Xbox Hardware Sales Drop Nearly 70% in 2026 as Console Prices Rise

Xbox hardware sales have taken a major hit in 2025, with new data showing a sharp decline across the U.S. gaming market. Xbox recorded an estimated 70% year-over-year drop in gaming hardware sales by November 2025, marking the steepest decline among major console platforms.

Analysts link this downturn primarily to Xbox console price increases introduced earlier this year. Microsoft raised prices in both May and September 2025, a move that appears to have dampened consumer interest during key shopping periods, including Black Friday and early holiday sales.

Xbox hit hardest as hardware demand cools

While the entire console market struggled in 2025, Xbox felt the impact more strongly than its competitors. Sony’s PlayStation 5 reportedly saw hardware sales decline by around 40% year-over-year, while Nintendo experienced a more modest 10% drop compared to last year’s Switch-only performance.

Industry analysts note that overall gaming hardware demand softened significantly this year. Black Friday and holiday shopping periods generated less excitement around consoles, and many consumers chose to delay upgrades or skip purchases altogether.

Higher console and accessory prices have played a key role in this shift. As costs increased, more players turned toward cheaper alternatives, focused on existing hardware, or invested in software and subscriptions instead of new consoles.

Worst November for hardware sales in decades

The November 2025 hardware market posted historically low figures in the U.S., delivering the weakest November performance in more than 20 years. Total hardware spending dropped sharply across all platforms, reflecting a combination of weaker demand, elevated pricing, and aging console lifecycles.

Xbox’s current-generation hardware now faces stiffer challenges as the market matures, while Sony’s PS5 and Nintendo’s newer Switch 2 platform managed to maintain stronger relative momentum. Reports suggest the PS5 significantly outsold the Xbox during recent promotional events.

Not all bad news for Microsoft

Despite the console slump, Microsoft still has bright spots in its gaming business. The Xbox Ally X reportedly achieved record sales, showing strong interest in alternative Xbox hardware experiences beyond traditional consoles.

Xbox players also continue to benefit from ecosystem-focused initiatives. Programs like Xbox Free Play Days allow gamers to try popular titles at no extra cost, helping maintain engagement even as hardware sales slow.

As 2025 comes to a close, Xbox faces clear challenges in the hardware space, but Microsoft’s broader gaming strategy suggests the picture remains more complex than console sales alone indicate.

Via TechRadar