Circana Projects U.S. Gaming Industry Spending to Reach $62.8B in 2026
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Should l Buy SONY?
Circana's Mat Piscatella said that the U.S. video game industry enters 2026 with the potential to reach a new record high in consumer spending, following a year of slight growth driven by new hardware, rising subscription engagement, and robust player demand across platforms. According to Circana's latest Games Market Dynamics report, total U.S. consumer spending on video game hardware, content, and accessories reached $60.7B in 2025, marking a +1.4% increase over 2024. Circana projects U.S. video game industry spending to rise +3% to $62.8B in 2026, surpassing the current all-time high of $61.7B set in 2021. This growth is expected to be fueled by the second year of Nintendo Switch 2 (NTDOY), unprecedented anticipation for Take-Two's (TTWO) "Grand Theft Auto VI," and continued strength in subscription-based content. Key opportunities and challenges for the gaming industry in 2026, according to Circana, include: Switch 2 sales; "GTA VI" headlining a software surge; subscription spending remaining strong; hardware pressure from component costs; consumer behavior shifts, and emerging disruptors, including Valve's upcoming Steam Machines. Other publicly traded companies in the space include Electronic Arts (EA), GameStop (GME), NetEase (NTES), Tencent (TCEHY), Microsoft (MSFT), Sony (SONY), and Ubisoft (UBSFY).
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Analyst Views on SONY
Wall Street analysts forecast SONY stock price to rise
1 Analyst Rating
1 Buy
0 Hold
0 Sell
Moderate Buy
Current: 22.950
Low
34.00
Averages
34.00
High
34.00
Current: 22.950
Low
34.00
Averages
34.00
High
34.00
About SONY
Sony Group Corp is a Japan-based company engaged in the games & network services (G&NS), music, movies, entertainment technology & services (ET&S), imaging & sensing solutions (I&SS) and other businesses. It has seven business segments. G&NS segment is involved in network service business, the manufacture and sale of home video game consoles and software. The Music segment mainly includes music production, music publishing and video media platform businesses. The Movies segment mainly includes film production, television program production and media network businesses. The ET&S field mainly includes the television business, audio, video business, still image, video camera business, smartphone business and Internet-related service business. The I&SS segment mainly includes the image sensor business. The Financial segment is involved in the insurance business and banking business. The Other segment consists of activities such as disc manufacturing business and recording media business.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
U.S. Video Game Industry Spending to Rise 3% in 2026
- Market Growth Forecast: According to Circana's latest projections, total spending in the U.S. video game industry is expected to rise 3% to $62.8 billion by 2026, indicating a strong recovery in the industry, especially following the all-time high of $61.7 billion set in 2021.
- Gaming Frenzy Drivers: Circana's video game industry advisor Mat Piscatella noted that the second year of Nintendo Switch 2 and unprecedented anticipation for Grand Theft Auto VI will drive demand for content and hardware, further invigorating the market.
- Consumer Behavior Shifts: It is estimated that about 38% of consumers would purchase fewer full-price games at launch due to tariffs or other factors, while 34% would wait longer for discounts, and 27% would spend more time on free-to-play games, reflecting increased price sensitivity in the market.
- Hardware Market Challenges: Piscatella warned that the hardware segment is expected to face challenges as surging costs for RAM, GPUs, CPUs, and storage driven by AI data center demand could limit availability and raise prices, impacting overall market performance.
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- Performance Decline Warning: While PayPal reported a 9% increase in total payment volume, a 5% drop in transactions per active account highlights challenges in user growth and profitability, potentially affecting future market competitiveness.
- New CEO Challenges: The appointment of Enrique Lores raises concerns due to his lackluster performance at HP, leading investors to question his ability to effectively drive PayPal's transformation, which may impact the company's strategic direction.
- Market Valuation Slump: With a current P/E ratio around 8.5, significantly below market averages, PayPal is seen as a value investment opportunity; however, investor concerns about future growth may lead to further stock price pressure.
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- Executive Shakeup Impact: PayPal's CEO Alex Chris is replaced after less than two years, leading to a nearly 20% drop in stock price, indicating investor unease about the company's future direction amidst challenges in the payment processing sector.
