‘Funflation’ is back and hitting gaming and streaming services

For decades, video games have been Alex Green’s favorite hobby. But in recent years, Green’s price has declined.

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

“The price is going up,” Green said. “It’s very difficult to maintain.”

U.S. consumers have been struggling for years with “funflation,” a term used to describe increasingly high prices for live experiences like concerts or sporting events that were halted during pandemic lockdowns.

Consumers first felt the sticker shock outside the home, now reaching their living rooms. Following a wave of price hikes by some of the world’s biggest companies, including Amazon, Apple And NetflixEven entertainment like streaming movies or playing video games at home is taking a toll on the wallets of consumers like Green.

Exclusive data analyzed for CNBC PNC Financial Services This suggests that, as pricing pressures mounted, the average consumer pulled away from home entertainment in June compared to a year earlier. This was most prominent among Gen Z and Millennial consumers, who each cut their transactions by about 4%.

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

“We’re seeing it very clearly in things like travel, entertainment, concerts,” LeBlanc said. Now, “we’re starting to see it more in domestic leisure as well.”

unpleasant news

MicrosoftXbox and Apple both announced price increases for the devices in late June, which Apple acknowledged in a statement that was “not welcome news.” a month ago, nintendo said it is raising the price of its Switch 2 in the US by 11%.

Companies attributed the higher prices to more expensive components as a result of the artificial intelligence-powered memory chip shortage.

According to Deborah Wensvig, founder of Coresight Research, some of the increases may come at a cost to consumers.

Xbox CEO Asha Sharma said in recent interviews that gaming is becoming affordable and the company will focus on creating low-cost consoles. Microsoft announced this week that it is laying off thousands of employees at its Xbox unit and closing several gaming studios.

“We’ve reached a point where it would be hard to imagine that a mass audience could spend thousands of dollars on a console generation,” Sharma said on stage during a Fortune event early last month.

Computers and related equipment became cheaper over time, adjusted for inflation, and their capacity, as production became more efficient. But that trend is beginning to reverse as component costs rise, meaning the deflation relief for buyers appears to be coming to an end, said Elizabeth Renter, senior economist at NerdWallet.

Powering these appliances – along with products like air conditioning units that are likely run more by homebodies – has also become more expensive. Electricity prices have risen 45% since 2019, according to government data, partly driven by supply shocks linked to a Russian invasion of Ukraine in 2022 and war with Iran in 2026.

‘Streamflation’

Several major streaming services have also increased their subscription prices, a phenomenon dubbed “streamflation”.

Netflix, Amazon and spotify Following similar moves, it announced enhancements to its platforms earlier this year disney And warner bros discoveryHBO Max in late 2025. Apple raised prices for its TV+ service in mid-2025, its third increase in as many years.

Tubi, a free service from Fox Corporation, In some cases it has seen viewership surpass that of leading streamers. Executives are betting that consumers tired of rising monthly subscription costs will be willing to watch ads in exchange for free content.

Fiona Williams said she regularly subscribes to and then cancels services to keep her spending under control. Sometimes, the project manager disappears altogether. For example, instead of purchasing a Peacock subscription to the latest season of the hit dating show “Love Island,” she watches clips of the episodes on the social media platform to follow the latest happenings.

“It’s a balancing act. But I never maintain more than one at a time, because it’s too expensive,” said Williams, 40.

The Akron, Ohio resident has devoted some of his free time to reading books, the prices of which haven’t seen the same increase as other leisure categories.

The Bureau of Labor Statistics reported a 53% increase in the price of subscribing or renting videos and video games since the beginning of 2019, while TV services increased 27% and music subscriptions increased 14%. On the other hand, prices of recreational books declined by 4%.

pressure on consumers

Annual inflation in out-of-home “funflation” categories such as sporting events and amusement park visits is projected to increase in 2026, according to PNC data analysis. The Pittsburgh-based bank said these service categories were once again putting pressure on the core personal consumption expenditures price index, the preferred measure of inflation of Federal Reserve policymakers.

The average ticket price for this year’s FIFA World Cup, co-hosted by the United States, topped $900, TicketData said this week. Asked about fans’ anger over ticket prices, FIFA president Gianni Infantino told CNBC that attending a match in the US was a “once-in-a-lifetime opportunity”, where demand was lower than previous tournaments.

Economists warn that higher prices on recreational activities – whether indoors or outdoors – could further increase the average Joe’s economic pessimism. Consumer sentiment has fallen to record lows in recent months, according to a closely followed index from the University of Michigan.

“The ability to play games and get out of my life for a second was a major way for me to find some type of happiness,” said Green, the Illinois student. “Now, the overall economy is getting worse, and I don’t want any distractions from that.”

— CNBC’s Natalie Rice contributed to this report.