Hardware spending in the US was so low in July that it nearly matched the 2020 pandemic days when everything was out of stock

US gaming hardware and software sales have hit historic lows, with July 2026 marking the weakest month in decades. According to industry analyst Circana, hardware spending plummeted 29% year-over-year to $282 million—the lowest July total since 2020 when pandemic-related supply chain disruptions made consoles scarce. Physical software sales fared even worse, dropping to $85 million, the lowest monthly total since Circana began tracking in 1995.

All major console platforms experienced significant unit sales declines compared to July 2025. Nintendo platforms dominated physical game spending with 63% of year-to-date consumer spending, while PlayStation accounted for 32%. Despite Nintendo’s strong performance share, the overall market contraction reflects broader industry headwinds.

The severe downturn has been attributed partly to rising hardware prices, with industry observers pointing to AI infrastructure competition creating RAM shortages that inflate consumer electronics costs. The timing is particularly significant given Sony’s recent announcement that it will cease producing physical game discs for PlayStation 5 starting in January 2028—a decision that sparked considerable online backlash and raised concerns about game preservation and consumer access.

The data underscores mounting challenges for the gaming industry, with consumers pulling back spending on both hardware and software amid economic pressures and increased device costs.

Hardware spending in the US was so low in July that it nearly matched the 2020 pandemic days when everything was out of stock

Sources