2025 was a tumultuous year for the U.S. video game industry, marred by layoffs, closures, and various controversies. But new data from market research firm Circana shows that increased consumer spending could propel the sector to all-new heights in 2026. The latest forecast report from Circana’s Mat Piscatella projects industry growth of about 3 percent in the year ahead, largely due to continued Nintendo Switch 2 sales and the upcoming launch of Rockstar Games’ Grand Theft Auto 6.
Last year, the U.S. video game industry saw slight growth driven by record-setting sales of new hardware (namely Nintendo’s Switch 2 handheld), rising interest in (and pricing of) subscription-based platforms like Xbox Game Pass, and more. Circana’s Games Market Dynamics report shows U.S. consumers spent an estimated $60.7 billion on video game hardware, software, and peripherals in 2025 — a 1.4 percent year-on-year increase from $59.8 billion in 2024.
This year, Circana estimates that American consumers will spend 3 percent more on industry-related purchases, amounting to about $62.8 billion. Circana’s newest projection eclipses the industry’s all-time high of $61.7 billion set in 2021.
“The 2026 U.S. video game market brings great opportunity — and risk,” said Piscatella. “While overall hardware faces headwinds, a stellar slate of software and strong subscription engagement suggests a particularly exciting year. Hold on —2026 could prove to be one heck of a ride.”
Piscatella pinpoints potential industry pitfalls in 2026
Though gaming-related spending spiked last year, Piscatella suggests that higher prices and constrained availability of PC components such as RAM, GPUs, CPUs, and storage could complicate hardware sales. As AI data center construction and operation surge, so do associated costs. While players will likely pay more, these games, parts, and peripherals may also be harder to find.
On February 4, Valve said component shortages could impact the availability of its three new products: the Steam Controller, Steam Machine, and Steam Frame. In a message posted to Steam, the company named “memory and storage shortages” as a primary hurdle in its hardware release schedule.
When we announced these products in November, we planned on being able to share specific pricing and launch dates by now. But the memory and storage shortages you’ve likely heard about across the industry have rapidly increased since then. The limited availability and growing prices of these critical components mean we must revisit our exact shipping schedule and pricing (especially around Steam Machine and Steam Frame).
Our goal of shipping all three products in the first half of the year has not changed. But we have work to do to land on concrete pricing and launch dates that we can confidently announce, being mindful of how quickly the circumstances around both of those things can change. We will keep you updated as much as we can as we finalize those plans as soon as possible.
Valve’s Steam Machine won’t be the only new hardware affected by continued component scarcities. One new Bloomberg report says tech figureheads like Tesla’s Elon Musk and Apple’s Tim Cook are warning that widespread chip shortages are “a global crisis in the making … Since the start of 2026, Tesla Inc., Apple Inc. and a dozen other major corporations have signaled that the shortage of DRAM, or dynamic random access memory — the fundamental building block of almost all technology — will constrain production.”
We’re only about six weeks into the new year, and despite some concerns, Piscatella believes the “2026 US video game market brings great opportunity – and risk.” He continues: “While overall hardware faces headwinds, a stellar slate of software and strong subscription engagement suggests a particularly exciting year.”
