The Increasingly Important PC Gaming Market

As a market research analyst, I’m constantly searching for new data points when I read the news, talk with people, or walk the aisles at a brick and mortar store. This week, I noticed something interesting at Costco: There were three in-store displays of PCs designed specifically for gamers. There was a Lenovo Legion-branded notebook ($999), an ASUS Republic of Gamers notebook ($999), and an Acer Predator desktop ($1,299).

Based on my ongoing conversations with PC vendors, component companies, and other retailers, I knew gaming PCs had become a hot topic. But seeing three prominently displayed in Costco drove home the fact PCs designed specifically for gaming have officially moved from a large and very profitable niche to a serious mainstream business. (And that’s leaving aside the serious dollars associated with the rise of eSports, which merits its own future column.)

Incidentally, it’s worth noting many people incorrectly presume Costco shoppers are cheap. They’re not. They’re savvy shoppers willing to spend when a product is worth the money. And they know they can return items that disappoint them; another reason that gaming PCs showing up there is so interesting.

Serious About Play
Major PC vendors have long coveted a slice of the gaming PC market, which is why Dell bought Alienware in 2006 and HP bought Voodoo that same year. And, despite the ongoing consolidation in the PC market, boutique gaming vendors such as CyberPower, Falcon Northwest, and iBuyPower are still going strong.

Why focus on gaming? Because in a market where margins are constantly under downward pressure, gamers are often willing (and able) to spend more to get the best. The fastest processor, the highest quality RAM, the speediest SSDs, and top-end graphics. And they want it wrapped in a slick chassis, with a high-quality display, keyboard, and input device. For many years, gamers insisted on desktops (often self-built), which let them swap out components to stay on top of the latest technology. Today, an increasing number are shifting to high-powered gaming notebooks.

Gaming is unique in that it is one of the last areas where high-performance PC components directly impact the quality of the consumer experience. In just about every other consumer-centric use case, the pain points are more likely the network than the hardware. But, when you buy a top-shelf gaming PC, you see a direct benefit in terms of frame rates and quality of play.

Spend More, More Often
My IDC colleague Linn Huang recently completed a very interesting survey of U.S. consumers in which he asked many deep-dive questions about notebook and desktop past purchases, usage, lifetimes, and replacement plans. He also asked about gaming and captured some great data points from self-proclaimed gamers. Most notable: Respondents who self-identified as hardcore gamers on average spent about $875 for their current desktop or $776 for their current notebook. Self-identified gaming enthusiasts spent $810 and $735 respectively. Meanwhile, those who identified as casual gamers spent $698 and $590, while non-gamers said they spent an average of $669 and $660.

The fact gamers will spend more to buy a new notebook or desktop is reason enough for the PC industry to be paying close attention. But IDC’s survey also reflected another key element: They’re likely to buy new PCs more often, too.

When we asked respondents what typically triggers the need to buy a new notebook, 65% of non-gamers said they replace a notebook “when it wears down or breaks,” while just 15% of hardcore gamers chose that answer. The most common reason (24%) hardcore gamers said they replace their notebook? “I replace my notebook when a new technology comes out that warrants an upgrade.”

That’s the kind of customer any business wants. And today’s gamers are leading the charge in a new area that also requires high compute: virtual reality. This year, we’ll see vendors ship new VR products designed to drive a good experience using a less powerful PC. But for the foreseeable future, I expect the very best VR experience to occur using a high-end gaming PC. I’ve been using Dell’s Alienware 13 to test the HTC Vive VR rig, and it drives a great VR experience. Starting price for the notebook: $2,049.

The final reason PC companies are so keen to grab a portion of the lucrative and growing gaming PC market? It’s an area where Apple continues to decline to participate and there’s no reason to believe that will change any time soon.

Published by

Tom Mainelli

Tom Mainelli has covered the technology industry since 1995. He manages IDC's Devices and Displays group, which covers a broad range of hardware categories including PCs, tablets, smartphones, thin clients, displays, and wearables. He works closely with tech companies, industry contacts, and other analysts to provide in-depth insight and analysis on the always-evolving market of endpoint devices and their related services. In addition to overseeing the collection of historical shipment data and the forecasting of shipment trends in cooperation with IDC's Tracker organization, he also heads up numerous primary research initiatives at IDC. Chief among them is the fielding and analysis of IDC's influential, multi-country Consumer and Commercial PC, Tablet, and Smartphone Buyer Surveys. Mainelli is also driving new research at IDC around the technologies of augmented and virtual reality.

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  37. The shift of gaming PCs from a niche market to mainstream business is indeed fascinating, and your observations at Costco highlight this trend. It’s evident that gaming has become a serious consideration for PC vendors, and the fact that major players like Lenovo, ASUS, and Acer are prominently featured in a mainstream store like Costco reinforces the increasing importance of the PC gaming market.

    Your point about savvy Costco shoppers speaks volumes about the changing perception of gamers. They are discerning consumers willing to invest in quality products, as reflected in their choice of high-performance gaming PCs. The move from desktops to high-powered gaming notebooks underlines the evolving preferences within the gaming community.

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