For Struggling PC Market, It's PC Gamers To The Rescue
IDC Insights Research dropped some doom and gloom earlier this year, reporting that Q1 2013 PC shipments were down a drastic 13.9% globally, compared to the same period in 2012. This represented the worst decline in the US since 2006, despite Windows 8 and some inspired hardware to accompany it from the likes of Lenovo, ASUS, and Dell DELL -0.15%. Apparently no one told PC gamers about this decline, as a new report from Jon Peddie Research illustrates.
Now more than ever, we’re seeing a decisive separation of so-called “casual” and enthusiast or “hardcore” PC gamers. JPR president Jon Peddie explains that a growing number of users are migrating to tablets and smartphones as the specs of these devices continue to mature. With that shift, the remaining PC users are going considerably high-end. In fact, Peddie confidently states that his research group is “forecasting growth in the most expensive discrete graphics products.”
I couldn’t help but wonder if Peddie knew just how expensive those “discrete graphics products” are (he does). NVIDIA’s GTX Titan boasts 6GB of GDDR5 memory, and averages a $1000 price tag. AMD’s Radeon HD 7990 is currently retailing for approximately $900.
Looking for answers, I reached out to Kelt Reeves, founder of the venerable Falcon Northwest, a company who’s been building custom PCs since the early 1990s. What he offered backed up Peddie’s claims.
“The Nvidia NVDA -0.14% GeForce Titan is our #1 selling graphics card by far – despite it being the most expensive,” Reeves reveals. “What’s more, our customer for this card is actually buying an average of 1.3 Titans per PC. In other words, a huge number of them are buying two and even three of these monster GPUs in a single system.”
Perhaps Falcon Northwest has a more affluent clientele? I needed at least double confirmation on this, so I spoke to Wallace Santos, CEO and founder of MAINGEAR. “We notice that when it comes to graphics, the NVIDIA GeForce GTX 770, 780 and Titans are our most popular selections,” Santos confirmed. NVIDIA’s GTX 770 starts at about $400.
Continuing, Santos tells me that “on average most of our customers that are high-end gamers spend around $4k or more.” Surely that’s an anomaly, right? Back over to Reeves at Falcon Northwest: “Our ASP [average sale price] this year is $4,100. An interesting data point: we’ve seen a 16% increase in customer spending on the GPU this year over last.”
So what’s driving these purchases? What bleeding edge tech is causing PC gaming enthusiasts to gleefully hand over wads of cash? Both men offer equally believable answers.
Reeves believes that “the real game-changer for PC gaming this year is the introduction of 4K displays. Games can give you 4K resolution right now, so you don’t need to wait for Hollywood to bring you movies to enjoy [it]. But with 4 times the number of pixels to drive than a 1080P display, 4K demands at least two of the top graphics cards to be able to play 3D games smoothly. Once you’ve seen a PC game running at 4K, no console can even come close.”
Falcon Northwest's Tiki is the poster child for a growing trend toward smaller systems packed with high-end components | Image credit: Falcon Northwest
Over at Maingear, Santos attributes the rampant growth to “online gaming, e-sports tournaments and having the PC gaming community able to connect more with media outlets such as twitch.tv, PC gaming enthusiasts will always be looking for more performance from their hardware to get the experience and speed they are looking for.”
That sentiment actually mirrors a great point made in JPR’s report. Peddie says that PC gamers continue to “buy and build with a fervency that could be compared to motorcycle, 4×4, and sports car enthusiasts.”
One final note that should leave you agape: Peddie estimates that upcoming PC exclusives like ARMA 3 from Bohemia Interactive will influence $800 million in PC builds.
As always, a friendly reminder that PC gaming isn’t dead, and is nowhere near dying.
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