Console shipments will fall 19.5% to 33.9 million units in 2026, according to a forecast from S&P Global Market Intelligence Kagan compiled in July, erasing the 13.5% growth that followed last year's Nintendo Switch 2 launch.

S&P attributes the reversal to console price hikes tied to an ongoing RAM and storage component crisis, plus a software slate the firm calls thin outside a handful of tentpole releases. Analyst Neil Barbour described the resulting pressure on demand in blunt terms.

"For now, the market faces a compounding problem: hardware that is either too old or too expensive for the median consumer, a software slate that is thin outside a handful of tentpole releases, and a macro environment that keeps any meaningful price relief off the table."

The forecast covers only home consoles from Microsoft, Sony, and Nintendo. S&P projects shipments bottoming out near 27.1 million units in 2027 before climbing to 37.4 million by 2030.

What hinges on the 2028 component outlook?

S&P's recovery path rests on a single assumption: that the component crisis eases enough by 2028 for Sony and Microsoft to ship next-generation hardware at $600 to $800.

"A critical assumption underlying our forecast's recovery period later in the decade is that the component crisis eases sufficiently by 2028 to allow Sony and Microsoft to bring next-generation hardware to market at price points in the $600 to $800 range," Barbour said.

Failure to clear that bar makes the post-2027 trajectory the most exposed variable in the model.

Where does each platform sit?

Nintendo Switch 2 — S&P forecasts 17.1 million units in 2026, comparable to the original Switch and Wii in their second years. Nintendo's own guidance points to a 16.9% decline to 16.5 million in the console's second fiscal year after launch. A $50 price hike and no near-term tentpole weigh on demand; Pokémon Wind and Waves arrives in late 2027.

PlayStation 5 — Sony shipped 17.1 million PS5 units across all models in 2025, down 15.2% year-on-year. S&P expects 13.2 million in 2026.

Sony raised prices across the line in April 2026: the base moved from $550 to $650, the digital edition from $500 to $600, and the PS5 Pro from $750 to $900.

Barbour questioned whether Grand Theft Auto 6 demand will offset the higher entry cost on a six-year-old device. S&P models a 2028 PlayStation 6 launch contributing 4 million units in its first year, scaling to 17.2 million by 2030.

Xbox Series X|S — Microsoft shipped 3.2 million units in 2025, the lowest annual total in S&P's records. Quarterly shipments fell below 500,000 for the first time in the dataset during Q1 2026.

The firm projects 2.5 million units in 2026 and "a rapid wind-down toward zero thereafter."

Barbour cited an uneven first-party slate, a subscription-first strategy that failed to lift hardware, and pricing that now sits $100 above a standard PS5.

What does Project Helix change for Xbox?

Microsoft's next-generation console, codenamed Project Helix, will support Xbox and PC games with backwards compatibility, and likely carry a higher price tag than the current generation. Barbour warned the approach could narrow the audience.

S&P models roughly 2 million units in the successor's launch year, scaling to 7.3 million by 2030. The forecast carries an unusually candid caveat.

"The actual outcome could look very different," Barbour said. "A fully open PC platform with Xbox branding would not really resemble a console and likely not be counted in this model."

Barbour added that S&P is splitting the difference between a proper Xbox successor and an Xbox-certification program with PC OEMs, and that readers should treat the post-2027 Microsoft trajectory as a range of outcomes contingent on decisions yet to be made or revealed.

The component crisis trajectory through 2028, the final Project Helix specification and price, and Grand Theft Auto 6's early sales signal on PS5 hardware will test the forecast's central assumptions within the next 18 months.