As overall PC market declines, growth expected in gaming hardware

PC sales are in decline, a fact highlighted by the latest market report from Canalys. The research firm says second-quarter desktop and notebook shipments fell 7.4 and 13.9%, respectively. Tablets are apparently to blame; sales of those devices surged 42.9% for the same period.

The Canalys report certainly fits the narrative we’ve been hearing quarter after quarter, but there’s a new wrinkle this time around. While most folks predict that PC sales will continue to decline, John Peddie Research is forecasting growth in one segment of the market: gaming hardware. JPR expects 2013’s PC gaming hardware sales to be 3% below last year’s levels, but it anticipates 6.5% growth in 2014 and continued expansion through 2016.

Although casual PC users may be switching to tablets and other mobile devices, hard-core gamers appear to be sticking around—and prepared to spend. According to JPR Senior Gaming Analyst Ted Pollack, the upcoming Arma 3 will inspire $800 million in spending on PC gaming hardware. Interestingly, Pollack contends that PC games are putting additional strain on the CPU, encouraging users to upgrade more than just their graphics card.

Forbes did some additional digging and found that sales of ultra-high-end graphics cards appear to be particularly strong. The GeForce Titan is reportedly the highest-selling graphics card at boutique PC maker Falcon Northwest right now. Impressively, "a huge number" of customers are reportedly ordering systems with multiple Titan cards. Falcon Northwest has observed a 16% increase in GPU spending versus last year, too.

The average Falcon build rings in at around $4,000—similar to the average quoted by Maingear. That vendor told Forbes that its most popular graphics cards are the GeForce GTX 770, 780, and Titan. The GTX 770 is a $400 card, while the 780 and Titan retail for $650 and $1,000, respectively. Boutique builders obviously cater to folks with deeper pockets, but it’s telling that both AMD and Nvidia seem to have focused more attention on high-end offerings lately.

It seems inevitable that mobile devices like tablets and smartphones will service more of our basic computing needs moving forward. That trend may fuel a decline in the PC market overall, but gaming enthusists have good reasons to stick with PCs. Revenue from PC games seems to be on the rise, as well, suggesting our corner of the market is faring much better than the industry as a whole.

Comments closed
    • ShadowTiger
    • 6 years ago

    New Console Generation => Growth in Minimum Specs => Higher Hardware Revenues.

    Can I have a job as an analyst please?

    • BaronMatrix
    • 6 years ago

    But of course gamers generate LOTS of revenue… I will probably upgrade my monitors when I finally get a 7xxx or 7xx… I mean I’ve got a 6970 and a 24″ LCD now, but I think I want 1 27″ and 2 24″ instead of 1 24″ and 2 22″…

    I got “lucky” and found a DisplayPort 24 with 1900×1200…

    MS should have worked on a tablet OS first instead of the phone OS.. Ballmer has no vision… And the MONSTROSITY that is Win8 isn’t helping…

    • BaronMatrix
    • 6 years ago

    How many people’s PC was worthless six months after Core2Duo…? Mine was… It put a HUGE dent in the upgrade market… We’ve never recovered…

      • NeelyCam
      • 6 years ago

      Never should’ve bought AMD, eh..?

    • michael_d
    • 6 years ago

    Boutique builders such as Maingear, Puget, Origin PC charge a few $100 more for a PC with parts that can be purchased at Newegg or NCIX. I think it is not a bad deal for someone who does not like tinkering with hardware.

    Personally I have been pleased with Alienware for almost 4 years. PSU, MOBO, RAM, HD are rock solid while Video card is a breeze to replace.

    I am planning to get a new PC at the end of next year based on i7 E-Series 5xxx with Titan 2. Probably will go with Alienware unless I can find a decent builder in Canada.

    • Bensam123
    • 6 years ago

    Video game generation grows up, gains access to disposable income, can then afford good gaming PCs over whatever their parents buy them (console because they’re ‘cheap’, easy, and thats what kids use, right?). Sounds about right to me.

    A lot of video gamers roll their own builds though, so this could be converties from the console generation.

    • ThorAxe
    • 6 years ago

    The US media often forget that the rest of the world’s largest platform for gaming, by a huge margin, is the PC. $40 billion in hardware and software revenue dwarfs every other platform.

    In addition the PC does not have a Sony or Microsoft propaganda machine to brainwash the ignorant masses.

    People also tout mobile gaming but in terms of revenue it is a tiny segment.

    • Krogoth
    • 6 years ago

    Thank you marketing analysis for stating the obvious.

    PC market has been declining due to the fact that there still no mainstream killer app that makes dual-core systems from 2006 woefully inadequate. Venerable Q6600 and Phenom X4 II rigs are still able to handle almost anything out there.

    PC gaming market isn’t faring that much better either. It is mostly driven by GPU sales, which have been slowing down since DX10 era GPUs became affordable. DX11 era GPUs are continuing the trend. Integrated GPUs on modern CPUs are good enough for casual gaming and are cannibalizing low-end discrete GPU market.

