlayStation would represent a significant shift for about a third of the physical game market, its impact on Xbox would be comparatively smaller given its current low market share.
Nintendo remains the dominant force in physical game sales, though even it may be exploring a future away from physical media, as evidenced by the use of game-key cards for some upcoming Switch 2 releases. The overall market for new physical software sales has also seen a downturn, with July 2026 marking an all-time low for the month at $85 million. This decline, which also affected January sales, suggests a broader waning popularity of physical discs, a trend that Sony has acknowledged in its strategic shifts.
Total content spending in July saw a 9 percent year-over-year decrease, driven by drops in mobile, console, and PC spending, with subscriptions being the only segment to show growth. In terms of individual game sales for July, Call of Duty: Black Ops 2 topped the charts in dollar sales, largely due to its current-gen PlayStation port. It has since become the fifth best-selling game of 2026. EA Sports College Football 27 followed at number two, and would have been the top seller if its MVP Bundle was combined. Assassin’s Creed Black Flag Resynced, Halo: Campaign Evolved, Splatoon Raiders, and Echoes of Aincrad: Sword Art Online also debuted on the charts. Halo: Campaign Evolved saw engagement from 2 percent of active PlayStation players compared to 10 percent of active Xbox players last month.
On PC, Palworld's 1.0 launch propelled it to the second best-selling game on Steam in dollar sales, behind Assassin’s Creed Black Flag Resynced. Digimon Story: Time Stranger saw a significant jump in July, climbing from 87th to 23rd place following its Nintendo Switch release.