'Funflation' is back and hitting gaming and streaming services

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"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 likeconcertsorsporting eventsthat were halted duringpandemic lockdowns.

Exclusive data analyzed for CNBC byPNC Financial Servicesshows 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."

Microsoft's Xbox and Apple each announcedpricehikesfor devices in late June, which Apple acknowledged in a statement was "not welcome news." A month earlier,Nintendosaid that it wasraising the priceof its Switch 2 in the U.S. by 11%.

Companies blamed higher prices on more expensive components as a result of theartificial intelligence-drivenmemory chip crunch.

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

Xbox CEO Asha Sharma said in recent interviews that gaming is becoming unaffordable and that the company will focus on making less-costly hardware. Microsoft announced this week that it was laying offthousands of workersin 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 aFortune eventearly 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 products such as air-conditioning units that are likely run more by homebodies — has also gotten more expensive.Electricityprices have skyrocketed 45% since 2019, partially driven by supply shocks tied to theRussian invasion of Ukrainein 2022, and thewar with Iranin 2026, according to government data.

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

Netflix, Amazon andSpotifyannounced increasesfortheirplatformsearlier this year, following similar moves byDisneyandWarner Bros. Discovery's HBO Max inlate2025. Apple raised prices for itsTV+ servicein mid-2025, its third increase in as many years.

Tubi, the free service fromFox Corp.,has seen its viewership numbers exceed those of the leading streamersin some cases. Executives have bet that consumers tired of rising monthly subscription costs 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 toreading books, which haven't seen the same price increases as other leisure categories.

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 Reservepolicymakers' favorite measurement of inflation.

This year'sFIFA World Cup, co-hosted by the U.S., has fetched a median ticket price topping $900,TicketDatasaid this week. When asked about fan anger over ticket costs, FIFA PresidentGianni Infantinotold 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 sentimenthas 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.
 
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