    Nvidia and ATI are focusing more on the “budget is not a concern” and “I want the best” crowd more since they aren’t getting as many sales from the mid-range crowd. It is telling that you can still get by a HD 68xx and GTX 4xx era GPU if you aren’t trying to do 4Megapixel gaming with AA/AF on top. My own 660GTX only struggles when it goes beyond 2Megapixel gaming with high levels of AA/AF. 660GTX SLI can handle 4Megapixel gaming with AA/AF fine if you are willing to deal with the quirks of SLI.

    • MaryGreen06
    • 6 years ago
      • tootercomputer
      • 6 years ago

      Somebody please delete the above.

        • awakeningcry
        • 6 years ago

        What did it say??

          • ronch
          • 6 years ago

          Probably how to earn $1000 in your spare time every week.

      • bfar
      • 6 years ago

      Never in all my life… 🙁

    • aphile
    • 6 years ago

    I’m a die hard Falcon NW user for 12 years and I”m anxiously awaiting for its arrival this evening. I admit that my thumbs, fingers and brain are too slow to compete for fast and furious RPG’s. I chose the “boutique” Tiki because of Falcon’s stability and it’s smaller size. I chose not to pay for the Titan and selected the GeForce 780 instead.

      • spigzone
      • 6 years ago

      Why?

        • indeego
        • 6 years ago

        More $$$ / Less time, I imagine.

    • spigzone
    • 6 years ago

    This is where Nvidia’s long term The Way It’s Meant To Be KICKING AMD’S ASS gaming strategy starts to shine as Steam Box is released with Nvidia graphics and the Shield instantly metamorphs from head scratching puzzlement to ear pulling wonderment.

    AMD is about to have their @ss handed to them.

      • Firestarter
      • 6 years ago

      yeah, it’s not like AMD hardware is on the top of everybody’s Christmas wishlist this year

      edit: PS4 and XBone, to spell it out

      • internetsandman
      • 6 years ago

      You’re right. AMD totally didn’t get the two biggest design wins of the past five years secured for possibly the next half decade, and this won’t make people see AMD as better than they’ve seen them in the past

      • Diplomacy42
      • 6 years ago

      shield? you mean the PSP wannabe that can’t play most of your games except within 10 feet of your computer and still laggs sometimes anyway?

      shield kind-of blows.

      • albundy
      • 6 years ago

      ROFL! how many consoles has NV landed? That many, huh? LoL. Do you have any clue as to how many despise Steam including myself?

        • bittermann
        • 6 years ago

        According to the numbers on Steam there aren’t that many of you…

      • destroy.all.monsters
      • 6 years ago

      Switching teams are we spigster?

      Or fishing with a net?

        • spigzone
        • 6 years ago

        You’re confusing me.

    • slaimus
    • 6 years ago

    Both id and Epic needs to get their acts together and make good games that people want and push the hardware.

    • tasaunders
    • 6 years ago

    The media has been declaring PC’s dead for the last five years I think, but here they still are. To me the split is a logical one, it’s the muscle car vs. the family car choice. You buy a muscle car because you want the power and the performance. You build a gaming PC for the same reasons (although I doubt I’ll ever see the day [i<] I'll[/i<] have two Titans in anything)! Tablets are incredibly easy to use and are a source of easy to digest fun which tailors to kids, seniors and people who just can't be bothered.

      • Shouefref
      • 6 years ago

      Vinyl LP has been declared dead too. But, hey, it’s still around.
      Problem is media boys and marketing boys often put forward claims which are overly in favour of something.
      Take eg this:
      John Peddie Research is forecasting growth in one segment of the market: gaming hardware. JPR expects 2013’s PC gaming hardware sales to be 3% below last year’s levels, but it anticipates 6.5% growth in 2014 and continued expansion through 2016.

      Ok, I believe JPR’s expectations for the gaming market of 2013. But 2014? Let alone 2016? They can’t know that. It’s impossible. If the economy all at a sudden becomes worse, than all those figures have to be downrated. If there is a new gadget which captures the attention, thatn the figures have to be downgraded too. However, if one of the games on the market by the end of the year becomes suddenly ridiculously popular, all of the figures might have to be upgraded.

        • Wildchild
        • 6 years ago

        Lol all I buy now are LP’s. LP’s have made a huge rebound within the past couple years.

    • ronch
    • 6 years ago

    So much for the belief that PC gaming is dead.

    PC gaming FTW!

    • kamikaziechameleon
    • 6 years ago

    I honestly don’t understand AMD’s business plan. Originally it was to have 2 main lines of cards targeting the 100-200 dollar price range and the 200-300 dollar price range. That would be the x850 and x870 lines and the x950 and x970 respectively.

    Then the cards debut about 100-200 above their target window… WTF?

    Meanwhile Nvidia makes 2 cards targeting mainstream and super high end deliberately. Double dipping in their extremely successful workstation architecture.

    I think both companies produce solid products but the fact that AMD seems to aim at one thing and hit another is discerning. Since they make price range commitments and design/engineer for them they can’t help to compete against products that are designed/engineered first, priced later unless they stick to their pricing guns.