- Performance Decline Warning: Despite a 5% drop in transaction volume over the past year, PayPal is focusing on its most profitable products, yet skepticism about new CEO Enrique Lores' capabilities has resulted in significant stock volatility.
- Investor Confidence Eroded: PayPal's stock has fallen approximately 27% during Chris's tenure and nearly 43% from its peak, reflecting a decline in investor trust in management, particularly in a fiercely competitive market.
- Uncertain Future Outlook: Although PayPal's current P/E ratio is just 8.5, significantly below market levels, some analysts view this as a potential value trap, while others believe there are still growth opportunities under new leadership.
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- U.S. Buildout Acceleration: While TSMC is ramping up its expansion in Arizona, analysts expect that less than 15% of its most advanced chip production will relocate to the U.S., contradicting the U.S. Commerce Secretary's goal of shifting 40% of Taiwan's supply chain to the U.S. by 2029, indicating limited U.S. market integration.
- Tariff Impact Analysis: Following TSMC's commitment to invest $165 billion in Arizona, President Trump reduced tariffs on Taiwanese imports from 32% to 15%, highlighting TSMC's significance in the global supply chain and its sensitivity to U.S. policy changes.
- Stock Price Dynamics: TSMC shares rose 1.40% to $335.36 during premarket trading on Friday, approaching its 52-week high of $351.33, reflecting positive market sentiment towards its expansion plans.
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- Movie Trailer Lineup: Comcast and Disney are set to feature multiple upcoming movie trailers during Super Bowl LX, including family-friendly films and less suitable options like 'Scream 7' and 'Disclosure Day', indicating a significant advertising investment from both companies.
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- Upgraded Full-Year Outlook: The company raised its full-year operating profit forecast by 8% to ¥1.54 trillion and revenue outlook by 3% to ¥12.3 trillion, indicating optimism about future performance, particularly in the Game & Network Services, Music, and I&SS sectors.
- Increased Stock Buyback: Sony has raised its stock buyback plan to ¥150 billion, aiming to enhance shareholder returns and boost market confidence, despite its shares declining nearly 3% in U.S. market trading.
- Mixed Segment Performance: While the Game & Network Services segment saw a 19% increase in operating profit to ¥141 billion, the Entertainment, Technology & Services unit experienced a significant profit decline, highlighting shifts in market demand and increasing competitive pressures.
See More
U.S. Video Game Industry Spending to Rise 3% in 2026
- Market Growth Forecast: According to Circana's latest projections, total spending in the U.S. video game industry is expected to rise 3% to $62.8 billion by 2026, indicating a strong recovery in the industry, especially following the all-time high of $61.7 billion set in 2021.
- Gaming Frenzy Drivers: Circana's video game industry advisor Mat Piscatella noted that the second year of Nintendo Switch 2 and unprecedented anticipation for Grand Theft Auto VI will drive demand for content and hardware, further invigorating the market.
- Consumer Behavior Shifts: It is estimated that about 38% of consumers would purchase fewer full-price games at launch due to tariffs or other factors, while 34% would wait longer for discounts, and 27% would spend more time on free-to-play games, reflecting increased price sensitivity in the market.
- Hardware Market Challenges: Piscatella warned that the hardware segment is expected to face challenges as surging costs for RAM, GPUs, CPUs, and storage driven by AI data center demand could limit availability and raise prices, impacting overall market performance.
See More
PayPal's CEO Change Sparks Stock Volatility
- Executive Shakeup Impact: PayPal's CEO Alex Chris is replaced after less than two years, resulting in a nearly 20% drop in stock price following earnings reports, indicating strong market reaction to management changes that could undermine investor confidence.
- Performance Decline Warning: While PayPal reported a 9% increase in total payment volume, a 5% drop in transactions per active account highlights challenges in user growth and profitability, potentially affecting future market competitiveness.
- New CEO Challenges: The appointment of Enrique Lores raises concerns due to his lackluster performance at HP, leading investors to question his ability to effectively drive PayPal's transformation, which may impact the company's strategic direction.
- Market Valuation Slump: With a current P/E ratio around 8.5, significantly below market averages, PayPal is seen as a value investment opportunity; however, investor concerns about future growth may lead to further stock price pressure.
