PCs scale up to the gaming challenge

Doug Young

TAIPEI: In an age when a new PC can cost just a few hundred dollars, an adolescent need for speed is creating a profitable niche for souped-up gaming computers at the ultra-costly end of the market.

A new generation of high performance PCs are tailor made for gaming enthusiasts, from teenagers upwards, who demand nothing but the best and are willing to pay top dollar for it.

These gaming PCs contain a wide range of high-powered extras: state-of-the-art processors, expensive graphics and sound cards, extra power supplies to run demanding programs, and cooling systems that prevent everything overheating without the use of noisy fans.

With price tags from US$2,000 to $5,000, the market is luring heavyweights Dell Inc and Hewlett Packard Co (HP) to join a small but devoted pack of lesser known specialists, including VoodooPC, Alienware and Falcon Northwest.

"The gaming market is definitely bigger than Hollywood in a lot of ways," said Rahul Sood, president of Canada's VoodooPC, one of about half a dozen companies specializing in the area.

The industry has grown rapidly from a minor niche within the PC world to one worth as much as $2 billion a year, said Sood, in Taipei this week to check out the latest computing products at Computex, the world's second-largest computer trade show.

"You're talking Dell and Hewlett-Packard selling to a mainstream market," Sood said. "They're legitimising gaming" as an important niche.

OUT OF THIS WORLD SALES

Although gaming PCs are still just a blip in a PC market estimated by research group IDC at $178 billion last year, VoodooPC's sales are testament to the sector's growth potential.

The company's revenue more than tripled last year after rising 125 percent in 2002, and is set to at least double again this year, Sood said.

He declined to give specific figures, except to say annual sales were well over $10 million. Alienware, whose stylish PCs sport ventilation grills shaped like alien eyes, rakes in more than $150 million in annual sales.

Taiwan's Shuttle Inc, a mini PC specialist, gets as much as half of its annual sales, which totalled T$15.3 billion ($455 million) last year, from purchases by gamers.

Shuttle says its PCs -- about the size of a shoebox -- are suited to parties where gamers gather at a single site, such as a home, and link their computers using a wireless network to compete head-to-head.

The computers are also highly customisable, allowing buyers to pick and choose their processors and other hardware, and even casings decorated with themes from games such as "Tomb Raider" and "Need for Speed".

"These people build their own PCs, they want to choose their own components," said Shuttle Marketing Director Cameron Rogers at Computex.

Perhaps the biggest names in PC gaming hardware are graphics chips specialists Nvidia Corp and ATI Technologies Inc, arch rivals making ever more powerful plug-in cards that retail for as much as $500.

While the sector is big and growing, gaming PCs are unlikely to encroach soon on the market for more popular gaming consoles, most notably Microsoft Corp's Xbox and Sony Corp's PlayStation, due to huge differences in price.

VoodooPC's Sood said that about 90 percent of gaming PC owners also own lower performance gaming consoles.

"There's always going to be a high performance gaming market," he said. "There's no question about it."

(US$1=T$33.6)

(Additional reporting by Ben Berkowitz in Los Angeles)

© Reuters