Often predicted to be in decline, the console market is proving resilient, still accounting for 20% of global gaming market revenue. Better yet, it is currently buzzing with new products.
Atari, Amstrad, Sega, Nintendo, Sony... From the late 1980s through the 1990s, numerous companies fought to conquer the console market. And almost every player marketed both a home and portable model, such as Sega (Mega Drive and Game Gear) and Nintendo (NES and Game Boy). But for the past 15 years or so, the market has been dominated by three competitors: Microsoft (Xbox), Sony (PlayStation) and Nintendo (Switch).
Between these two periods, the imminent demise of consoles was regularly predicted, threatened by the widespread adoption of PCs, tablets and smartphones. But this didn’t happen. “Consoles have survived everything (PCs, phones, cloud gaming),” says Otmane Jai, head of investments for the MJ & Cie family office. “They have a fairly stable customer base, as well as strong franchises that are driving the sector forward.” According to the Global Games Market report, published in September 2025 by Newzoo, 645 million people worldwide play on consoles, generating revenue of $45.9 billion.
Between 2025 and 2028, the sector’s revenue is expected to increase by 4.7% per year, which is more than the overall gaming market (+3%). “The console market will grow more than mobile and PC gaming over the next few years,” confirms Amaya Gutiérrez, head of investment and portfolio advisory at Rothschild & Co. “That’s where the strongest growth will be.”
But not all players are equally positioned to take advantage of these promising prospects. On the one hand, Nintendo stands largely alone, enjoying a virtual monopoly in its market segment. With the Switch, the Japanese giant has broken free from the race for dominance. It offers an affordable console that can be used in portable mode or connected to a TV, combined with iconic game franchises often developed in-house, such as Mario, Zelda, Pokémon and Donkey Kong. It’s a formula that has proven wildly successful. Nintendo has sold 150 million units of its Switch 1 and the company plans to sell 19 million units of the Switch 2 by March 2026, even though this model has only been on the market since last June. It is, quite simply, the strongest console launch in the history of video games.
“Nintendo’s success is based more on strong, exclusive and timeless franchises than on the machine itself,” says Walid Azar Atallah, senior portfolio manager at Thematics Asset Management. “If you want to play the latest Mario game, you can only do so on a Nintendo console. Thanks to this business model, the company has a very loyal customer base that spans generations.” With the successful launch of the Switch 2, Nintendo’s share price has soared, rising more than 60% year-on-year (as of 24 November). But be warned: “The console market is cyclical,” cautions Daniel Ernst, portfolio manager of digital innovations at Robeco. “The launch of a new generation of consoles boosts game sales.”
At the other end of the spectrum, Sony (PlayStation) and Microsoft (Xbox) are playing a different game than Nintendo. “Since the launch of the first Xbox in 2001, they have been engaged in a race to build the most powerful and high-performance machine,” says Brewen Latimier, manager at Colombus Consulting. “It’s a risky bet because both companies are forced to sell their consoles at a loss, while Nintendo sells its Switch at cost price or even with a slight profit.” To make their product profitable, both companies need to sell enough games and subscriptions. Without sufficient volume, it is impossible to offset hardware losses with software revenues. But to sell a lot of games, you have to sell a lot of consoles...
Sony and its PlayStation are now masters in their field. Microsoft has given up and is turning away from hardware
The problem: year after year, Xbox sales disappoint. Although Microsoft does not release any figures, analysts estimate that the Redmond-based company has sold 30 million Xbox Series consoles since its launch in 2020, while Sony has sold more than 80 million units of its PlayStation 5, released in the same year. This latest failure has fuelled rumours that Microsoft will no longer release home consoles as such, choosing instead to focus on the game publishing market. “Xbox hardware is dead,” said Laura Fryer, a former executive at the company, in a video posted in June on YouTube. This opinion is shared by Stéphane Rappeneau, co-founder of Weird Loop studio: “Sony and its PlayStation are now masters in their field. Microsoft has given up and is turning away from hardware.”
Although the Redmond-based company has half-heartedly denied this withdrawal, it has nevertheless broken the taboo of exclusive distribution of its games. Since 2024, Microsoft has ported several of its titles to PlayStation – Xbox’s competitor – such as Forza Horizon 5, Gears of War: Reloaded, Grounded, Hi-Fi Rush, Pentiment and Sea of Thieves. And in 2026, Halo, the iconic Xbox franchise, is set to arrive on PS5. “Microsoft put $75 billion on the table to buy Activision Blizzard studios (Call of Duty, Candy Crush) in 2023,” points out Stéphane Rappeneau. “The best way to make this purchase profitable is to distribute widely as possible, including on competing platforms.” But if you can play Microsoft games on PlayStation and PC, what’s the point of buying an Xbox? Notably, the porting of the Sonic game to Nintendo consoles in 2001-2002, then to Xbox and PlayStation, marked the end of Sega consoles...
Rather than competing with Sony in the living room, Microsoft is once again refocusing its attention to portable devices. Since last October, the company has been marketing the ROG Xbox Ally hybrid console, which, like the Switch or Steam Deck, allows users to play games on their sofa or on the go. But the American company has not entered this market alone, preferring to partner with Taiwanese company Asus, thus confirming its potential withdrawal from hardware in the long term. Furthermore, rather than just being a console, the ROG Xbox Ally is a PC disguised as one. With the touch of a button, users can switch to the Windows 11 screen to surf the internet, watch videos or send emails. In an interview with the TBPN podcast in October 2025, Microsoft CEO Satya Nadella seemed to confirm this shift towards computers: “It’s funny that people see the console and the PC as two different things. We designed the console because we wanted to create a PC optimised for gaming.”
Valve joins the fray
So will Sony soon be the only player in the home console market? No. In November, the American company Valve announced the launch in the first quarter of 2026 of a machine dedicated to television gaming, the Steam Machine, with power comparable to the PS5. To understand the impact this new console could have on the market, you need to know what Valve is, a giant unknown to the general public and not listed on the stock exchange. Founded in 1996 by former Microsoft employees, Mike Harrington and Gabe Newell, the company was originally a development studio, best known for the title Half-Life, a first-person shooter (FPS) game.
The turning point came in 2003 with the launch of Steam. A kind of App Store for PC games, this platform where you can buy and download games has become dominant in this field in just a few years, far ahead of its competitors Epic Games, Amazon Games, Microsoft Store and GOG.com, with 120,000 titles available. Every day, more than 40 million people log on to this online store to play online or buy games.
The Steam Machine will therefore provide access to a huge catalogue of games, much larger than the selection available on Xbox, PlayStation or Switch. Is this enough to make Sony tremble? In 2015, Valve launched the first Steam Machine. It was a failure. However, the company was not discouraged, launching the Steam Deck hybrid console in 2022 – a kind of Nintendo Switch capable of running PC games. The machine has since enjoyed critical acclaim. How will the new Steam Machine fare? Sold exclusively through the Steam platform, this console is likely to appeal primarily to enthusiasts.
