Meant to be Seen is very honored to have Dr. Jon Peddie as a guest contributor to mtbs3D.com. Dr. Peddie has been a pioneer in the computer graphics world since 1962, has made countless media appearances (e.g. CNN and TechTV), and is most importantly a proud gamer. Dr. Peddie is considered one of the most influential analysts of our time, and we are certain his experience will be well received at MTBS.
The console might be getting all the attention these days, but the PC gaming market is actually much larger than most reporters and analysts realize.
The computer market can be divided into three primary segments when viewed as a gaming platform. The three platforms are: Enthusiast, Performance, and Mainstream, and they include a broad range of players. As a result, from a hardware point of view, PC gaming is a much bigger market in units and dollars than the console gaming market.
And, do you know why? Because of Peddie’s first law:
"In computer graphics, too much is not enough" - Jon Peddie 1980
The desire to get to the ultimate realism is far from being reached, but we get a little closer every year. It requires the best in technology, and that technology is available at almost every price point.
Compared to the overall PC market, the Enthusiast segment accounts for only a relatively small number of unit shipments. Those systems, though, are among the most expensive and deliver very healthy margins. Enthusiast-class AIBs deliver the highest possible performance and offer the enthusiast or hobbyist the ability to tweak the AIB (e.g. with special cooling and clock manipulation) to exceed the published specifications.
Figure 1: A liquid-cooled enthusiast’s gaming PC (Courtesy Castle Computer Systems)
Enthusiasts pay very little attention to price tags. If the PC or AIB promises the best gaming experience, they will be bought, and MSRPs in the category aren’t declining. In fact, recent top-end PCs and AIBs on the market have been gaining in price. In our analysis we use Enthusiast AIB’s as the cornerstone but also account for Enthusiast systems as a pricing segment with an average of $2,450 including a monitor factor adjusted for gaming motivation and purchasing frequency.
The Performance computer segment isn’t as clear-cut as the Enthusiast segment. Some, like JPR, treat it separately from the higher-end Enthusiast category, and others include the Enthusiast category within the Performance segment.
Admittedly, there is overlap between the two, but one of the major points of distinction is that performance machines are sold into the broader markets, advertised as machines for entertainment or high-end professional use. In addition, they are equipped with newer, high-performance graphics chips, but typically not the most powerful.
Often, the performance sector AIBs are the previous generation’s Enthusiast AIB, but they are also built up on lower-cost GPU derivatives of the current top-end GPU part. In our analysis we use Performance AIB’s as the cornerstone but also account for Performance systems as a pricing segment with an average of $1,464 including a monitor factor adjusted for gaming motivation and purchasing frequency.
The mainstream category is the largest unit volume and the lowest performance segment. The AIBs used in these systems can be either specially designed (to reduce cost), older generation models, or special versions with GPUs that are higher end but have not passed all the tests to be in the higher classifications (this is one way GPU suppliers manage fab yields and inventory costs). Mainstream systems and AIBs offer solid capabilities for Internet, gaming, and office productivity applications. We include Value PC’s and GPU’s in the Mainstream segment. Regardless of their budget, people of all economic levels love computer games and they serve to influence PC purchases even at the lowest level.
In our analysis we use Mainstream and Value AIB’s as the cornerstone but also account for Mainstream systems as a pricing segment with an average of $714 including a monitor factor adjusted for gaming motivation and purchasing frequency.
“Today’s scientists have substituted mathematics for experiments, and they wander off through equation after equation, and eventually build a structure which has no relation to reality.” Nikola Tesla July 1934
Tesla foresaw the game market before there were computers…
In sheer numbers more gaming capable PCs are shipped every year than the installed base of consoles.
Figure 2: Gaming capable PCs shipped per year (Source: Jon Peddie Research)
The Enthusiast Market
The Enthusiast gamer is defined as a game player with experience and commitment who buys a computer with main intent of using it to play games, and has a high budget for this purchase. By definition such a computer is capable of running an office productivity tools suite and performing on the internet. The questions the Enthusiast gamer is likely to ask are:
Will this machine offer game performance that far surpasses that of a console?
Does the machine have styling features that appeal to me?
Is it solidly engineered for heat mitigation and durability?
Is it customizable?
Quite often, there is also an interest in peripheral activities such as, will it handle digital media editing?
Figure 3: The Worldwide Enthusiast PC Gaming Hardware Market (Source: Jon Peddie Research)
Almost $9 billion (US) dollars of Enthusiast PCs were sold in 2008 which includes branded system, custom built boutique systems, and DIY (Do-it-Yourself).
Yeah, but only kids play games
It all depends on what your definition of a “kid” is. Keep in mind that an enthusiast gaming PC STARTS – at about $2,500, and the folks at CyberPower tell me their average PC sells for $12,000! “Kids” don’t have that kind of a budget.
And a recent Pew Foundation study found that more than one-half of US adults play computer games, and about one in five play every day or almost every day. And, out of all the gaming devices, computers are the most popular among the total adult gaming population, with 73% of adult gamers using computers to play games, compared with 53% console users.
Figure 4: Certified gamers
At Jon Peddie Research (JPR) we’ve been tracking and reporting on the PC gaming market since 1984, and it gets not only better, but amazingly better every year. The next big thing to enhance the gaming experience will be stereovision, incorrectly called 3D, and should be called 3D vision – but that’s a diatribe for another time.
The PC gaming market has experimented with 3D vision since the mid 90s, and for various reasons it was lacking. However, as a concept it never lacked interest, and this year we can mark as the resurgence of 3D vision on the PC. That will happen due to new 120 Hz monitors, improved shutter glasses, and better software management of the game to produce the stereo images.
JPR has performed a study on the influence of computer game on the international market for PC game machine purchases and have produced a report that calculates the market TAM worldwide and estimates how fast these markets will grow.
Estimated worldwide PC gaming hardware shipments and regional; market share out to 2012 - the growth is an amazing:
The Enthusiast segment has a worldwide CAGR of 9%
The Performance segment will have a CAGR of 19%
The mainstream segment’s CAGR is 21%
Gaming PCs touch all segments of the market, with the most expensive at the high-end, known as the Enthusiast segment where the utilization for gaming is highest, down to the mainstream where the utilization for gaming is about 6 percent
The total, hardware only, market value in 2008 was just over $20 billion, and that will grow to over $34 billion by 2012 - and those systems will pull in an additional $6 billion in software and services sales.
JPR, is very enthusiastic about the gaming market, both PC and console, but we see the potential for greater and faster growth as technology drives the PC segment - and it’s never going to end. In computer graphics too much is not enough.
MTBS is very grateful for Dr. Peddie’s contribution! Share your thoughts in our forums and see if you agree with his analysis and what this means for stereoscopic 3D gaming.