Xbox Hits Record Low as PS5 Sales Decline in May Report

New Circana data reveals historic declines in hardware sales for Xbox and PlayStation, while the Nintendo Switch 2 continues to drive growth in the U.S. gaming market.

The latest U.S. video game sales data from Circana doesn't show Microsoft and Sony in a positive light. The market as a whole grew, while the Xbox and PlayStation systems posted relatively bad performance in May 2026.

Total U.S. video game spending increased 3% from May 2025 to May 2026, according to industry researcher Matt Piscatella. This is largely thanks to the successful launch of 007 First Light and high sales of the Nintendo Switch 2. While the market was climbing, sales of both Sony's PlayStation 5 and Microsoft's Xbox Series consoles took a significant hit.

The report also said it was an excellent month for game releases. 

007: First Light debuted at number one. Then came Forza Horizon 6, followed by Lego Batman: Legacy of the Dark Knight, then Subnautica 2. Hardware sales may have been low, but the software business was booming, as reflected in four of the top slots being occupied by new games. 

Further down the rankings were Tomodachi Life, MLB The Show 26, Crimson Desert, Yoshi in the Mysterious Book, Call of Duty: Black Ops 7, and Mario Kart World. There is clearly still an audience for a variety of different titles. Spending on hardware increased 38% year-over-year to $249 million in May, but the increase was primarily due to the Nintendo Switch 2. The system offset a 43% decline in PlayStation 5 hardware spending and a 58% decrease in PS5 unit sales.

Circana noted that PlayStation 5 revenue declined more slowly than unit sales, even as prices have been rising of late. This means Sony made more money per machine even though they sold a lot less. Xbox hardware spend was up 7% year-over-year, but Xbox Series unit sales were still down 12% due to the same price effects.

It was also the top-selling hardware platform in May and year-to-date, in both units sold and revenue. The Xbox still lagged, and the PlayStation 5 finished in second in both categories. The report also said Switch 2 has been in the market for a year and has now been installed in 5.9 million units in the U.S. The only other video game system ever recorded to sell more in the U.S. was the Game Boy Advance, which sold 6.5 million units during the same period.

The data in the article on Sony and Microsoft might be the most fascinating.

May was the poorest month ever for Xbox hardware unit sales and the lowest month for PlayStation hardware unit sales since May 2000. The PlayStation similarities to May 2000 are based on true events. By then, the PlayStation 2 had already been released in Japan, and North Americans were eagerly awaiting its release this Christmas season. A lot of people waited for the following generation to get the original PlayStation because they already knew what the machine could do, and it could also play previous games.

This happened again before the Nintendo Switch 2 launched last year, with many people waiting to buy the original Switch until the second one came out. Sales of the Switch were temporarily down until the new console launched. Analysts in the field believe the June results will be even more difficult than expected. June 2026 will be compared directly to the debut month of the Nintendo Switch 2, the year before, not to May 2026. This would mean the benefit to overall market performance from the new console is lost.

Even if the Switch 2 sells well, it may not be enough to offset declining sales on other platforms.

Analysts expect total gaming revenue to fall year over year, as comparisons will be much more difficult. In general, individuals are concerned that rising gear prices are starting to dampen buyer demand. Current-generation systems are getting more expensive, and the slower unit sales could be a longer-term trend rather than a short-term setback. It's year six of the console generation, and Sony and Microsoft are feeling the heat.