Console Sales Plummet as Prices Climb

The world’s leading video game console makers Sony and Nintendo both reported a steep decline in hardware sales for the quarter ended September 30, as recent price increases soured demand for the latest generation of consoles. PlayStation 5 sales fell 35 percent compared to the same period of last year, reaching 2.6 million – the weakest total for a September quarter since the PS5’s launch in 2020. Sales of the Nintendo Switch 2 dropped 41 percent to 2.7 million units in what was only the console’s fifth full quarter on the market.

The sales declines come in the wake of significant increases in console prices, as Sony, Nintendo and Microsoft (which doesn’t disclose unit sales for its Xbox consoles) were forced to pass surging component and tariff costs on to consumers. The global memory chip shortage, caused by the rapid buildout of AI datacenters, has hit console makers (and thus buyers) particularly hard, as prices of RAM, storage and processors – all key components of game consoles – have surged over the past two years.

Despite the drop in hardware unit sales, Sony’s Game & Network Services segment had its strongest quarter in years, as increases in software sales and subscription revenue more than made up for the decline in hardware revenue, which was smaller than the unit decline suggests. Sony even raised its full-year guidance for the PlayStation division from $29.7 billion to $31.6 billion, with operating income now expected to grow 51 percent to $4.58 billion.

Nintendo’s earnings painted a more sobering picture, missing expectations on both revenue and net profit. While the Switch 2 faced tough comparisons against its launch window in mid-2025, a 41-percent drop just five quarters into its lifecycle is cause for concern – especially when considering that Nintendo’s $50 price bump was milder than Sony's or Microsoft's. Despite the disappointing quarter, Nintendo stuck with its full-year forecast and still expects to sell 16.5 million units of the Nintendo Switch 2 this fiscal year. For that to happen, Nintendo needs to beat last year’s holiday and March quarter sales, which seems like a tall order in the current economic climate. Nintendo is banking on today's launch of the remade “The Legend of Zelda: Ocarina of Time” to reignite momentum heading into the critical holiday season.