‘Funflation’ is back and hitting gaming and streaming services

For decades, video games have been Alyx Green’s hobby. But in recent years, Green has felt priced out.

Instead of buying the biggest releases, the Illinois graduate opted for cheaper alternatives at 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 instead of actually playing.

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

American consumers have for years grappled with “funflation,” a term used to describe skyrocketing prices for live experiences like concerts or sporting events that were put on hold during the pandemic shutdown.

The sticker shock that was first felt by consumers outside the home is now following them into their living rooms. After a wave of price hikes in some of the world’s biggest companies, including Amazon, an apple again Netflixeven home entertainment like streaming movies or playing video games pinches the pocketbooks of consumers like Green.

Exclusive data analyzed by CNBC is PNC Financial Services shows that, as price pressures mount, the average consumer pulled back from home entertainment in June compared to last year. That was especially prominent among Gen Z and Millennial shoppers, who cut their transactions by nearly 4%.

“Flation is back in 2026,” said Brian LeBlanc, PNC’s chief economist.

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

Unwelcome news

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

Companies blame higher prices on more expensive devices due to the memory chip crunch driven by artificial intelligence.

Deborah Weinswig, founder of Coresight Research, said further increases could cost consumers.

Xbox CEO Asha Sharma has said in recent interviews that gaming is unaffordable and that the company will focus on making more affordable consoles. Microsoft announced this week that it is laying off thousands of workers at its Xbox unit and is investigating several game studios.

“We’ve gotten to the point where it’s going to be hard to imagine that a large audience can afford to pay thousands of dollars to spend on a console generation,” Sharma said on stage during the Fortune event earlier last month.

Computers and related devices have gotten cheaper over time, adjusted for inflation and power, as manufacturing becomes more efficient. But that trend has begun to reverse as component costs pick up, meaning the inflation relief for consumers looks set to end, said Elizabeth Renter, senior economist at NerdWallet.

Powering these devices – and the air conditioning units that grateful households use – has also become more expensive. Energy prices have risen 45 percent since 2019, driven in part by shocks related to Russia’s invasion of Ukraine in 2022, and war with Iran in 2026, according to government data.

‘Streamflation’

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

Netflix, Amazon and Spotify announced the expansion of their platforms earlier this year, following similar steps Disney again The acquisition of Warner Bros‘s HBO Max in late 2025. Apple has raised the prices of its TV+ service in mid-2025, its third increase in as many years.

Tubi, a free service from Fox Corp., saw its viewership numbers surpass those of leading broadcasters in some cases. Executives are betting that consumers tired of rising monthly subscriptions would be willing to watch ads for free content.

Fiona Williams said she regularly signs up for services and cancels to keep her money under control. Sometimes, the project manager skips it completely. Rather than buying a Peacock membership for the new season of the hit dating show “Love Island,” for example, she watches clips of episodes on social media to keep up with the latest developments.

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

A resident of Akron, Ohio, has turned his leisure time into reading books, which has not seen the same rate hikes as other categories of leisure.

The Bureau of Labor Statistics reported a 53% increase in the number of video and video game subscriptions or rentals since the start of 2019, with TV services up 27% and music subscriptions up 14%. On the other hand, the prices of leisure books decreased by 4%.

Pressure on consumers

Annual inflation has increased in categories of “funflation” abroad, such as sporting events and amusement park visits, through 2026, according to a data analysis from PNC. The Pittsburgh-based bank said these service categories are also putting upward pressure on the personal consumption expenditures price index, Federal Reserve policymakers’ favorite measure of inflation.

This year’s FIFA World Cup, co-hosted by the US, has seen ticket prices top $900, TicketData said this week. When asked about fan anger over the cost of tickets, FIFA President Gianni Infantino told CNBC that attending a game in the US is a “once-in-a-lifetime opportunity” and demand is dwarfing that of previous tournaments.

Economists warn that higher prices for leisure activities — whether inside or outside the home — could further reinforce the average Joe’s economic pessimism. Consumer sentiment has fallen to record lows in recent months, according to a closely watched index from the University of Michigan.

“The ability to play games and get out of my life for a second was a huge way for me to have some kind of happiness,” said Green, a student from Illinois. “Now, the economy as a whole is getting worse, and I have no distractions from it.”

– CNBC’s Natalie Rice contributed to this report.