Steam Reports Record $11.1 Billion in First Half of 2026 as Console Giants Struggle — The Great Gaming Divergence

By Vito Ruocco — August 10, 2026

If you’ve been paying attention to the gaming industry this summer, you’ve probably noticed a strange duality playing out. On one side, Valve’s Steam platform is absolutely smashing records, pulling in more money than ever before. On the other, Xbox and PlayStation — the two dominant forces in console gaming for over two decades — are going through what can only be described as an existential crisis. Layoffs, declining hardware sales, the bitter end of physical media, and a growing sense that the old guard has lost its way.

Welcome to the Great Gaming Divergence of 2026.

This week, new data from analytics firm Alinea Analytics revealed that Steam generated an eye-watering $11.1 billion in revenue during the first half of 2026 — its best half-year performance ever, blowing past even the pandemic-era gaming boom. Meanwhile, Microsoft’s gaming revenue is down 7% year-over-year, Sony is preparing to end physical game discs by 2028, and both console makers have been hit by a wave of layoffs that has left thousands of developers jobless.

Let’s break down everything that’s happening in the industry right now, from the biggest blockbusters to the deepest controversies.

The Steam Machine: $11.1 Billion and Climbing

Let’s start with the good news, because there’s plenty of it. According to Alinea Analytics, Steam’s first-half revenue of $11.1 billion represents a massive leap over the same period in 2025, which was already a strong year. To put that in perspective, Steam is now generating nearly five times the revenue it did in the first half of 2017. Five times. In under a decade.

“Zoom out over the last decade and things get really crazy,” said Rhys Elliott, head of market analysis at Alinea Analytics. “There’s obviously a visible dip as the market normalised after the pandemic sugar-high, but the long arc is relentlessly up, with seven half-years of growth.”

What’s driving this growth? Elliott points to several factors:

The Chinese market: As of early 2025, roughly 50% of all Steam accounts belonged to Chinese-speaking users. That number has only grown since. China’s gaming audience is massive, free-to-play-friendly, and deeply engaged with Steam as a platform.
Higher prices on new releases: AAA games now routinely launch at $70 or more, with deluxe editions pushing past $100. Each sale brings in more revenue than ever before.
Third-party publishers returning to Steam: After years of trying (and mostly failing) to build their own launchers, publishers like Ubisoft, EA, and Activision have been bringing their games back to Valve’s storefront. When you can’t beat ‘em, join ‘em.

The result is a platform that has become the undisputed king of PC gaming, with no serious competitor in sight. The Epic Games Store, for all its free games and exclusive deals, has never come close to challenging Steam’s dominance.

The Blockbusters of 2026: Forza, Resident Evil, and a New IP That Stole the Show

So what are people actually buying on Steam? The numbers are staggering.

Forza Horizon 6 leads the pack, having generated $197.7 million in under two months since its launch. The open-world racing series, now under the Xbox Game Studios banner, continues to be a critical and commercial juggernaut on PC, proving that even as Microsoft’s console strategy wobbles, their games can still find massive audiences elsewhere.

Right behind it is Resident Evil Requiem, Capcom’s latest survival horror epic, which has pulled in $194.5 million since its February launch. That’s 3.4 million copies sold on Steam alone — and notably, $1.3 million of that came from a single cosmetics pack. When your DLC is making more money than most indie games make in total, you know you’ve built something special.

And then there’s Crimson Desert, Pearl Abyss’s ambitious open-world action RPG that launched in March. The game has earned $190 million, an extraordinary figure for a brand-new IP from a developer best known for the MMO Black Desert Online. Originally conceived as a prequel to that game, Crimson Desert evolved into something far larger and more ambitious — a sprawling single-player adventure that has drawn comparisons to The Witcher 3 and Elden Ring. With a massive update (version 1.13.00) just released this week adding dozens of new equipment pieces, quests, and achievements, the game shows no signs of slowing down.

