‘Funflation’ is back and hitting gaming and streaming services

For decades, video games have been a go-to hobby for Alyx Green. But in recent years, Green has felt priced out.

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

“The price has been going up,” Green said. “It’s just hard to keep up.”

U.S. consumers have for years grappled with “funflation,” used to describe the sharply higher prices for live experiences like concerts or sporting events that were halted during pandemic lockdowns.

Sticker shock first felt by consumers outside the home is now following them into their living rooms. After a wave of price hikes from some of the world’s largest companies, including Amazon, Apple and Netflix, even at-home pastimes like streaming movies or playing video games are pinching the pocketbooks of consumers like Green.

Exclusive data analyzed for CNBC by PNC Financial Services shows that, as pricing pressures mounted, the average consumer pulled back on home entertainment in June compared with a year ago. That 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, PNC’s senior economist.

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

Unwelcome news

Microsoft‘s Xbox and Apple each announced price hikes for devices in late June, which Apple acknowledged in a statement was “not welcome news.” A month earlier, Nintendo said that it was raising the price of its Switch 2 in the U.S. by 11%.

Companies blamed higher prices on more expensive components as a result of the artificial intelligence-driven memory chip crunch.

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

Xbox CEO Asha Sharma said in recent interviews that gaming is becoming unaffordable and that the company will focus on making less-costly consoles. Microsoft announced this week that it was laying off thousands of workers in its Xbox unit and spinning off several gaming studios.

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

Computers and related devices had gotten cheaper over time, adjusted for inflation and their capacity, as production became more efficient. But that trend has begun to reverse as component costs take off, meaning the disinflationary relief for shoppers looks to be coming to an end, said Elizabeth Renter, NerdWallet senior economist. 

Powering these devices — along with air-conditioning units that are running more thanks homebodies — has also gotten more expensive. Electricity prices have skyrocketed 45% since 2019, partially driven by supply shocks tied to the Russian invasion of Ukraine in 2022, and the war with Iran in 2026, according to government data.

‘Streamflation’

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

Netflix, Amazon and Spotify announced increases for their platforms earlier this year, following similar moves by Disney and Warner Bros. Discovery‘s HBO Max in late 2025. Apple raised prices for its TV+ service in mid-2025, its third increase in as many years.

Tubi, the free service from Fox Corp., has seen its viewership numbers exceed those of the leading streamers in some cases. Executives have 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 to keep her spending manageable. Sometimes, the project manager skips out altogether. Rather than purchasing a Peacock membership for the newest season of the hit dating show “Love Island,” for example, she watches clips from episodes on social media platforms to follow along with the latest developments.

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

The Akron, Ohio, resident has shifted some of her downtime to reading reading books, which haven’t seen the same price increases as other leisure categories.

The Bureau of Labor Statistics reported a 53% surge in the price of subscribing or renting videos and video games since the start of 2019, while TV services climbed 27% and music subscriptions by 14%. Recreational book prices, on the other hand, have fallen 4%.

Pressure on consumers

Annual inflation spiked in out-of-home “funflation” categories, like sporting events and amusement park visits, in 2026, according to the data analysis from PNC. The Pittsburgh-based bank said these service categories are once again putting upward pressure on the core personal consumption expenditures price index, Federal Reserve policymakers’ favorite measurement of inflation.

This year’s FIFA World Cup, co-hosted by the U.S., has fetched a median ticket price topping $900, TicketData said this week. When asked about fan anger over ticket costs, FIFA President Gianni Infantino told CNBC that attending a match in the U.S. was a “once-in-a-lifetime opportunity” with demand dwarfing that of past tournaments.

Economists warn that higher prices on recreational activities — whether in or out of the home — can further intensify the average Joe’s economic pessimism. Consumer sentiment has dropped 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 own life for a second was a major way for me to have some sort of happiness,” said Green, the student in Illinois. “Now, the overall economy is getting worse, and I don’t have any distractions from it.”

— CNBC’s Natalie Rice contributed to this report.