Summary

• Video game hardware sales dropped by 45%, reaching the lowest total for January since 2020.
• A rise in digital game sales is seen while physical sales decline, indicating ongoing shifts in gaming trends.
• Future sales could rebound with releases like the Nintendo Switch 2 and Grand Theft Auto 6.

Analysis

Mat Piscatella, the executive director and industry analyst at Circana, previously known as NPD, reported that video game hardware sales are slowing considerably, dropping nearly half from expected figures. This decline may point towards changing consumer attitudes towards gaming consoles, as well as a lack of compelling new software to stimulate hardware sales.

Gaming is currently experiencing a downturn; Circana’s recent findings reveal that physical game sales have also dropped, with many players preferring the convenience of digital ownership. Reports indicate that hardware is declining as well.

In January 2025, video game hardware sales amounted to only $205 million, down from $349 million at the same time last year. Year-over-year comparisons show sales for both PS5 and Xbox have decreased by ~38% to 50% respectively, with the Nintendo Switch seeing a decrease of 53% as anticipation builds for its successor.

“January video game hardware spending dropped 45% when compared to a year ago, to $205 million. This is the lowest January total for video game hardware spending since the $131 million reached in January 2020.” — Mat Piscatella

Despite the disheartening statistics, it is suggested that upcoming game releases, especially the Nintendo Switch 2, could potentially drive sales back up, much like how Grand Theft Auto 6 has historically boosted console sales.