Switch 2 and Tariffs Drive Game Console Spending Surge
▼ Summary
– US game console hardware sales reached $312 million in August 2025, a 32% increase from August 2024 despite declining sales of PlayStation 5, Xbox Series, and original Switch consoles.
– The Nintendo Switch 2 sold over 2.4 million units in its first three months, making it the fastest-selling console ever and outpacing the PlayStation 4 by 5% and the original Switch by 77%.
– US consumer spending on consoles is up 20% year-over-year to $2.9 billion, driven largely by a 12.3% price increase rather than a 6.5% rise in units sold.
– Major price hikes include the Xbox Series S increasing from $299.99 to $399.99 and the digital Xbox Series X rising from $449.99 to $599.99, with all PlayStation 5 models seeing $50 increases.
– Despite high prices like $799.99 for a premium Xbox, current console costs remain below historical highs such as the 1990 Neo Geo, which would cost about $1,500 today.
A significant surge in consumer spending on video game hardware is reshaping the market, driven largely by the launch of the Nintendo Switch 2 and the impact of new tariffs. According to data from Circana, hardware sales in the United States reached $312 million during August, marking a substantial 32 percent jump from the $236 million recorded during the same period in 2024. This impressive growth occurred even as sales for the PlayStation 5, Xbox Series consoles, and the original Nintendo Switch all experienced double-digit percentage declines compared to the previous year.
The primary catalyst for this spending boom is the Nintendo Switch 2. In its first three months on the market in the US, the console sold more than 2.4 million units, securing its position as the fastest-selling console in history. It has outpaced the previous record-holder, the PlayStation 4, by a full five percent at this stage. Furthermore, the Switch 2 is dramatically outperforming its predecessor, with sales running 77 percent higher than the original Switch did at the same point in its lifecycle.
Overall, consumer expenditure on game consoles in the US has climbed to $2.9 billion for the year so far, representing a 20 percent increase over the previous year. Interestingly, while the actual number of consoles sold has risen by 6.5 percent year-over-year, the average price has surged by 12.3 percent. This indicates that rising prices are the main factor behind the increased spending, not just higher unit volume. For example, the 512GB Xbox Series S began the year priced at $299.99 but now retails for $399.99. Similarly, the all-digital Xbox Series X saw its price jump from $449.99 to $599.99, and all models of the PlayStation 5 received a $50 price increase.
Even with these soaring costs, consumer demand has not yet diminished. While a premium model like the 2TB Xbox Series X in Galaxy Black at $799.99 is a tough pill to swallow, current prices have not yet reached historical extremes. For context, the Neo Geo handheld launched in 1990 at a price of $649.99, which translates to approximately $1,500 in today’s currency. This historical perspective shows that the bar for what constitutes an expensive gaming system remains remarkably high.
(Source: The Verge)
