Game On: U.S. game spending grew 10% in September, 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 biggest new releases is Xbox Game Studios’ (MSFT) action role-playing game “The Outer Worlds 2.” The game, developed by “Fallout: New Vegas” maker Obsidian, releases October 29 for PC, Xbox Series X/S, and PlayStation 5 (SONY). Also out this week is Square Enix’s (SQNXF) “Dragon Quest I & II HD-2D Remake,” a remake of the first two games in the popular “Dragon Quest” RPG series. The game launches for PS5, Xbox Series X/S, PC, Nintendo Switch (NTDOY), and Switch 2 on October 30.

CIRCANA SEPTEMBER: Circana analyst Mat Piscatella said that September 2025 projected U.S. total spending on video game hardware, content and accessories grew 10% vs a year ago, to $4.8B. Several hit new releases, Nintendo Switch 2 hardware and non-mobile subscriptions, fueled the gains. September spending on video game hardware increased by 24% when compared to a year ago, reaching $324M. Nintendo Switch 2 sales were again able to offset the double-digit year-on-year percentage declines seen across PlayStation 5, Xbox Series and Switch. Nintendo Switch 2 was the best-selling video game hardware in both units and dollars across September and the 2025 year-to-date period, with PlayStation 5 ranking 2nd across these measures and time periods. Year-to-date video game hardware spending grew by 20% when compared to a year ago to $3.2B but trailed the $3.7B achieved in the year-to-date period ending September 2023.

September video game content spending increased by 11% when compared to a year ago, reaching $4.3B, Piscatella noted. The growth was driven by a 32% gain in non-mobile subscription spending, 12% growth in Console content, and a 4% increase in mobile. Take-Two’s (TTWO) “Borderlands 4” was the best-selling premium video game of September, debuting as the #3 best-selling game of 2025 year-to-date. It was September’s best-seller on both the Xbox and aggregated PC storefront charts. “Borderlands 4” generated the highest launch month dollar sales of any title in franchise history, nearly 30% higher than the previous best, “Borderlands 3.” Borderlands 4 was the first Borderlands title to launch as the best-selling game of its release month. Electronic Arts’ (EA) “EA Sports FC 26” debuted as the 3rd best-selling game in September full game dollar sales, and the 15th best-seller of 2025 year-to-date. It ranked among the top 7 best-selling games across each of the PlayStation, Xbox, Nintendo and aggregated PC storefront charts. Take-Two’s “NBA 2K26” became 2025’s best-selling game year-to-date during the September tracking month, supplanting Monster Hunter: Wilds. “NBA 2K26” was September’s 2nd best-selling title overall while leading on PlayStation platforms and ranking 2nd on Xbox. Other top-selling premium games for the month in the U.S. were Sony’s “Ghost of Yotei,” EA’s “Madden NFL 26,” Konami’s (KONMY) “Silent Hill f,” Sega’s (SGAMY) “Sonic Racing: CrossWorlds,” and Square Enix’s “Final Fantasy Tactics: The Ivalice Chronicles.”

XBOX: With declining hardware sales and a sharp focus on expanding Game Pass as a the core of its business, Microsoft’s Xbox unit appears to be making a number of notable changes to how it operates, with multiple stories in the past week underscoring this new approach. Most notably, Xbox president Sarah Bond said in an interview on Mashable last Tuesday that he company’s next-generation console will be a “very premium, very high-end curated experience.” Bond did not provide further details, saying such a console is “very far away.” Less than a week later, however, Windows Central’s Jez Corden reported that next-generation Xbox console will run a Windows operating system and come with a TV-optimized, console-style experience layered on top, according to sources. The console/PC hybrid would give players the option to use the standard Xbox console ecosystem or a Windows PC overlay, which means players would have access to PlayStation games on Steam, including exclusives like “God of War,” “Ghost of Tsushima,” and “Marvel’s Spider-Man,” Corden said, noting that PC-only games like “League of Legends” and “World of Warcraft” would also be playable on such a device.

