‘Funflation’ is back and hitting gaming and streaming services

For decades, video games have been an essential hobby for Alyx Green. But in recent years Green has felt priced out.

Instead of buying the biggest games, the Illinois graduate student opted for cheaper alternatives from smaller studios or turned to board and card games. In some cases, instead of playing games, the 31-year-old watches videos of others playing hot games on YouTube.

“Prices are going up,” Green said. “It’s so hard to keep going.”

For years, U.S. consumers have been grappling with “entertainment inflation,” a term used to describe much higher prices for live experiences like concerts or sporting events that were halted during pandemic quarantines.

Sticker shock, which consumers first felt outside the home, is now following into their living rooms. Following a wave of price increases from some of the world’s largest companies Amazon, Apple And netflixEven at-home entertainment like watching movies or playing video games stretches the budgets of consumers like Green.

Exclusive data analyzed for CNBC PNC Financial Services It shows the average consumer retreated from home entertainment in June compared to a year ago as pricing pressures increased. This was most evident among Gen Z and Millennial consumers, who each reduced their transactions by about 4%.

“Entertainment is back in 2026,” said Brian LeBlanc, senior economist at PNC.

“We see this very clearly with things like travel, entertainment, concerts,” LeBlanc said. Now, “we’re starting to see this more and more while we’re relaxing at home, too.”

unwelcome news

MicrosoftXbox and Apple announced price increases for the devices in late June; Apple acknowledged in a statement that this was “unwelcome news.” A month ago Nintendo’s It said it increased the price of the Switch 2 by 11% in the US.

Companies have blamed the high prices of pricier components as a result of the AI-driven memory chip crisis.

Some of the increases could price out consumers, said Deborah Weinswig, founder of Coresight Research.

Xbox CEO Asha Sharma said in recent interviews that gaming has become unaffordable and the company will focus on producing less costly consoles. Microsoft announced this week that it would lay off thousands of workers at its Xbox unit and close several game studios.

“We’ve reached a point where it’s hard to imagine that mass audiences can afford to spend thousands of dollars on a console generation,” Sharma said on stage. luck event early last month.

As production became more efficient, computers and related devices became cheaper over time, adjusting for inflation and their capacity. But NerdWallet senior economist Elizabeth Renter said that trend is starting to reverse as ingredient costs rise, meaning the inflation-busting relief for shoppers is over.

Powering these devices has also become more expensive, as have the air conditioning units in the home that work harder. Electricity prices have risen 45% since 2019, according to government data, driven in part by supply shocks tied to Russia’s invasion of Ukraine in 2022 and the war with Iran in 2026.

‘Flow inflation’

Many major streaming services have also increased subscription prices; this situation was called “flow inflation”.

Netflix, Amazon and Spotify They announced increases for their platforms earlier this year, following similar moves Disney And Warner Bros. DiscoveryHBO Max in late 2025. Apple raises prices for its TV+ service in mid-2025; This was the third increase in as many years.

Tubi, free service Fox Corp., in some cases it has seen viewing figures exceed those of leading broadcasters. Executives bet that consumers tired of rising monthly subscriptions would be willing to watch ads in exchange for free content.

Fiona Williams said she regularly subscribes to services and then cancels them to keep her expenses manageable. Sometimes the project manager skips it altogether. For example, instead of purchasing a Peacock subscription for the newest season of the popular dating show “Love Island,” she watches clips from episodes on social media platforms to stay up to date.

“It’s a matter of balance,” Williams, 40, said. “But I never look at more than one because it’s too expensive.”

The Akron, Ohio resident has shifted some of his free time to reading; this book has not seen the same price increases as other entertainment categories.

The Bureau of Labor Statistics reported that there has been a 53% increase in the price of subscribing or renting videos and video games since the beginning of 2019, while TV services have increased by 27% and music subscriptions have increased by 14%. Prices of entertainment books fell by 4 percent.

Pressure on consumers

Annual inflation increased in out-of-home “entertainment” categories such as sporting events and amusement park visits in 2026, according to PNC’s data analysis. The Pittsburgh-based bank said those service categories are once again putting upward pressure on the core personal consumption expenditures price index, Federal Reserve policymakers’ favorite measure of inflation.

The average ticket price for this year’s FIFA World Cup, co-hosted by the United States, exceeded $900. TicketData he said this week. When asked about fans’ anger over ticket prices, FIFA President Gianni Infantino told CNBC that attending a match in the United States is a “once-in-a-lifetime opportunity” and that demand has eclipsed that of past tournaments.

Economists warn that higher prices on recreational activities inside or outside the home could further fuel the average Joe’s economic pessimism. Consumer confidence has fallen to record lows in recent months, according to an index closely tracked by the University of Michigan.

“Being able to play and get out of my own life even for a moment was an important way for me to have some kind of happiness,” said Green, the Illinois student. “Now the overall economy is getting worse and I have nothing to distract me from that.”

— CNBC’s Natalie Rice contributed to this report.