Yep, I remember paying about 35 bucks of my hard-earned, lawnmowing money to Eckerd's [!] to buy....Pac-Man for the Atari 2600.
Apart from birthdays and Christmases, my folks pretty much provided the essentials [within reason, they'd buy me a pair of sneakers for a new school year, but not 40-100$ 'popular' pair.]
So I bought most of my 'entertainment' [and some other expenses--gas, a portion of my car insurance, etc.] out of my own money. It really means more when you buy something oyu want with your own money.
And that's true, it was very hard to find used games, and rental stores were almost nonexistent, so the best way to do it would be for you to buy Game A and a bud to buy Game B and lend them to each other.
Re: a car--I had to have access to a car to get to my work [I could ride my bike, and did sometimes, but it was a couple miles, so if the weather was bad or depending on my schedule, that wasn't an option. Plus I'd be riding back at close to midnight, which my mom didn't like.] My mom taught school, and I worked after school, so that worked out--I'd either borrow her car, or she'd drop me off/pick me up.
And yes, a car has inherent expenses, but a lot of people do live in the suburbs, where access to a car is almost essential. I'd rather deal with a car than live in NYC, no offense intended to anyone there--and big cities generally have higher living expenses anyway, so it balances out. We visited Manhattan a few years back, and house-sat a friends apartment. It had an excellent location, but she was paying 1200 dollars for an 'efficiency' that was maybe as big as my living room. And that was 300$ more than my house payment at the time. So it evens out
If I lived there, I would definitely take advantage of the subways and buses and sidewalks and all, but I can't handle the crowds/population density.
Whether games are 'waste'--well, it's a hobby. Apart from the low percentage of people who get to work somewhere in the industry, I'd say it falls under entertainment expenses. How much to spend on entertainment depends on each family.