The Igloo — Switch 2 is flying, PS5 and Xbox just had their worst May in years

Friday, June 26, 2026. The May sales charts just landed, and they tell a strange, split-screen story: one console is breaking records on its way up while the other two are posting numbers they haven't seen in years. Underneath all of it is a quiet shortage that started in data centers and is now showing up at the checkout. Welcome to The Igloo.

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The lead · Switch 2 is flying, PS5 and Xbox just had their worst May in years

The May numbers from Circana are in, and they don't agree with each other. On one side: Switch 2 is now the second fastest-selling console in US history, moving 5.9 million units in its first 12 months — behind only Nintendo's own Game Boy Advance, which sold 6.5m in the same window 25 years ago. On the other side, the same month, PS5 and Xbox Series X|S both sold poorly: PlayStation posted its worst May in decades and Xbox hit its worst US sales month on record, with PS5 unit sales dropping 58%.

Here's the detail that makes it click: even as units fell, total hardware spending was up 38% year over year, because the average price of new gaming hardware is up about 14%. People are paying more for fewer boxes.

Why it matters to players

If you're shopping for a console this year, the market just got harder to read. The cheap, six-year-old machines aren't getting their usual late-cycle discount — they're getting pricier, and fewer people are buying them at the new numbers. The one console that's flying is the newest and, not coincidentally, the one that isn't trying to be a 4K powerhouse. For a player on a budget, "wait for the price drop" stopped being reliable advice this year.

The AI / industry angle

The thread tying the whole chart together is memory. RAM and flash storage prices are spiking so hard that Rock Paper Shotgun published an actual survival guide for the memory shortage crisis this week, and Microsoft just blamed exactly those costs for the Xbox price hike. The reason those parts are scarce is the part worth sitting with: the same DDR5 and high-capacity flash that the AI data-center buildout is buying in enormous volume are what consoles and gaming PCs are made of. A high-spec console is, underneath the plastic, a box of memory — so when AI infrastructure bids up the price of memory, the powerful boxes feel it first.

Our read on Nintendo's win: the Switch 2 is a lower-spec, lower-memory machine, so it's simply less exposed to that squeeze than a Series X or a PS5. That's not the whole story — Nintendo also has a Mario-shaped library nobody else can copy — but on a day when the headline is "memory is expensive," the console that needs the least of it is the one running away with the chart. The cost of the AI boom keeps quietly re-pricing the shelf, and right now it's reshaping who's winning the console generation.

02 · GTA 6 starts showing its shape — a bigger map, "NPC routines," and a fake TikTok

The most-anticipated game of the decade is leaking around the edges. An Amazon Brazil product listing apparently named unannounced features including a "larger map" and "NPC routines". Separately, GTA 6 reportedly includes an in-game social network aimed squarely at TikTok and Instagram — follow influencers, watch videos, unlock "secret" side missions. And the wallet story keeps building: an IGN poll found 70% plan to buy the $100 Ultimate Edition over the $80 standard, and a retailer warns demand will likely outstrip console supply this holiday.

The AI / gamedev angle. "NPC routines" is the phrase to watch. If it means what it sounds like — simulated daily lives, NPCs with schedules and behaviors that persist whether or not you're looking — that's the systemic-simulation craft that studios increasingly lean on procedural and AI-assisted tooling to author at scale. It's also the kind of thing Rockstar has chased for years and rarely shipped fully. Fair warning, though: this is a leaked Amazon listing, not a Rockstar announcement, so read every word of it as "apparently" until the studio confirms. The interesting part isn't the leak, it's that a living-world feature set is what the most expensive game ever made is choosing to brag about.

03 · SEGA's Sonic ARG quietly asked to train gen-AI on your data

A sharp little AI story slipped under the day's bigger headlines. SEGA is facing backlash after a Sonic the Hedgehog alternate-reality game — a marketing campaign played out online — turned out to be training AI models on participants' data, with the consent tucked into the fine print.

Our take. This is the consent fight arriving in games, and it's the inverse of the disclosure conversation the industry started this week. Players have been clear that they want to know when AI is involved; quietly harvesting fan engagement to train a model is the opposite of telling them. There's a clean line here and SEGA wandered over it: ask plainly and let people opt in, or don't do it. Burying gen-AI training rights inside a Sonic puzzle hunt is exactly the move that makes players distrust every AI mention that follows.

04 · The Bungie layoff number gets a face: nearly 300

We flagged Bungie's cuts yesterday; today the scale is confirmed, and it's worse than it first read. Official records show the layoffs hit nearly 300 staff at Bungie's Bellevue headquarters, with reporting putting it at at least 292 employees laid off by Sony across the Destiny team and supporting groups. And it isn't isolated: Keywords cut 128 people in San Francisco, and Xbox layoffs appear to be starting at South of Midnight studio Compulsion Games.

Our take. Put it next to the lead: the same shortage pushing console prices up is landing hardest on the people who make the games. A studio that shipped one of the most beloved shooters of the decade getting gutted right after its final update is a market story, not a talent one. On a week of price tags, this is the line item that's human.

One more thing

A palate cleanser from the strangest crossover of the day: Old School RuneScape — the deliberately-2007 version of the MMO — just made its music-video debut in Phoebe Bridgers' new single "Lost Boys", reportedly the first time the low-poly classic has shown up in a release this big. Twenty-year-old Gielinor, rendered in a Phoebe Bridgers video. Games aren't just culture now, they're set dressing for it — and the receipts keep getting weirder.

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That's today's Igloo — the day's games, and what AI is doing to the people who make and play them. Prefer to listen? The full episode is up now: listen to today's episode.

Sources: Eurogamer — Switch 2 is the second fastest-selling US console ever · GameSpot — PS5 and Xbox both sold poorly in May · VGC — Xbox's worst US month on record, PS5 down 58% · Rock Paper Shotgun — surviving the memory shortage crisis · Eurogamer — Microsoft blames RAM and storage costs for the Xbox hike · VGC — Amazon listing names "larger map" and "NPC routines" · Eurogamer — GTA 6's in-game social network takes aim at TikTok · IGN — 70% plan to buy the $100 Ultimate Edition · Eurogamer — GTA 6 demand may outstrip console supply this holiday · Eurogamer — SEGA's Sonic ARG trains gen-AI on player data · IGN — true scale of Bungie layoffs, nearly 300 in Bellevue · Game Developer — at least 292 Bungie employees laid off by Sony · Game Developer — Keywords lays off 128 in San Francisco · GameSpot — Xbox layoffs appear to start at Compulsion Games · Eurogamer — Old School RuneScape in Phoebe Bridgers' "Lost Boys"