The market for PC gaming hardware has surpassed the $30 billion mark worldwide for the first time, according to a report by Jon Peddie Research. The figure consists of pre-built and DIY gaming computers, upgrade components, and accessories like mice, keyboards, and headsets and is forecasted to grow at a compound annual growth rate of 6% through to 2019.
High-end PC products accounted for almost half of PC gaming market sales in 2016, outselling both entry-level and mid-range hardware. This shift has even lead JPR to rename the three tracked segments of hardware from mainstream, performance, and enthusiast to the new labels entry-level, mid-range, and high-end. According to President of JPR, Jon Peddie, “We know that gamers with lower budgets are just as passionate about gaming as those with more resources and are enthusiasts in the purest sense of the word, so we decided to transition to a more descriptive terminology.”
High-end hardware accounted for 43% of sales or $13.045 billion in 2016, with mid-range and entry-level hardware accounting for 35% ($10.617 billion) and 22% ($6.684 billion) respectively. Though entry level consumers may be just as enthusiastic about PC gaming as those building high-end rigs, the growth trend shows that the majority of gamers are focusing on the higher end when making their purchasing decisions.
The popularity of resource intensive virtual reality systems like the Oculus Rift and HTC Vive, as well as the rising adoption rate of higher resolution displays, may explain why the majority of PC gamers are opting for more capable hardware. Additionally, the report states that gaming is a prime motivator for PC sales in a mostly stagnant market. As mobile devices take on more basic tasks, this leaves power users, such as content creators and gamers, to drive PC sales.
The report highlights the strength of the PC ecosystem, greater options, and a broader spectrum of experiences as reasons for the drastic increase in users worldwide. The Asia Pacific region in particular leads in both market size and growth. JPR cities the large population, lack of significant traction for consoles, and an entrenched PC gaming culture as reasons for the $11.3 billion in hardware sales and an APAC annual growth rate of 7% until 2019.
In comparison, western markets lead in sales of high-end hardware, albeit at a slower growth rate. North America is growing at a rate of 5.78% with Western Europe at 6.63% compared to Asia Pacific at 9.61%. The jump to mid and high-end hardware also accounts for the increased market revenue as prices are higher in these brackets.
The diversity of budgets and needs of gamers across the globe have not been lost on the hardware manufacturers themselves. 2016 saw the release of hardware that catered to the needs of gamers across every price point from every manufacturer. Having just launched their “Kaby Lake” processor lineup, Intel’s offerings span from the budget oriented $65 G4560 Kaby Lake Pentium chip to their most powerful $339 Core i7-7700k.
Last year NVIDIA also premiered their “Pascal” GPU lineup which includes the $599 GTX 1080 and the monstrous $1200 Titan X, geared to the most demanding of users, alongside the GTX 1050 which offers smooth 1080p gameplay to rival consoles for less than $150. Likewise, AMD boosted their GPU selection with the RX 460 and RX 480 for less than $250.
Things are only getting better for the PC gaming market as we move into 2017. NVIDIA and AMD will be releasing new “Vega” and “Pascal” GPUs aimed at high-performance VR, and UHD enthusiasts. In the next few months AMD will also release their Ryzen CPUs built for their new AM4 motherboards to compete against Intel’s latest Kaby Lake processors.