PC Gamers Still Buying, Building Systems Despite Slowdown

Jon Peddie Research found that, despite falling PC sales worldwide, PC gamers are still buying and building fast, powerful and expensive systems.

Overall PC sales worldwide may be shrinking the face of the growing popularity of mobile devices, but in the PC gamer segment of the industry, business appears to be booming.

In a report issued Aug. 7, Jon Peddie Research said gamers are continuing to buy and build the fastest and most powerful high-end systems they can find, fueled by the rapidly increasing demand from the latest games for more speed and better graphics.

In the report, Jon Peddie Research said that PC gamers are continuing "to buy and build with a fervency that could be compared to motorcycle, 4X4, and sports car enthusiasts, always looking for more speed, power, utility and handling."

"Not only is gaming becoming an even more important purchasing influence of PC sales due to the offloading of more basic functionality to smart devices, but we are forecasting growth in the most expensive discrete graphics products," Jon Peddie, president of his namesake firm, said in a statement. "We are also impressed with the embedded graphics offerings this generation and going forward."

That last part will be good news to both Intel and Advanced Micro Devices, which have spent the past several years integrating graphics capabilities onto their chips—creating products that AMD officials called accelerated processing units (APUs).

Game console vendors like Microsoft, Sony and Nintendo are rolling out the latest game consoles, which will be powered by AMD chips. However, according to Jon Peddie Research, PCs still offer a better gamer experience than consoles, due in large part to the newer, more powerful CPUs that included integrated graphics capabilities. Systems with the latest x86 CPUs can run the ultra-high-resolution graphics better than other platforms, and game consoles with their display restrictions and what Peddie calls their "forgiving couch-based control input," can't compete.

Given the financial impact of new games on the sale of systems, this bodes well for PC makers and chip vendors like Intel and AMD.

"The effect that key titles have on hardware sales is phenomenal," Ted Pollak, senior gaming analyst at Jon Peddie Research, said in a statement. "Enthusiast PC gamers embrace content creation and modding [or modification], so when titles like Bohemia Interactive's ARMA 3 are in the pipeline, we start to see anticipatory hardware sales."

Pollak said he is expecting more than $800 million of PC builds to be influenced by the ARMA 3 game alone, and games like it will help drive sales of chips with integrated graphics.

"A major component of this situation is that many games are placing increasing demands on the CPU," he said. 'The result is that swapping out the graphics add-in board is not enough this time around, and gamers are building [and ordering] overclocked PC's from the ground up."

Jon Peddie Research analysts are forecasting continued growth in the global PC gaming hardware space, from more than $18.3 billion in 2012 to more than $20.7 billion in 2016.

In addition, the firm also said casual gaming could also help fuel the x86-based tablet space, which would be a boost for not only Intel and AMD, but also Microsoft, whose touch-optimized Windows 8 operating system is still trying to find traction in the tablet market.

In July, Gartner analysts reported that the worldwide PC market—which is facing increasing competition from devices like tablets and smartphones—fell about 11 percent in the second quarter, continuing a trend seen over the past several quarters.