by Anton Shilov
11/19/2008 | 12:58 PM
Sales of hardware designed for video gaming on personal computers will continue to grow at a rather rapid pace in the coming years, according to Jon Peddie Research, a research and consulting firm for graphics and multimedia. In addition, the market observers claim that motivation for purchase by video games is increasing among end-users.
According to Jon Peddie Research, the total market value for PC gaming hardware in 2008 was just over $20 billion, but that will grow to over $34 billion by 2012. In addition, JPR claims that PC gaming systems pull in an additional $6 billion in software and services sales in 2008. According to JPR, Asia/Pacific region is the largest market for PC gaming hardware.
JPR considers a very wide range of devices as “PC gaming hardware”, including graphics cards; central processing units; mainboards and chipsets; memory module kits; mice and keyboards as well as dedicated controllers for games; coolers, computer cases and other components; speakers and headsets; monitors and so on.
The market of PC gaming hardware is divided into three segments: enthusiast, performance and mainstream. Jon Peddie Research predicts rather high compound annual growth rates (CAGRs) for each of them till 2012 in its new Worldwide PC Gaming Hardware Market report series:
“One of the things we look at in our study is the motivation for purchasing decisions. As with any multi-use product there is diverse motivation and justification for each dollar spent on the product. Even super high-end boutique rigs do not carry 100% motivation for purchase by video games. In two of the three segments of our reports we forecast an increasing influence of gaming on the purchasing decision of the products,” explained Ted Pollak, a senior game industry analyst at Jon Peddie Research.
According to JPR, purchase motivation for gaming in the mainstream market segment is just about 6%, however, this is going to increase, which automatically means higher demand for hardware designed for gaming. This means that total available market (TAM) for PC gaming hardware will increase even if sales of hardware in general will stall.
“So even if all products were frozen at their current sales levels for the next five years - there would be a natural increase in the TAM related to gaming,” said Mr. Pollak.
The analyst firm states that currently PC gaming hardware market is rather complicated: there are branded and boutique fully-assembled desktop and notebook PCs aimed at gamers and there are loads of systems built by end-users. Moreover, more and more gamers often upgrade their personal computers with more advanced graphics cards or central processing units (CPUs) themselves, which further boosts the market.
“The PC gaming hardware industry is a worldwide growth phenomenon and there are striking changes to the environment on the horizon. Don't get caught surprised – our PC gaming hardware reports will provide virtual binoculars for companies involved in the space so that they are prepared for the approaching shifts. Now, more than ever, suppliers can't afford to make any missteps in their marketing and sales strategies,” said Jon Peddie, president of Jon Peddie research.
Unfortunately for video game developers, even enthusiast PC gamers do not acquire a lot of titles, but spend loads on boosting performance of their systems. However, since there are many online games or online-distributed titles, they may still spend a lot on various services and games.
“Enthusiast PC gamers often latch onto one or two games that offer multiplayer options and stick to these titles for years. Hardware is where they spend the big bucks. The retail numbers don't capture the casual and digitally distributed games either. Retail software figures are not an accurate barometer for the health of the PC gaming industry,” said senior game industry analyst at Jon Peddie Research.
Still, despite of the fact that the market of video game consoles growth with giant pace, PC gaming market will remain in place, believes Jon Peddie Research.
“The CAGR of PC gaming hardware will not be reduced by consoles. Only if you are looking at the software would this be true, and even then I think that software for PC gaming could resurge for various reasons. So with the total PC gaming market the ratio of hardware to software is much higher than the console business – they are different animals,” said Mr. Pollak.
The Worldwide PC Gaming Hardware Market report series by Jon Peddie Research comes in three versions: Enthusiast, Performance, and Mainstream versions, with each version selling for $5000 and the set of three for $12 000. The three segments studied in these reports examine and profile thirty-seven countries in seven regions.