      • DPete27
      • 6 years ago

      Launch prices are almost always high because the new cards are priced in-line with the still readily available previous-gen card in terms of performance.
      Also, the [i<]new[/i<] stuff is more desireable which can compound the price premium. The 28nm release (AMD 7xxx / Nvidia 6xx) was a great example of these theories. Seems like Nvidia is being very agressive with their 7xx lineup thus far.

      • lycium
      • 6 years ago

      I’m pretty sure you mean “disconcerting”.

    • CampinCarl
    • 6 years ago

    $4,000 for a desktop machine using conventional consumer parts sounds a bit excessive. I know that the build quality for these systems is (typically) exceptional as well, but $4,000 will buy you a pretty solid 2S ‘workstation’ with 32GiB of RAM and far more than 12 cores.

      • kamikaziechameleon
      • 6 years ago

      And that will also play games 🙂

      • brucethemoose
      • 6 years ago

      Shhhhh! All our customers don’t know that!

      -Falcon Northwest

        • swiffer
        • 6 years ago

        They’re well aware. The service and support that comes with a Falcon Northwest system means you get a solid system and a company that stands behind their product with free shipping on part replacements and phone tech support that actually has hands-on experience with systems similar to your own.

        Drop $4,000 on a Falcon Northwest system and you don’t have to spend days researching the current state of gaming, worrying about cost-cutting measures that lead to a ruined experience, or spending your gaming time personally troubleshooting and RMAing a faulty GPU HSF… for the next 3 years.

        Don’t get me wrong: I love researching, pricing, and building my own systems (and solving obscure problems), but I’m not going to pretend it isn’t a significant time investment that some people would rather skip (or pay someone else to deal with).

          • xeridea
          • 6 years ago

          Just go to Newegg, get the most expensive card and cpu, and a boatload of RAM, large SSD and your good………….. should be at least as good as a $4,000 system, for half the cost. If something dies, don’t RMA, just buy a new one, you will still spend far less.

            • indeego
            • 6 years ago

            People don’t want things to die. The theory goes that a D-I-Y system is far more likely to suffer from QA issues than something from boutique. I don’t know if that pans out, but it certainly saves you time to buy from FNW and just have something up and running in minutes. To some people time saved >>>>> money.

            • xeridea
            • 6 years ago

            They use identical parts as what you could get off the shelf.

            • indeego
            • 6 years ago

            But they presumably test them with tools that D-I-Y’ers do not use. They also have QA that might knows gotchyas between those components that a D-I-Y’er might not be looking into.

            Again, Probably most DIY people know how to look for and test for issues, but not everyone has the time for that. time time? Have I mentioned time?

          • MadManOriginal
          • 6 years ago

          Confirmation that I’ve gathered some knee-jerk down voters. +3 for your comment, -1 for mine which says the same thing in fewer words. Sweet!

            • swiffer
            • 6 years ago

            That’s because of your comma splice.

            (I’m confused as well. Perhaps it’s the lack of context establishment?)

      • MadManOriginal
      • 6 years ago

      Of course you can, you’re paying for assembly, validation, and support.

      • DPete27
      • 6 years ago

      Do you think those custom LC loops are free?

        • cynan
        • 6 years ago

        Custom LC loops?

      • Bensam123
      • 6 years ago

      You pay for support… Although you can get support with a Dell too. I guess in this case you’re paying for a fancy case (cause you don’t know how to transplant internals) and a name.

    • superjawes
    • 6 years ago

    This isn’t the first time we’ve heard this story. The “shinkage” in the PC market is just a shifting of “casual computing” from PCs to tablets/smartphones.

    But, of course, the headlne “PC GAMING IS DEAD” probably gets more hits…

      • jinx_player
      • 6 years ago

      Strange, I do not see pc gaming is dead anywhere in the headline.

        • superjawes
        • 6 years ago

        I never said it was…

    • DPete27
    • 6 years ago

    I wonder if they factored the XBone and PS4 releases into their forecasts.

    I expect gaming PC sales have been held up in the past couple years by consumers not wanting to buy a 7 year old console when the new one is right around the corner. With the new consoles, we’ll see a peaked interest in console gaming that will blow the bottom out of PC gaming hardware sales.

      • swiffer
      • 6 years ago

      Not if Microsoft has any say in the matter. They’re desperately trying to make their new console as unappealing as possible in an attempt to boost PS4 and Gaming PC sales.

      • kamikaziechameleon
      • 6 years ago

      I expect pc gamers are just excited to finally watch low level assets upgrade as cross platform development continues to become the staple.

        • Airmantharp
        • 6 years ago

        That’s where I’m at. Games that can make good use of more than four cores and more than 4GB of graphics memory is a big plus.

          • Beelzebubba9
          • 6 years ago

          I, for one, embrace our new console overlords. Who knew an AMD64 CPU and commodity PC graphics could provide a compelling and broadly supported gaming platform?!

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