PC Gaming Hardware Sales May Be Poised to Explode

PC Gaming Hardware Sales May Be Poised to Explode

Ever since the pandemic and cryptocurrency markets teamed up to ambush Ampere in a dark alley, there have been concerns about what another long period of unaffordable hardware would do to the PC gaming industry. A new report from Jon Peddie Research echoes these concerns but also assuages them, predicting that the industry is on the cusp of a tremendous upgrade cycle as stymied gamers finally buy into hardware that’s been priced out of reach for nearly a year.

As JPR notes, the recent boom in sales has been great for the resellers who captured the majority of profits, but less so for the gamers who actually wanted to buy hardware. They argue that this is finally changing, thanks to the collapse of cryptocurrency mining in China and improved hardware availability.

PC Gaming Hardware Sales May Be Poised to Explode

“PC gaming hardware companies are reviewing their just-in-time strategies and beginning to adopt just-in-case inventory levels,” says Ted Pollak, JPR’s senior game tech industry analyst. “As a result, we expect inventory and sales of high-end products to grow dramatically in the coming years. Additionally, ultrawide and 4K+ displays are now available at big box stores and online for historically low prices. This helps drive CPU and GPU demand, full builds, and accessory sales to gamers,.”

JPR’s prediction here runs counter to data we’re seeing in the wider PC market. According to recent reports from IDC, Gartner, and Bloomberg, there are reasons to think the PC bull market as a whole is finally cooling off. Bloomberg notes that electronics spending growth had jumped by 40 percent in March of 2021 compared with the previous year. For June, the equivalent figure is just 20 percent. IDC reports that demand for PCs in Q2 2021 was up 13.1 percent compared with the year-ago period — but that this has sharply tapered compared with the 55.9 percent growth rate seen in Q1 2021 and the 25.8 percent growth rate of Q4 2020.

PC sales in Q2 2020 were only up 2.8 percent over Q2 2019, so this is not a case where a surge in sales last year is a continuation of otherwise excellent growth. Desktop growth actually outpaced laptops last quarter due to component shortages. Desktop sales fell badly during the pandemic relative to notebooks, so this is an interesting reversal. There’s evidence that Chromebooks continue to account for a large percent of the total. Gartner, which does not count Chromebook sales, reported a year-on-year sales increase of 4.6 percent. IDC, which does include Chromebooks in the PC market, reported an increase of 13.2 percent.

Gartner and IDC are both calling for caution as regards the future of the PC market, after predicting that robust demand would continue for the foreseeable future earlier this year. JPR’s prediction of high gaming PC demand doesn’t necessarily contradict what the other research firms are predicting, however. Gamers have always been a specific, niche market and many never got a chance to upgrade to Ampere when it was new. It’s possible that we’ll see PC sales decline back towards the historical average while gamers kick off a robust upgrade cycle for the next 12-24 months. This depends on GPU prices remaining sane for that length of time — something they haven’t actually been very good at this past five years.

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