Xbox recorded its worst May for hardware unit sales in tracked history, while PlayStation 5 unit sales collapsed 58% year-on-year — the platform’s lowest May performance since 2000 — as surging console prices bite into consumer demand. Nintendo Switch 2 was the sole counterpoint, propping up the entire market and cementing itself as the second fastest-selling console in US history.
The figures come from Circana’s latest US video games sales report (via VGC) for May 2026, which paints a stark picture of a hardware market being reshaped by a components cost crisis that has pushed all three major manufacturers to raise prices sharply.
Key Takeaways
- Xbox Series hardware unit sales fell 12% year-on-year in May 2026, Circana’s worst May on record for the platform.
- PS5 unit sales dropped 58% year-on-year in May, with the average PS5 price up 33% to $672 — the steepest decline among the three platforms.
- Nintendo Switch 2 was the best-selling hardware platform in the US in both units and dollars for May and year-to-date, reaching 5.9 million units in its first year — second fastest in US tracked history.
- From 1 August 2026, the Xbox Series X Digital 1TB will cost $749.99 and the Xbox Series S 512GB will cost $499.99, increases of $100–$150 across the lineup.
- Microsoft warned that console storage and memory prices have risen more than 2.5x and expects another doubling by the fall of 2027, with Valve’s Steam Machine confirmed at over $1,000.
How bad were Xbox and PS5 sales in May 2026?
Xbox Series hardware unit sales fell 12% year-on-year in May — Circana’s worst May on record for the platform. PlayStation 5 fared considerably worse, with unit sales down 58% compared to May last year. The PS5 figure represents the lowest May performance for PlayStation hardware since 2000, though it bears noting that the PS5 itself only launched in 2020 — the comparison likely refers to PlayStation hardware broadly rather than the PS5 specifically.
The unit declines tell one story; the spending data tells another. Xbox hardware spending grew 7% year-on-year despite the unit drop, a direct result of higher average prices. PS5 spending fell 43%, suggesting Sony’s price increases have pushed enough buyers to the sidelines that even elevated per-unit revenue cannot compensate. The average PS5 price rose 33% year-on-year to $672 in May; Xbox Series averaged $524, up 22%. Sony raised the PS5 price to $650 earlier this year, a move that clearly continues to weigh on demand.
| Platform | May unit sales (YoY) | May spending (YoY) | Average price paid | Average price change (YoY) |
|---|---|---|---|---|
| Xbox Series | -12% (worst May on record) | +7% | $524 | +22% |
| PlayStation 5 | -58% (lowest May since 2000) | -43% | $672 | +33% |
| Nintendo Switch 2 | Best-selling (units & dollars) | Propped up overall market | N/A | N/A |
| All hardware combined | N/A | +38% ($249M) | $502 avg new hardware | +14% (from $440) |
Why are Xbox consoles getting more expensive?
Microsoft has announced price increases of $100–$150 across its Xbox console lineup, effective 1 August 2026, citing what it calls “the current components crisis” affecting the consumer electronics industry. From that date, the cheapest Xbox Series X — the 1TB digital model without a disc drive — will retail for $749.99. The entry-level Xbox Series S 512GB model will cost $499.99.
To put those numbers in context: an Xbox Series X with a disc drive now costs $300 more than it did at launch in 2020, while the Series S is 50% more expensive than its original price. These are not incremental adjustments — they represent a fundamental repricing of what a console costs.
Microsoft’s explanation goes beyond tariffs or supply chain disruption. “Unfortunately, console storage and memory prices have increased by more than 2.5x, and we expect another doubling by the fall of 2027,” the company said. That forward-looking warning is the part worth sitting with: if memory costs double again by late 2027, the current price hikes may not be the last. Microsoft has separately acknowledged that next-gen consoles cannot cost ‘thousands of dollars’ — which implies the company is aware of where this trajectory leads.
UAE pricing for the post-August 1 Xbox lineup has not been confirmed. Whether the increases apply to the UAE and GCC markets on the same date is not yet known — worth checking with Microsoft’s regional teams before buying.
Nintendo Switch 2 is the outlier the market needed
While Xbox and PlayStation were posting record lows, Nintendo Switch 2 was doing the opposite. The console was the best-selling hardware platform in the US in both units and dollars for May 2026 and for the full year-to-date. It closed its first year on sale with a US installed base of 5.9 million units, making it the second fastest-selling video game hardware in US tracked history — behind only the Game Boy Advance, which reached 6.5 million units in its first year.
That single platform is what pushed overall hardware spending up 38% to $249 million in May. Without Switch 2, the picture would have been bleak across the board. The average price paid for new hardware reached $502 in May, up 14% from $440 a year ago — and that figure would look different without Nintendo’s volume contribution pulling it down from what Xbox and PS5 averages suggest.
What next-gen consoles could cost from 2027
The components crisis isn’t just a 2026 problem. Valve confirmed this week that its Steam Machine will retail for over $1,000 — and some analysts have since speculated that this price point could be the floor for next-gen consoles expected to arrive from 2027. That is analyst speculation, not confirmed fact, but it is grounded in the same cost pressures Microsoft is flagging. Valve has already raised prices on its existing hardware citing component costs, so the Steam Machine figure is not coming from nowhere.
If next-gen hardware does land at or above $1,000, the console market faces a genuine structural question about who its audience is. The PS5 data already shows that $672 is enough to kill demand — a four-figure price point would test the market in ways it has never been tested before.
Which games sold best in May 2026?
007 First Light was May’s number one title in full game dollar sales, debuting as the fourth best-seller of 2026 year-to-date. Forza Horizon 6 was the second best-selling game of the month and finished May ranked fifth year-to-date — a strong showing for a Microsoft first-party title at a time when its hardware numbers were heading in the opposite direction. Both titles performing well suggests software demand remains healthy even as hardware sales crater, which is consistent with a market where existing owners are still buying games but fewer new consoles are moving off shelves.
Frequently Asked Questions
Why are Xbox consoles getting more expensive?
Microsoft cites a ‘current components crisis’ in which console storage and memory prices have increased by more than 2.5x. The company also warned it expects another doubling of those costs by the fall of 2027, driving $100–$150 price increases across the Xbox Series lineup from 1 August 2026.
How much will Xbox Series X and Series S cost from August 2026?
From 1 August 2026, the cheapest Xbox Series X — the 1TB Digital model without a disc drive — will cost $749.99, while the cheapest Xbox Series S 512GB model will cost $499.99. UAE pricing for the updated lineup has not been confirmed.
Why did PS5 sales drop so sharply in May 2026?
PS5 unit sales fell 58% year-on-year in May 2026 according to Circana. The average PS5 price rose 33% year-on-year to $672, with Circana’s data pointing to recent price increases as the primary driver of declining consumer demand. PS5 spending was down 43% as a result.
How much could next-gen consoles cost in 2027?
Valve confirmed its Steam Machine will retail for over $1,000. Some analysts have speculated this price point could be the floor for next-gen consoles expected from 2027, though this remains analyst speculation rather than confirmed pricing from any manufacturer.
