The Nintendo Switch 2 has emerged as the second fastest-selling console in US history, accumulating 5.9 million unit sales within its first 12 months. This performance places it just behind the Game Boy Advance, which sold 6.5 million units in the same timeframe approximately 25 years ago. Data from Circana's May 2026 report indicates that the Switch 2 was also the best-selling console in the US for May, surpassing the PlayStation 5.
This hardware success is a significant factor in a more than one-third rise in year-on-year hardware spending. However, the broader market landscape presents a starkly different picture for competitors. The PlayStation 5 experienced a 58 percent year-on-year sales decrease, attributed to recent price increases, reaching its lowest May total since 2000. While Xbox sales saw a smaller 12 percent decline, the undisclosed sales figures represent the lowest ever recorded for a May month for Xbox hardware.
These challenging sales trends are occurring amidst a general increase in console hardware prices. Microsoft recently implemented another price hike for Xbox consoles, while Nintendo is also set to increase the price of the Switch 2 later this year. Sony had already raised PlayStation prices in March. Consequently, the average price paid for new video game hardware in May 2026 rose to $502 USD, up from $440 the previous year. Specifically, PS5 pricing climbed 33 percent to $672, and Xbox Series X/S pricing increased 22 percent to $524.
A contributing factor to these price increases appears to be the ongoing demand for components from AI data centers. Microsoft anticipates a potential doubling of component pricing by autumn 2027, suggesting further price hikes or the introduction of significantly more expensive next-generation consoles. The market also recalls the challenges faced by Valve's Steam Machine, which struggled with a $1,000 base price for console-like performance, a price point even Valve acknowledged was higher than initially envisioned.
The upcoming release of Grand Theft Auto 6 on November 19th may offer a potential catalyst for the console market. However, concerns have been raised by at least one retailer regarding potential console stock shortages, which could impact the ability to meet demand during the crucial holiday season.