Circana Projects U.S. Gaming Industry Spending to Reach $62.8B in 2026
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 11 2026
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: 20.120
Low
34.00
Averages
34.00
High
34.00
Current: 20.120
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.
Sony Group Bets Nearly $4B on Music Rights Acquisition
- Major Acquisition Deal: Sony Group is in exclusive negotiations with Blackstone to acquire Recognition Music Group through a joint venture with Singapore's GIC, with a deal value between $3.5B and $4B, involving rights to over 45,000 songs, showcasing Sony's ambition in the music rights sector.
- Long-Term Asset Investment: This acquisition represents a significant investment in music rights, reflecting a trend among major entertainment companies to treat hit songs as premium long-term assets, expected to generate steady cash flow from streaming, licensing, and advertising across various media.
- Intensifying Market Competition: As record labels, private equity firms, and other investors compete for music catalogs that can yield predictable returns, Sony's acquisition strategy is particularly crucial in this competitive landscape, potentially solidifying its position in the music industry.
- Strategic Implications: By acquiring these rights, Sony not only enhances its music asset portfolio but also positions itself to leverage these copyrights across multiple media platforms in the future, thereby improving the sustainability and profitability of its overall business.
See More
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- Positive Market Reaction: Following media reports of Sony finalizing the acquisition, Sony's stock rose about 3% on Wednesday, although the deal may face competition from higher bids, indicating market optimism regarding the transaction.
- Shifting Industry Trends: The music rights market is transitioning from a niche investment to a massive asset class dominated by private equity firms and sovereign wealth funds, with Sony's acquisition plan further solidifying this trend and reflecting ongoing investor interest in music catalogs.
- Recent Deal Context: This acquisition follows the multi-billion-dollar mergers of Concord with BMG and the sale of Kobalt to Primary Wave Music, highlighting that despite a slowdown in global music market growth, investors continue to pour billions into music catalogs.
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- Strategic Shift: Sharma emphasized the need to evolve work methods and organizational structures to accelerate product delivery and reduce internal communication time, reflecting the company's strategic transformation in response to competitive pressures.
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See More
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- Executive Appointments: New Xbox CEO Asha Sharma is bringing in four executives from the CoreAI engineering group to enhance Xbox's technical and consumer expertise, addressing the challenge of four revenue declines in the past six quarters.
- Organizational Change: In a memo, Sharma emphasized the need to evolve work methods and organizational structure to accelerate product delivery and reduce internal communication time, thereby enhancing Xbox's market competitiveness through better community engagement.
- Market Competition Pressure: Data from VGChartz indicates that Xbox Series X and Series S were outsold by Nintendo Switch and Sony PlayStation 5 in Q1, highlighting Xbox's insufficient market competitiveness and the urgent need for strategic adjustments to attract gamers.
- Team Restructuring: Newly appointed executives include Jared Palmer, who will oversee product, engineering, and developer tools, and Tim Allen, who will lead design, reflecting Sharma's focus on team capabilities to drive Xbox's growth and innovation.
See More
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- Surge in Console Sales: AMD's collaboration with Microsoft and Sony to provide semi-custom processors for their next-generation consoles is expected to trigger a major upgrade cycle with the anticipated launch in the 2027 holiday season, further driving revenue growth for AMD.
- Profitability Enhancement: The company expects to achieve earnings per share exceeding $20 in the next five years, translating to an annualized growth rate of nearly 37%, which could see its stock price soar to $660, more than double its current valuation, indicating strong market potential.
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See More
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- Semi-Custom Business Revival: The semi-custom chip segment is set to receive a significant boost from the new generation of gaming consoles from Microsoft and Sony, which is likely to trigger an upgrade cycle and enhance AMD's competitive position in the gaming market.
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- Market Valuation Increase: If AMD trades at a 33x earnings multiple based on a projected $20 earnings per share in five years, its stock price could soar to $660, more than double its current price, reflecting the market's optimistic outlook on its future growth prospects.
See More
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- Major Acquisition Deal: Sony Group is in exclusive negotiations with Blackstone to acquire Recognition Music Group through a joint venture with Singapore's GIC, with a deal value between $3.5B and $4B, involving rights to over 45,000 songs, showcasing Sony's ambition in the music rights sector.
- Long-Term Asset Investment: This acquisition represents a significant investment in music rights, reflecting a trend among major entertainment companies to treat hit songs as premium long-term assets, expected to generate steady cash flow from streaming, licensing, and advertising across various media.
- Intensifying Market Competition: As record labels, private equity firms, and other investors compete for music catalogs that can yield predictable returns, Sony's acquisition strategy is particularly crucial in this competitive landscape, potentially solidifying its position in the music industry.
- Strategic Implications: By acquiring these rights, Sony not only enhances its music asset portfolio but also positions itself to leverage these copyrights across multiple media platforms in the future, thereby improving the sustainability and profitability of its overall business.