Meanwhile, Bloomberg’s Jason Schreier and Dina Bass reported last week that Microsoft wants its gaming unit to produce profit margins far above the industry average, creating more pressure on its video game makers during a difficult time for the sector overall. Over the past two years, executives at the software and technology giant have established an across-the-board target of 30% “accountability margins,” a term the company uses instead of profit margins, the authors said, citing people familiar with the business. The gaming business has responded by canceling games, increasing prices for products and services, and laying off thousands of workers, the report said, noting the average profit margin in the video game industry recently has ranged between 17%-22%.

Looking to development, The Verge’s Tom Warren reported last week, citing sources familiar with the company’s plans, that Microsoft is significantly raising the price of its Xbox Development Kit, which is used by third-party developers to make Xbox games. The current Xbox dev kit will rise in price by 33% to $2,000 from $1,500, with Microsoft saying in an announcement to developers that the “adjustment reflects macroeconomic developments.” “We remain committed to providing high-quality tools and support for your development efforts,” the company said in the statement, which was seen by The Verge.

Lastly, Xbox made a major announcement at the end of last week: its HALO Studios unit is working on “Halo: Campaign Evolved,” a modernized remake of the single-player content of 2001 game “Halo: Combat Evolved,” which was a launch title for the very first Xbox console and became the company’s most prized intellectual property in gaming for the following two decades. Of note, the game will release for PC, Xbox Series X/S, and PlayStation 5 in 2026, marking the first time a game in the “Halo” franchise will release on a PlayStation console. The move marks the latest in the Microsoft units efforts to make its games available on more platforms, with games in the “Gears of War” and “Forza Horizon” series, previously exclusive to PC and Xbox consoles, making their PS5 debut this year as well.

‘POKEMON’ SALES: The Pokemon Company announced late last week that “Pokemon Legends: Z-A” had already sold 5.8M units worldwide since its October 16, 2025 release. The Pokemon Company, which is partially owned by Nintendo, noted that roughly half of those unit sales were for the Nintendo Switch 2 version, with the other half on the first Switch.

Meanwhile, “Pokemon Legends: Z-A” was the top-selling new release in Japan for the week of October 13-19, opening at 872,552 unit sales for Switch and 612,905 unit sales for Switch 2, totaling to 1,485,457 retail copies of the game sold, Famitsu reported. Other top-selling games in Japan for the week, according to Famitsu, were Nintendo’s “Mario Kart World,” “Super Mario Galaxy 1+2,” and “Donkey Kong Bananza,” Sony’s “Ghost of Yotei,” and EA’s “Battlefield 6.

Additionally, Circana’s Mat Piscatella said that “Legends: Z-A” had a “massive” U.S. retail launch, with first week physical unit and dollar sales of the game being the biggest for a new physical game launch since 2023’s “The Legend of Zelda: Tears of the Kingdom.”

UBISOFT: Several Ubisoft studios announced serious restructurings last week, with the company announcing a restructuring proposal for RedLynx as part of the company’s global efforts to “simplify, reduce costs, and ensure a stronger prioritization and efficiency across the company’s worldwide studio network.” Before making a decision on the proposal, Ubisoft RedLynx will negotiate the matter with its staff in collective negotiations. The collective negotiations primarily concern the production and administration teams. They do not concern the technology team working on Ubisoft’s Snowdrop game engine. The negotiations are scheduled to begin on October 30 and are expected to conclude toward the end of November. If materialized, this proposal would result in the reduction of maximum 60 positions.

Additionally, Ubisoft’s Massive Entertainment studio said in a statement, “As part of our ongoing evolution and long-term planning, we have realigned our teams and resources to strengthen our roadmap, ensuring our continued focus on The Division franchise and the technologies, including Snowdrop and Ubisoft Connect, that power our games. To support this transition responsibly, we introduced a voluntary career transition program, giving eligible team members the opportunity to take their next career step on their own terms, supported by a comprehensive package that includes financial and career assistance.”

coming to Switch 2 in 2026

Ubisoft’s “Assassin’s Creed Shadows,” which released earlier in 2025 for PC and other consoles, will launch on Switch 2 on December 2, 2025

EA announced a development tool partnership with Stability AI

Additionally, EA and the National Football League announced an expanded, multi-year exclusive agreement