Game On: U.S. game spending jumps 11% in August, says Circana

“Game On” is The Fly’s weekly recap of the stories powering up or beating down video game stocks.

NEW RELEASES: Among this week’s most notable new releases is Nintendo’s (NTDOY) action role-playing game “Pokemon Legends: Z-A,” which launches for Switch and Switch 2 on October 16. Also out this week is Ubisoft’s (UBSFY) dance simulation “Just Dance 2026 Edition,” which comes out October 14 for Switch, Switch 2, PlayStation 5 (SONY), and Xbox Series X/S (MSFT).

CIRCANA AUGUST: Circana analyst Mat Piscatella (TTWO) “NBA 2K26,” mobile spending, and Nintendo Switch 2 sales helping lift total projected spending across video game hardware, content and accessories to $4.7B. The release of NBA 2K26 in the August tracking month as compared to September a year ago, a 6% increase in mobile video game spending, and the continued strong Nintendo Switch 2 launch fueled August growth. Monthly hardware spending increased by 32% when compared to a year ago, to $312M. Nintendo Switch 2 sales were able to offset double-digit percentage declines across each of PlayStation 5, Xbox Series, and Switch. With 2.4M units sold launch-to-date over its first 3 months market, Nintendo Switch 2 is now 5% ahead of the previous record setting pace of PlayStation 4, which sold 2.2M units during the 3 months ending January 2014. Nintendo Switch 2 unit sales are trending 77% ahead the time-aligned sales of the original Nintendo Switch. Year-to-date video game hardware spending has grown 20% versus a year ago, reaching $2.9B. Unit sales are up 6.5% year-on-year, with the average selling price increasing by 12.3%, to $453 per unit sold.

Meanwhile, August video game content spending increased 11% when compared to a year ago, to $4.2B. The growth was partially driven by a 21% jump in Console content spending, aided by the shift of NBA 2K26 to the August tracking period from September a year ago. Year-to-date spending on non-mobile video game subscription services is now 19% higher than a year ago, at $3.6B. Other top-selling premium games in August in the U.S. include EA’s (EA) “Madden NFL 26,” Take-Two’s “Mafia: The Old Country,” Konami’s (KONMY) “Metal Gear Solid Delta: Snake Eater,” EA’s “EA Sports College Football 26,” Microsoft’s Gears of War: Reloaded,” and Nintendo’s “Donkey Kong Bananza.”

‘GHOST OF YOTEI’ LAUNCH: Sony’s latest PlayStation 5 exclusive title “Ghost of Yotei” is one of the company’s most successful first-party launches of the current console generation, having sold over 1.6M copies through to consumers, translating into nearly $100M in revenue, according to Alinea Analytics’ Rhys Elliott. The game is a little slower than its 2020 PlayStation 4 predecessor “Ghost of Tsushima,” which sold 2M units in three days, Elliott says, noting that “Tsushima” released when the PS4 had an installed base of roughly 110M compared to the PS5’s current roughly 80M, as well as the COVID lockdown-induced gaming boost. “Yotei” is PS5’s strongest first-party launch title since 2023’s “Spider-Man 2,” outselling other PS5 exclusive titles such as “Astro Bot” and “Death Stranding 2: On the Beach.”

SONY/AMD: Mark Cerny, currently a consultant at Sony Interactive Entertainment and the architect of many of its PlayStation video game systems, said the company’s next console is coming in “a few years time,” The Verge’ Cameron Faulkner reported. In a YouTube video, Cerny joined Jack Hyunh, senior VP and GM of AMD’s (AMD) computing and graphics group, to discuss the co-developed advancements in graphics technology that will be available on the next console, which is believed to be called the PlayStation 6, the author noted. The two added that such technologies are in “very early days” and “only exist in simulation right now,” the author said.

ROBLOX: Last week, Citi raised the firm’s price target on Roblox (RBLX) to $155 from $152 and reiterated a Buy rating on the shares ahead of the Q3 report on October 30. The firm says data from RoMonitor indicate a Q3 bookings and adjusted EBITDA beat for Roblox. Citi also expects the company to increase its 2025 outlook. As a result, it opened an “upside 30-day catalyst watch” on the shares.

A day later, MoffettNathanson upgraded Roblox to Neutral from Sell. While the firm still struggles to “make sense of the valuation,” it notes that user metrics have “exploded higher” and that the inflection has been driven by new, viral experiences. Roblox is “playing a different game” and competition is few and far between for experiences that lean into quick, socially driven, and “viral” interactive experiences, the analyst tells investors.

Meanwhile, Morgan Stanley this week maintained an Overweight rating and $170 price target on Roblox while noting that the firm’s bull case values the stock at $300 per share. The company is a clear leader in the next generation of entertainment platforms with a path to over one billion users by 2030, the analyst tells investors in a research note. The firm adds that it sees parallels to user-generated content winners like YouTube while also citing Roblox’s “strong position in AI.”