Americans keep getting priced out of fun. Here's how it impacts us at home
"Fundflation" — the surge in entertainment and experience pricing since the pandemic — is pricing out consumers, particularly Gen Z, from both live events and at-home activities like streaming and gaming. As subscription services and gaming hardware costs double, younger consumers are cutting back on leisure spending and exploring free alternatives like physical media.
Summary
Since the pandemic, the entertainment and leisure industry has experienced significant price inflation, termed "fundflation" by economists. A PNC chart created for CNBC shows that amusement parks and concerts saw much higher price growth than broader inflation measures in 2023, and this surge is recurring in 2024. Streaming services have become increasingly expensive: Netflix's ad-free standard account costs $20 per month in July 2026, up from $14 five years prior. When consumers subscribe to multiple services like Netflix, Disney Plus, and Hulu, annual costs exceed $1,300. Gen Z is being hit hardest by fundflation despite spending more on experiences, as younger workers have faced job market challenges, depleted savings, and five years of inflation fatigue. Gaming costs are also soaring—Microsoft doubled Xbox Game Pass prices in 2025 and increased console costs in 2026, with expectations for hardware prices to double by 2027. Nintendo announced an 11% price increase for the Switch system by September. Both companies attributed these increases to tariffs and global memory shortages. Some consumers are responding by abandoning entertainment spending entirely or reverting to free hobbies and physical media like books, CDs, and DVDs. However, a significant portion of fans remain willing to sacrifice other spending or incur credit card debt to attend live sports events, suggesting consumer resilience despite repeated economic shocks.
Key Insights
- Fundflation items like amusement parks and concerts normalized somewhat over time but are now surging above average prices again, showing a second wave of leisure cost inflation.
- Younger workers like Gen Z have had more difficulty getting jobs, run down their savings, and experienced five years of inflation fatigue, making them most vulnerable to funflation impacts.
- Microsoft expects hardware prices to double by 2027 and has attributed price markups to tariffs and global memory shortages, while simultaneously announcing thousands of job cuts.
- Nearly a quarter of sports fans say they would cut back on other spending to attend live events, and about a fifth say they'd go into credit card debt for the same purpose.
- Physical media like books, CDs, and DVDs are experiencing a resurgence as consumers seek alternatives to expensive streaming and digital entertainment services.
Topics
Transcript
[0:00] Since the pandemic, we've talked a lot about how the experiences that were put on hold, like concerts or sporting events, saw prices surge as consumers race to make up for lost time. Economists even had a name for it, fundflation. Take a look at this chart PNC made exclusively for CNBC. [music] You see back in 2023 that funlflation items like amusement parks or concerts [music] had much higher price growth than a broader basket. that normalized a bit over time, but now that funflation [0:30] category [music] is surging above average once again. >> The way that it has slowly happened over time, especially if you're like I'm a millennial. If you're like Gen Z, you don't…
Full transcript available for MurmurCast members
Sign Up to AccessMore from CNBC
Will The New Housing Bill Lower Housing Costs?
The newly enacted 21st Century Road to Housing Act addresses America's housing affordability crisis through three main reforms: increasing housing supply via construction incentives and zoning reforms, improving access to housing finance, and limiting large institutional investors from purchasing single-family homes. However, experts caution that meaningful impacts on housing costs may take years to materialize due to implementation challenges and the supply-side nature of the measures.
AI’s Next Race: Cost, Control, and Compute
The AI industry is entering a "postfrontier era" where success depends on orchestration, cost control, and open-weight models rather than frontier model capabilities alone. Perplexity CEO Arvin Hashemi and Benchmark's Peter Fenton predict that 90%+ of AI tokens could come from open-weight models within 18 months, driven by enterprise adoption, cost pressures, and performance benefits of specialized models tailored to specific tasks.
Why Ford is betting $5 billion on EVs
Ford is investing $5 billion in a new electric vehicle development center in Long Beach, California, with 350 engineers developing a universal EV platform. The first vehicle will be a mid-size electric pickup truck launching next year, positioned to compete against Tesla and Chinese EV manufacturers with unique features like RAV4-level interior space, a useful bed, and long-range capability.
How AI Super PACs Are Shaping The Midterms
AI-backed super PACs spent tens of millions during the midterms, with rival groups backed by OpenAI and Anthropic clashing over AI regulation policy. The competing PACs influenced congressional races, particularly one in New York where they opposed and supported different candidates based on their stance on AI regulation.
How Warsh's Task Forces Will Reshape The Federal Reserve
Fed Chair Kevin Warsh is establishing five task forces to reshape the Federal Reserve's approach to monetary policy, focusing on artificial intelligence's deflationary potential, modernizing inflation measurement beyond PCE, improving economic data collection, restructuring Fed communications, and reducing the central bank's balance sheet.