US Video Game Console Sales Plummet 27% in November, Worst in 20 Years

United States – Video Game Industry

Video game console sales in the United States experienced a sharp decline in November, the worst performance for this vital month in over two decades, with consumer spending on consoles down by 27%. This decline is attributed to increasing pressures from rising prices, tariffs, and component costs.

According to data from research firm Circana, Americans spent only $695 million on consoles such as the Nintendo Switch 2 and PlayStation 5 in November, the lowest level recorded for this month since 2005, despite it traditionally being the peak shopping season before year-end holidays.

Price Pressures Demand

The report attributes this decline to a record increase in console prices, with the average price per unit surging by 11% to reach $439, the highest ever recorded for November.

These price hikes followed new US tariffs announced in April, which prompted companies like Sony, Nintendo, and Microsoft to expedite relocating production lines out of China, particularly to Vietnam, significantly raising operational costs.

Shift in Competitive Landscape

The market also witnessed a notable shift in competition, with Nintendo losing its lead in both unit sales and dollar sales to Sony's PlayStation 5 for the first time since the launch of the new generation Switch in June, raising questions about the long-term momentum of the new device.

AI Increases Pressures

Challenges are not limited to tariffs, as gaming companies now face a sharp increase in memory chip prices due to strong demand from AI companies and data centers, which have become a priority for advanced memory suppliers.

This situation has led to a shortage of DRAM chips used in gaming and consumer electronics, further driving up costs. In the case of Nintendo, estimates indicate that memory costs surged by about 41% during the current quarter, negatively impacting the company's stock, which lost over $15 billion in market value this month.

Limited Positive Signals

Despite the bleak picture, the data is not devoid of some bright spots for Nintendo, as new games like Kirby Air Riders and Pokemon Legends: Z-A achieved strong sales, entering the list of the top 10 best-selling games in the US during November.

The Japanese company aims to enhance its exclusive game library for the Switch 2, attempting to persuade users to upgrade or attract new players to its entertainment ecosystem.

Market Reading

This weak performance reflects a shift in American consumer behavior, where rising prices have become a critical factor even in entertainment sectors, highlighting the indirect impact of the AI boom and trade tensions on traditional consumer industries like video gaming.