The Indie Gold Rush: Slay the Spire 2, Subnautica 2, and the Rise of the Unexpected Hit

Perhaps the most heartening part of Steam’s 2026 story is the success of independent games. Three indie titles cracked the top earners list alongside the AAA heavyweights, and their numbers are genuinely impressive:

Slay the Spire 2: $141.7 million — Mega Crit’s deck-building roguelike sequel has become a phenomenon, proving that the original wasn’t a one-hit wonder.
Subnautica 2: $133.6 million — Unknown Worlds Entertainment’s underwater survival sequel has captivated players with its terrifying deep-sea exploration and base-building mechanics.
Meccha Chameleon: $71.3 million — A surprise breakout hit that has taken the gaming world by storm, this colorful action-platformer has carved out a loyal following through word-of-mouth and streaming.

These numbers are a testament to the health of the PC gaming ecosystem. On Steam, a great game can find its audience regardless of publisher size. The platform’s recommendation algorithms, user reviews, and community features create a meritocracy that simply doesn’t exist on console storefronts. When you combine that with the fact that indie games typically have much lower development costs, the profit margins on these successes are eye-watering.

Xbox’s Bleeding Wound: “They Don’t Understand Art”

While Steam celebrates, Microsoft’s gaming division is dealing with the fallout from its most brutal round of layoffs yet. In July, new Xbox boss Asha Sharma announced that the company would cut 1,600 jobs that month, with another 1,600 to follow before the end of the year. When all is said and done, roughly 20% of Xbox’s total workforce will have been eliminated.

This week, a voice from inside the storm broke the silence. Chris Hays, id Software’s lead services programmer and a 15-year veteran of the studio behind Doom, sat down for an interview with the Well Played podcast that has since gone viral — and he did not hold back.

“It is hard to make a game that is AAA that’s like we’ve done before with half the people,” Hays said. “And by hard I mean impossible.”

Hays revealed that entire departments at id Software have been “gutted” — entire disciplines simply gone. When asked about Xbox’s public claim that the studio is roughly the same size as it was during Doom (2016)’s development, Hays was blunt: “There is a reason they say ‘close to,’ because it is less.”

Perhaps most damningly, Hays criticized Xbox’s obsession with Game Pass metrics over actual game sales. “Whenever we see the financial reports that say there were poor sales under Bethesda, like, what’s a sale? If you have Game Pass, are you saying poor sales means a poor number of games sold? Because of course. They’re not doing a ‘games sold’ business model.”

His final verdict on Xbox leadership? “They fundamentally don’t understand art or video games.”

The interview has struck a nerve across the industry, with developers and players alike pointing to it as evidence that Microsoft’s post-acquisition strategy has been a disaster for studio culture. id Software, the legendary studio that practically invented the first-person shooter, is now operating at half capacity, with management fed “talking points” by corporate leadership.

PlayStation’s All-Digital Gamble: The End of Physical Media

It’s not just Xbox facing headwinds. Sony Interactive Entertainment has been making headlines for all the wrong reasons in 2026.

The biggest story: Sony will cease production of game discs entirely by January 2028. The announcement has sparked a massive backlash from preservationists, collectors, and anyone who believes in owning the games they buy. A petition against the move has garnered hundreds of thousands of signatures, but Sony has shown no signs of reconsidering.

Meanwhile, Sony’s first-party software sales have been in steady decline since 2020. The company’s strategy of releasing fewer, bigger-budget exclusives has produced some excellent games, but not enough volume to sustain the kind of growth investors expect. And in a move that has PC gamers scratching their heads, Sony recently announced that future PlayStation exclusives will NOT come to PC — a reversal of the strategy that brought games like God of War, Horizon, and Spider-Man to Steam to great success.

Both console makers are also feeling the bite of increased hardware costs driven by the AI-fueled RAM crisis. Components that were already expensive have become even pricier as the AI boom sucks up available memory chips. This has forced both companies to consider — or in some cases, implement — significant price increases on their hardware.

GTA 6: The Netflix Extended Look Everyone’s Waiting For

Amid all the industry turbulence, one game looms over everything else: Grand Theft Auto 6.

