Xbox’s Hardware Problem: September Sales Drop To New Low Amid Sony’s Market Dominance

September saw a surge in video game spending, but Xbox had a bleak month. New Circana data show Xbox Series hardware fell 27% year-over-year to an all-time September low, beating the previous record low set a year ago.

How did Sony and Nintendo compare? PlayStation 5 sales grew 22% in units and 43% in dollar sales, while Nintendo saw Switch 2 sales fall by 12% year-on-year. Sony dominated the market last month, though PS5 consoles cost more today than a year ago, and last month also saw reports of PS5 Pro stock selling out quickly, presumably ahead of the November launch of Grand Theft Auto 6. As for the Switch 2, it started its run in June 2025 with strong launch sales, but that momentum has begun to slow down. It's still outpacing the original Switch console by a comfortable margin, and it's Nintendo's fastest-selling system.

So what's going on with Xbox? There are various factors to take into consideration, all of which point to strategies that have emphasized that an Xbox isn't necessary for playing first-party Xbox games. Microsoft's multiplatform strategy, cloud gaming focus, and a move away from a console-under-the-TV model--remember the "This Is An Xbox" advertising?--created a downward trajectory for Xbox console sales. It's a steep decline, but one that Xbox is looking to reverse as it continues to overhaul its business by once again focusing on console exclusives, quietly sweeping the This Is An Xbox campaign under the rug, extending the life of the Series X|S consoles with new upgrades, and preparing for the expensive Project Helix hardware.

It's the clearest example yet of how different strategies can result in different outcomes. While several of Sony's decisions--including the decision to go all-digital in 2028--haven't been popular, it has largely stayed on brand with how it markets the PS5. The GTA 6 effect is also a powerful factor, as it has been promoting the game heavily ahead of its November 19 launch. On the other hand, the decision to reimagine Xbox as a brand split across multiple devices has naturally led to a decline in console sales, but Microsoft is attempting to reverse course and recapture its glory days under new Xbox CEO Asha Sharma--even if that "reset" means sweeping layoffs.

In related news, you can see how Marvel's Wolverine did surprisingly well last month, and which game broke Resident Evil Requiem's grip on the US market.