November was unexpectedly challenging for video game sales, with both hardware and physical software seeing their lowest figures since 1995. This period, typically a high point in the retail calendar, saw all three major console manufacturers experiencing declines. Notably, Xbox is facing significant difficulties.
Xbox Sales Plummet
Reports suggest that Xbox Series consoles saw a dramatic 70% drop in dollar sales year-over-year. This downturn is stark, even as other consoles like the PS5 experienced a 40% decline, and combined sales of the new Nintendo Switch 2 and Switch 1 fell by 10%. It’s particularly notable that Xbox hit an all-time low for console unit sales in the U.S. for November, driven by factors such as the absence of new hardware and a general decline in interest. From 2023 to 2024, Xbox Series sales dipped 29%, following a 20%+ drop from 2022 to 2023. Interestingly, 2022 marked the last positive year for Xbox sales, with an 11% increase from 2021.
In 2025, Xbox faces challenges with its rising costs. The average price per unit increased by over 30% due to substantial price hikes. This includes notable increases in September affecting all Xbox Series models. The Series S, once retailing at $300, now costs $400. Concerns loom over further price increases due to rising RAM costs, linked to AI demands. These hikes are partly attributed to U.S. tariffs affecting production countries, and with the economy in a tough spot, consumers are hesitant to invest in consoles.
Price Competition and Market Trends
Although PlayStation and Nintendo Switch face similar challenges, their price hikes have been less severe. The PS5 saw a $50 increase, and Nintendo raised prices for the original Switch and accessories, while maintaining the new console’s higher initial price. This situation leaves the Xbox Series S and PS5 All-Digital Edition both at $400, with the Nintendo Switch 2 at $450. Consequently, consumers are either avoiding buying consoles or opting for more affordable options like the NEX Playground, which outsold the Xbox Series in November.
The Xbox Series continues to struggle, partially due to its departure from exclusive titles and consistent price increases. Xbox’s hardware sales peaked in November 2011, with its second-best November in 2014. Despite big releases like Call of Duty: Black Ops 7 on Game Pass, the hardware has yet to regain its former success. Xbox’s leadership still envisions a future for hardware, hinting at a new console that would be a PC/console hybrid, but its strategy seems to be pivoting towards multi-platform rather than focusing on exclusives.
As Microsoft explores releasing major first-party games on other platforms and rethinks its approach, the relevance of hardware sales might be less important in its evolving strategy.