Later this month, on August 27, Rockstar Games will premiere an extended look at GTA 6 exclusively on Netflix (before it hits YouTube and other platforms a few hours later). This is expected to be a narrated gameplay trailer, and it could answer some of the biggest questions fans still have about the most anticipated game in history.

Here’s what we still don’t know — and what the August 27 reveal could finally show us:

Will GTA 6 support 60FPS on any platform? Trailers have all been at 30FPS, but the PS5 Pro might offer a performance mode. With the game looking as incredible as it does, performance is a major open question.
Is there a first-person mode? GTA V and Red Dead Redemption 2 both had it. The footage so far has only shown third-person, but many fans hope the option returns.
How does the Jason/Lucia dual-protagonist system work? Can you swap freely like in GTA V? Is it story-gated? Distance-limited? We don’t know yet.
How big is the map? Fan recreations suggest it’s massive, but we haven’t seen the scale in action.
Will there be RPG-style character stats? GTA San Andreas, GTA V, and GTA Online all had them. Will GTA 6 bring them back?
What about the radio stations? Jason has been spotted in a V-Rock shirt, and leaked gameplay showed placeholder radio stations from GTA V. But the full licensed soundtrack remains a mystery.

GTA 6 is expected to be the biggest entertainment launch of the decade, regardless of which platform it’s on. And with the Netflix partnership, Rockstar is doing something unprecedented — using a streaming service as a premiere venue for a major gameplay reveal. It’s a sign of how the lines between gaming, streaming, and traditional entertainment continue to blur.

Humble Choice August 2026: A Packed Month of PC Gaming Value

On the more affordable side of PC gaming, Humble Choice’s August 2026 bundle has just gone live, and it’s one of the strongest lineups in months. For $11.99/month, subscribers get:

Like a Dragon: Infinite Wealth — Ryu Ga Gotoku Studio’s epic RPG adventure, set in Hawaii, following Ichiban Kasuga and Kazuma Kiryu. A 4/5 from Eurogamer.
Teenage Mutant Ninja Turtles: Shredder’s Revenge Ultimate Edition — The critically acclaimed beat-em-up, now with all DLC included.
Dead Cells + Bad Seed DLC — One of the best roguelite Metroidvanias of all time, with extra content.
Decktamer — A roguelite deckbuilder with a unique twist.
Conquest Dark, Gatekeeper, Pile Up!, and Dark Envoy round out the bundle.

With Like a Dragon: Infinite Wealth alone frequently selling for $40-60, the value proposition here is extraordinary. It’s a reminder that even in an era of $70 AAA games and $100 deluxe editions, there are still ways to build a massive game library without breaking the bank.

What It All Means: The Great Divergence

So where does this leave the gaming industry in August 2026?

The clearest trend is the divergence between PC and console gaming. Steam is thriving because it offers an open, accessible platform where games of all sizes can find their audience. The PC market has no walled garden, no curated storefront with 30% fees that developers have to accept. It’s messy, it’s chaotic, but it works.

Consoles, by contrast, are feeling the weight of their own business models. The push to all-digital is eliminating consumer choice. The rising cost of hardware is pricing out casual players. And the relentless focus on “growth” and “shareholder value” is leading to layoffs that gut the very studios that make the games people love.

The irony is that Xbox and PlayStation both have incredible games. Forza Horizon 6, Resident Evil Requiem, Crimson Desert — these are world-class experiences. But the infrastructure around them is creaking. Game Pass, for all its convenience, has devalued games in the eyes of Microsoft’s own leadership. Sony’s disc-free future may save money on manufacturing, but it erodes the trust of players who want to own what they buy.

Meanwhile, Valve quietly sits on top of the mountain, collecting its 30% cut and letting the ecosystem do the work. No layoffs. No existential crises. Just a platform that keeps getting bigger because it keeps getting better.

As we look ahead to the second half of 2026, all eyes will be on GTA 6’s launch, on whether Xbox can stabilize its ship, and on whether Sony’s all-digital bet pays off. But one thing is already clear: the future of gaming is being written on PC, and Steam is holding the pen.

This article was published on August 10, 2026. Sources: Eurogamer, Kotaku, Alinea Analytics, Well Played podcast.