US Consumers Cut Home Entertainment Spending 4% in June; Microsoft Lays Off Xbox Staff

Exclusive data analyzed by PNC Financial Services shows the average consumer reduced home entertainment spending in June 2026 compared with June 2025. The pullback was sharpest among Gen Z and millennial consumers, who each lowered transactions by about 4 percent.

PNC senior economist Brian LeBlanc said price pressures visible in travel, entertainment and concerts are now appearing in home leisure.

"Funflation is back in 2026," LeBlanc stated. Several major companies raised prices for devices and subscriptions in recent months. Microsoft’s Xbox and Apple announced device price increases in late June 2026.

Nintendo raised the price of its Switch 2 console in the U.S. in May. Netflix, Amazon and Spotify increased subscription prices earlier in 2026, following similar moves by Disney and Warner Bros. Discovery’s HBO Max in late 2025 and Apple’s third TV+ increase in three years by mid-2025.

Companies attributed device price rises to higher component costs from an AI-driven memory chip crunch. Xbox CEO Asha Sharma said gaming is becoming unaffordable and the company will focus on less-costly consoles. "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 stated at a Fortune event in June.

Microsoft announced in July 2026 that it was laying off thousands of workers in its Xbox unit and spinning off several gaming studios. Electricity prices have risen 45 percent since 2019, driven by supply shocks from the Russian invasion of Ukraine in 2022 and the war with Iran in 2026, according to government data.