Consoles in Free Fall in the US: Xbox and PlayStation Hit Rock Bottom in 2026

Video game hardware in the United States is going through a very rough patch. According to a report by Vandal based on data from research firm Circana, sales of Xbox and PlayStation consoles plummeted in the first eight months of 2026. Mat Piscatella, an analyst at the firm, goes even further and compares the situation to the early 1980s, the period that led to the infamous North American video game crash of 1983.

The numbers speak for themselves. Between January and August 2026, Xbox sales were down 33% compared to the same period last year, the lowest level in the brand's history. PlayStation is holding up somewhat better, but it still fell 25% and posted its worst figures for that period since 2013. On top of that, consoles keep getting more expensive. This matters beyond Microsoft's and Sony's balance sheets, because the installed base of consoles shapes where people play, where they compete and which audiences content creators can reach.

What you need to know

• Sales of Xbox consoles in the US fell 33% year over year between January and August 2026, an all-time low.
• PlayStation sales dropped 25%, their worst figures for that period since 2013.
• Circana's Mat Piscatella believes US hardware sales haven't been this bad since the early '80s.
• One of the biggest problems is the steadily rising price of consoles.
• Not even the arrival of GTA 6 seems to guarantee a rebound.

What's happening and why it's worrying

The comparison with 1983 isn't a coincidence. That crash nearly wiped out home video gaming in the United States and forced the market to rebuild from scratch. Admittedly, the industry today is much bigger and more diverse than it was back then, but a warning from an analyst as influential as Piscatella makes it clear that this is no ordinary dip. Both major manufacturers are seeing steep declines at the same time.

Price at the heart of the problem

Circana points to rising hardware prices as one of the key factors. For decades, consoles typically got cheaper over the course of their life cycle. Now the opposite is happening: they get more expensive over time. When getting into a platform costs more, casual players think twice, and those who already own a console hold on to it longer instead of upgrading. The source also suggests that even a release as hotly anticipated as GTA 6 might not be enough to turn things around. That says a lot about the scale of the problem, since we're talking about one of the most anticipated games of all time.

Our take

Here at the Underworld Lordz newsroom, we don't think gaming itself is in crisis. What's in crisis is a specific model: selling increasingly expensive hardware and expecting people to pay for it without complaint. People are still playing, but they're shifting toward platforms they already own, toward PC, toward mobile, or toward free-to-play games that run on almost any device. If building a console costs more and selling it is harder, that's the manufacturers' problem, not the players'.

For the competitive scene, this cuts two ways. On one hand, if the base of new consoles stagnates, console tournaments and leagues could lose players and struggle to bring in a new generation, especially in titles tied to a single platform. On the other hand, it reinforces something we're already seeing in our community: crossplay and PC are becoming the common ground. If you're a competitive player, betting on cross-platform games is the safest choice right now.

For content creators, the signal is just as clear. An audience that isn't upgrading its consoles is an audience that will keep playing what it already has for longer. Big releases may generate smaller spikes, while content about established games, live-service titles and accessible games could become more stable. And if we're being critical, Microsoft and Sony would do well to remember that players are the foundation of all this, and that endlessly raising prices has its limits.

What do you think?

Have you stopped buying consoles because of the prices? Did you switch to PC, or are you sticking with your platform of choice? We want to hear from you. Drop by the team chat or our Discord and tell us: do you think this is a real hardware crisis, or just a shift in the way we play?