Waning PC gaming hardware sector demands new approach

The global gaming market is growing rapidly and shows no sign of slowing down. In 2016, it was valued at $99.6bn, and estimated to reach $118.6bn in 2019.

PC spending accounted for $35.8bn of this total; much more than any other sector. However, PC games and hardware revenue is still decreasing. What are the reasons for this and how can it be prevented?

PC’s place in global gaming

The largest share of the global gaming market (37%) is covered by games played on PC. However, this is not limited to gaming hardware – it also includes webgames and massive multiplayer online games (MMOs).

Consoles and VR are a close second with 27% of the market. Mobile and smartwatches take third, and are followed by handheld devices. However, as technology develops, expenditure in these three categories is growing steadily.

China has overtaken the US as the largest gaming market in the world; it stands at $24.4bn against the US’s $23.6bn. With a larger population, and a market that’s yet to reach mature penetration, we can expect China’s lead to continue to grow.

This is positive news for the PC gaming industry, as 68% of the Chinese market is comprised of PC expenditure. This is very different to the US, where consoles and VR hold the majority (45%).

Why are PC hardware sales declining?

Mobile gaming is growing faster than the PC and console markets. Casual gaming has recently transitioned from being based on PCs, to mobile devices due to their speed, accessibility and portability.

It used to be that many games were only available through purchasing physical hardware copies, now it is not uncommon for games to be downloaded either through a PC or directly through the console. In fact, since 2014 (the first year where digital downloads overtook physical copies 52%:48%) the majority of games have been distributed digitally.

Gaming digital and physical sales

The reasoning behind this shift seems to be ease of use. Players can receive their games almost immediately after payment (if not pre-ordering), without leaving their chair.

PC gaming hardware is not limited to games themselves. It is also the machines they use to operate the latest gaming tech. VR and eSports drove a huge increase in PC game hardware in 2016. Total sector sales reached £258m (+64.3%), however it is still considered to be in decline as this momentum failed to continue.

What is being done to combat this decline?

Acer, ASUS and Lenovo have re-targeted their marketing campaigns and hardware designs for gamers. They represent an industry shift that is trying to combat the current slump in PC shipments. With new technology available from these three manufacturers, it is possible that the PC gaming hardware market will see a rise.

Purchasing hardware is a labour of love for many gamers – whether they’re selecting one part, or a whole PC (often custom built) it takes a lot of time, energy and research to find the right fit. However, once they have found it, they want to be able to purchase it quickly, and with as little disruption to their day as possible.

If you also offer in-game purchases, gamers want to be able to buy items without interrupting the game flow. By offering simple, easy payment that doesn’t leave the host page, PC gaming hardware businesses will improve the customer experience, compete with PC digital software and begin to grow once more.

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