Nintendo's Switch 2 sold less than half the units in July that it did a year ago, leading a broad US console decline that marked the worst month for the industry since the Covid pandemic.
Total US game hardware spending fell 29% to $282M, according to Circana. Unit shipments dropped 39% year-over-year, while the average console price climbed 16% to $542.
A RAM and component crisis has driven up the cost of building every major console on the market. A Switch 2 hardware price hike is already confirmed, Circana director Mat Piscatella said.
"The challenges extend far beyond simple cyclicality."
Mat Piscatella, Circana
Sony's PlayStation 5 and Microsoft's Xbox Series have both taken hits from higher hardware prices.
Sony is now pivoting toward acquiring more content and intellectual property rights, while Microsoft has appointed a new CEO to oversee a transition of the Xbox group.
Pokopia provides a partial offset
The sales drop lands at a complicated moment for Nintendo. The Switch 2 launched to record demand last June, but the absence of a major Mario or Zelda title has weighed on momentum since then.
On the software side, Nintendo has had real wins. Pokemon Pokopia crossed 5 million units in global sales just over four months after its March launch, according to Nintendo and The Pokemon Company.
The game blends Pokemon characters with cozy life-simulation gameplay and is exclusive to Switch 2, meaning its popularity also supports hardware demand.
Nintendo is extending the game with a three-part expansion pass, with Part 1 already available and Part 2 coming later in 2026.
Splatoon Raiders also debuted in the US top-grossing games chart in July, and Tomodachi Life: Living the Dream held its position in the top 10.
The July hardware numbers do show one notable twist. The PS5 beat the Switch 2 on dollar sales for the month, though Nintendo's machine still outsold it on units. Sony's higher average selling price pushed it ahead in revenue terms.
That same period covered the aftermath of Sony's announcement that it would stop manufacturing physical game discs. Sony said it saw no impact from protests around the decision.
The bestselling game of July was a digital-only PS5 port of Call of Duty: Black Ops 2, which has already become the fifth best-selling game of 2026 overall, a sign that consumers are still spending, just not on new hardware.