TBH, I wouldn't really give him shit for "playing the system" if that's how you want to describe it.
Every single person who's self-employed uses every possible business write off they can to save money. He's not doing anything worse than anyone else does.
I think in his case, if you have something that qualifies as both entertainment and a business expense (think utilities -- in the US you can write off a percentage of your utilities equivalent to the square footage of the area used as "business space"), then you should only be writing off the equivalent that would be used for the business. So if he played a $60 game 50/50 online and offline, he'd technically only be able to write off $30 of that (which means he only gets a portion of that $30 off his taxable income, he doesn't just get that money, a lot of people seem to think tax write offs mean you just get that money back which isn't even close to true), but I doubt the IRS is going to come calling over shit like that since it's basically unprovable.
As for the whole "gift" thing, it can get a little bit weird. My very facile understanding of it is that if it's intended to be used as part of a job or business or for performing a service or something, you can't just qualify something that's not a direct monetary contribution as a "gift". Like if you ran a printing service and someone "gifted" you $10k worth of printers and scanners intended to be used to aide the business, then that's not technically a gift that isn't taxable income; you gotta put that shit on your taxes as actual income in some capacity.
So in that context, you might say he's "gaming the system", but I'd just consider it flat out illegal because the "gift" in question if it's a PSN card or some other electronic voucher is intended to be used to purchase a game which he uses to generate revenue for his business. But the IRS ain't gonna come at him over 100 bucks, either; it's only really an issue if it became a frequent thing because we're talking about like $10 at the end of the day.
Gift tax can be confusing, but in this situation I'd say what he's doing is wrong. The whole "gaming the system" thing though, it's something everyone does and I wouldn't give him shit over it. Everyone's trying to save money wherever they can and if he finds shit he can legally write off because of how the laws are, then he's free to do it and people are sperging out over shit that millions of self-employed people do every day.