PC Gamers: A Dying Breed?

Gamers are often devided into two categories: those who play on consoles and those who play on PCs.

A console gamer will drop few hundred dollars for Sony's PlayStation 3, Microsoft's Xbox 360, or Nintendo's Wii, but a PC gamer who wants to purchase a desktop or laptop optimized for gaming could pay thousands just for the machine.

Some hard-core PC gamers may then spend even more money tricking out their systems with liquid cooling, overclocked processors, multiple monitors and numerous customized control units.

With the often wide cost spread between the two gaming categories -- and with many of the big-name game developers focusing more of their attention on releasing titles for one or more of the major gaming consoles -- does the PC gamer represent a dying breed?

Game-Changing Marketplace

"The market for hard-core PC gamers is shrinking on a relative and an absolute basis," said Andrew Sheppard, an executive producer for interactive media at hi5 Networks. "Hard-core gamers are switching in increasing numbers to the console equivalents of their favorite PC games and PC game genres."

"Although hardcore PC games are in decline, the category for PC games as a whole is definetly growing," Sheppard told TechNewsWorld. "Recent business models, game design and technology innovation are driving a sea change in PC gaming."

Traditional game developers like EA and Activision Blizzard are ill-prepared for the new world of PC gaming that is unfolding, he said, predicting that major innovation will be in online PC gaming from companies like Playfish and Playdom.

"PC Gaming will definitely survive, but the notion of consumers buying PC games at retail is surely a thing of the past. In the future, PC games will be online services distributed through major social entertainment sites like hi5," he said.

PC Gaming Here to Stay

The changing marketplace for games has prompted Muzzy Lane Software to developed a new gaming platform called "Sandstone," which delivers 3-D gaming in the browser to integrate gaming easily with the Web.

"All kinds of gamers play all kinds of games on the PC: from the casual games embedded in social networks like Facebook and browser-based Flash games to massive multiplayer online games," said David McCool, president and chief executive officer of Muzzy Lane. "As a whole, more people are playing digital games than ever before."

PC game sales at the retail level have diminished somewhat, but that does not reflect the reality that many PC gamers get their games through digital download or through services like Steam or Impulse, McCool told TechNewsWorld.

"The reality is the PC game market continues to grow because the game development industry has improved its product," McCool said. "Digital distribution makes it easier to get games for consumers, and it is a boon to independent developers who would never have been able to attract large publishers or secure retail space."

Not One or the Other

While the recent price drops of the major game consoles have caught the media's attention, McCool noted that PC hardware is also dropping in price. Therefore, a medium range computer does not cost that much more than a fully loaded console.

"We don't see a big distinction between PC gamers and console gamers," he insisted.

"Muzzy Lane, for instance, is staffed with a talented team of developers who are enthusiastic about games," said McCool. "We play them on the PC, but we also own and enjoy console games. We also view games based on our platform as another type of console."

The hard-core gamers who live to create custom systems and measure how much they can overclock their systems represent a small subset of gamers, McCool said. Many of these same serious gamers are also typically the ones more interested in how new game technologies are being created and used, and therefore are often early adopters.

Virtual PC Games

Many of the hard-core PC gamers are being replaced in the marketplace by casual game players and virtual-world users, Eric Elder, a game industry development representative at The Art Institute of California - Los Angeles, told TechNewsWorld.

Developers of virtual PC games, like IMVU, are making more than US$1 million a month on sales of virtual items, Elder noted, and the Facebook game "Farmville" from Zynga is the fastest-growing social game, drawing 11 million players in four months.

Eighty percent of Internet users are expected to be participating in some kind of virtual world by 2011, he added.

Meanwhile, two of the most-anticipated PC game titles, "Crysis 2" and "Unreal 3," had disappointing sales upon release, Elder said. "Many think that the requirements to run these games are out of reach for the average gamer."

Hard-Core Gaming on the Decline

Both the console and PC game markets are suffering at the moment, said Rob Enderle, principal analyst at the Enderle Group. Hardcore gaming is declining in general, he said, in much the same way that the traditional TV market is fragmenting.

"The problem for both gaming segments is there is an increasing amount of other stuff kids and adults are doing, which is pulling them away from gaming in general," Enderle told TechNewsWorld. "Both platforms are under pressure at the moment."

Developers have forgotten why people game and are focusing on making safe bets, like building never-ending sequels, he said, comparing the development of games to the development of feature films.

"When developers get too focused on safe revenue, customers stop showing up and go elsewhere for their entertainment," Enderle remarked.

The gaming industry, though down now, tends to go through cycles, he said.

"The ability to adventure virtually will only get better and I have every expectation we will see resurgence, though it may take up to a decade to get there," Enderle added.

Emerging Growth Markets

There are still areas of growth in the gaming industry, however, especially in developing markets. With PC gaming moving online, fewer titles are being bought in stores and instead are being purchased digitally, said Scott Countryman, chief executive officer of Digital Media Exchange.

"Hard-core gamers in Asia are still very much on the PC," Countryman told TechNewsWorld, noting that the latest gaming console, accessories and dedicated broadband are still luxuries that most people in emerging markets cannot afford.

Lower price, therefore, is a relative term based on the individual's purchasing power, he pointed out. It is not just $200 for the console that is the barrier. Instead, it is everything else that is required for gaming that drives up the total cost of ownership.

"Internet cafes provide a convenient and inexpensive way to not only play online games but also access social media and surf Web sites in a social setting," Countryman said, noting that most teenagers will purchase a mobile phone before buying a console or a PC for gaming.