See More
PayPal CEO Change Triggers Significant Stock Drop
- Executive Shakeup Impact: PayPal's CEO Alex Chris is replaced after less than two years, leading to a nearly 20% drop in stock price, indicating investor unease about the company's future direction amidst challenges in the payment processing sector.
- Performance Decline Warning: Despite a 5% drop in transaction volume over the past year, PayPal is focusing on its most profitable products, yet skepticism about new CEO Enrique Lores' capabilities has resulted in significant stock volatility.
- Investor Confidence Eroded: PayPal's stock has fallen approximately 27% during Chris's tenure and nearly 43% from its peak, reflecting a decline in investor trust in management, particularly in a fiercely competitive market.
- Uncertain Future Outlook: Although PayPal's current P/E ratio is just 8.5, significantly below market levels, some analysts view this as a potential value trap, while others believe there are still growth opportunities under new leadership.
See More
TSMC Expands Manufacturing Footprint Amid Risks
- Japan Expansion Strategy: TSMC's plan to manufacture advanced chips in Japan aims to mitigate uncertainties from U.S. tariff policies and potential Chinese blockades, thereby enhancing supply chain resilience, with analysts noting this move will help protect the company from fluctuations in U.S. import tariffs.
- U.S. Buildout Acceleration: While TSMC is ramping up its expansion in Arizona, analysts expect that less than 15% of its most advanced chip production will relocate to the U.S., contradicting the U.S. Commerce Secretary's goal of shifting 40% of Taiwan's supply chain to the U.S. by 2029, indicating limited U.S. market integration.
- Tariff Impact Analysis: Following TSMC's commitment to invest $165 billion in Arizona, President Trump reduced tariffs on Taiwanese imports from 32% to 15%, highlighting TSMC's significance in the global supply chain and its sensitivity to U.S. policy changes.
- Stock Price Dynamics: TSMC shares rose 1.40% to $335.36 during premarket trading on Friday, approaching its 52-week high of $351.33, reflecting positive market sentiment towards its expansion plans.
See More
Super Bowl LX Ads Cost Up to $10 Million for 30 Seconds
- High Advertising Costs: Super Bowl LX commands a staggering $8 million to $10 million for a 30-second ad spot, enticing numerous companies to showcase their products and brands during the NFL championship on February 8, which is expected to attract over 100 million viewers.
- Movie Trailer Lineup: Comcast and Disney are set to feature multiple upcoming movie trailers during Super Bowl LX, including family-friendly films and less suitable options like 'Scream 7' and 'Disclosure Day', indicating a significant advertising investment from both companies.
- Disney's Advertising Strategy: Disney will unveil the trailer for its first Star Wars theatrical film since 2018, alongside ads for 'Hopper' and 'Toy Story 5', continuing its tradition of frequently showcasing movie trailers during the Super Bowl.
- Lionsgate's Comeback: Lionsgate will debut the trailer for the Michael Jackson biopic 'Michael', marking the company's first Super Bowl ad since 2016, demonstrating confidence in this highly anticipated music biopic.
See More
Sony Reports Q3 Profit Beat Driven by Imaging Solutions
- Significant Profit Growth: Sony's Q3 operating profit reached ¥515 billion, a 22% year-over-year increase that surpassed market expectations of ¥460 billion, primarily driven by strong performance in the Imaging & Sensing Solutions segment, reflecting positive impacts from the recovery in the global smartphone market.
- Upgraded Full-Year Outlook: The company raised its full-year operating profit forecast by 8% to ¥1.54 trillion and revenue outlook by 3% to ¥12.3 trillion, indicating optimism about future performance, particularly in the Game & Network Services, Music, and I&SS sectors.
- Increased Stock Buyback: Sony has raised its stock buyback plan to ¥150 billion, aiming to enhance shareholder returns and boost market confidence, despite its shares declining nearly 3% in U.S. market trading.
- Mixed Segment Performance: While the Game & Network Services segment saw a 19% increase in operating profit to ¥141 billion, the Entertainment, Technology & Services unit experienced a significant profit decline, highlighting shifts in market demand and increasing competitive pressures.
See More