See More
Sony Plans $4 Billion Acquisition of Recognition Music Group
- Acquisition Overview: Sony Group plans to acquire Recognition Music Group through a joint venture with Singapore's GIC for between $3.5 billion and $4 billion, as the company owns rights to over 45,000 songs and 150 catalogs, marking one of the largest deals in the music industry.
- Positive Market Reaction: Following media reports of Sony finalizing the acquisition, Sony's stock rose about 3% on Wednesday, although the deal may face competition from higher bids, indicating market optimism regarding the transaction.
- Shifting Industry Trends: The music rights market is transitioning from a niche investment to a massive asset class dominated by private equity firms and sovereign wealth funds, with Sony's acquisition plan further solidifying this trend and reflecting ongoing investor interest in music catalogs.
- Recent Deal Context: This acquisition follows the multi-billion-dollar mergers of Concord with BMG and the sale of Kobalt to Primary Wave Music, highlighting that despite a slowdown in global music market growth, investors continue to pour billions into music catalogs.
See More
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- Leadership Changes: Xbox CEO Asha Sharma announced in a memo the appointment of new leaders to address the decline in gaming revenue over the past six quarters, indicating the company's urgency to restore growth.
- Talent Acquisition: The newly appointed leaders primarily hail from the CoreAI team, bringing consumer and technical expertise aimed at enhancing Xbox's product, engineering, and developer tools capabilities, thereby strengthening market competitiveness.
- Strategic Shift: Sharma emphasized the need to evolve work methods and organizational structures to accelerate product delivery and reduce internal communication time, reflecting the company's strategic transformation in response to competitive pressures.
- Market Challenges: Xbox's sales were surpassed by the Nintendo Switch and Sony PlayStation 5 in the first quarter, highlighting the need for Microsoft to implement more effective measures to attract gamers in a fiercely competitive market.
See More
Microsoft's New Xbox CEO Appoints Executives
- Executive Appointments: New Xbox CEO Asha Sharma is bringing in four executives from the CoreAI engineering group to enhance Xbox's technical and consumer expertise, addressing the challenge of four revenue declines in the past six quarters.
- Organizational Change: In a memo, Sharma emphasized the need to evolve work methods and organizational structure to accelerate product delivery and reduce internal communication time, thereby enhancing Xbox's market competitiveness through better community engagement.
- Market Competition Pressure: Data from VGChartz indicates that Xbox Series X and Series S were outsold by Nintendo Switch and Sony PlayStation 5 in Q1, highlighting Xbox's insufficient market competitiveness and the urgent need for strategic adjustments to attract gamers.
- Team Restructuring: Newly appointed executives include Jared Palmer, who will oversee product, engineering, and developer tools, and Tim Allen, who will lead design, reflecting Sharma's focus on team capabilities to drive Xbox's growth and innovation.
See More
AMD's Game Console Business Shows Promising Growth Prospects
- Data Center Growth: AMD anticipates over 60% annualized revenue growth in its data center business over the next three to five years, which could translate into multibillion-dollar growth opportunities, particularly with the widespread deployment of AI accelerator chips enhancing overall performance.
- Surge in Console Sales: AMD's collaboration with Microsoft and Sony to provide semi-custom processors for their next-generation consoles is expected to trigger a major upgrade cycle with the anticipated launch in the 2027 holiday season, further driving revenue growth for AMD.
- Profitability Enhancement: The company expects to achieve earnings per share exceeding $20 in the next five years, translating to an annualized growth rate of nearly 37%, which could see its stock price soar to $660, more than double its current valuation, indicating strong market potential.
- Historical Sales Review: Over the past five years, combined sales of the PS5 and Xbox Series consoles reached 120 million units, with AMD's gaming revenue hitting $3.9 billion in 2022, a 51% increase, showcasing its robust competitiveness and growth potential in the gaming market.
See More
AMD Optimistic About Data Center Business Prospects
- Data Center Growth Potential: AMD anticipates over 60% annual revenue growth for its data center business in the next three to five years, primarily driven by partnerships with OpenAI and Meta, which are expected to generate multibillion-dollar growth opportunities for the company.
- Semi-Custom Business Revival: The semi-custom chip segment is set to receive a significant boost from the new generation of gaming consoles from Microsoft and Sony, which is likely to trigger an upgrade cycle and enhance AMD's competitive position in the gaming market.
- Strong Financial Performance: AMD's non-GAAP earnings per share reached $4.17 in 2025, with expectations to exceed $20 in the next three to five years, indicating an impressive annualized growth rate of nearly 37%, showcasing the company's robust profitability and growth potential.
- Market Valuation Increase: If AMD trades at a 33x earnings multiple based on a projected $20 earnings per share in five years, its stock price could soar to $660, more than double its current price, reflecting the market's optimistic outlook on its future growth prospects.
See More
