PC Gaming is Doing Great

It’s been over three-and-a-half years since John Dvorak declared PC gaming dead in his PC Magazine article.  He was cheered and reviled in many corners of the internet, and 2404 weighed in with an editorial.  Since then, the number of titles available for PC gamers has shrunk, but the reports of PC gaming’s demise have been greatly exaggerated.    

A casual stroll through a local Best Buy is responsible for this bit of reflection.  The PC Software section, once nearly a quarter of the inner floor space, has shrunk to a mere two aisles, with one side of one aisle taken up by the usual garbage photo- and video-editing utilities that perform as well as they are packaged and priced.  All the usual suspects were there: World of Warcraft: Wrath of the Lich King pre-order, Warhammer Online, The Sims, The Orange Box, the disappointing Spore, EA Sports titles, and the odd casino game.    There wasn’t much traffic in that small corner of the store, either.

What was the cause for the shrinkage?  Was Dvorak correct back in 2005, just much too early?  Are there other reasons?  The possibilities are immense, but some are readily apparent.  Is the gaming market in general drying up?  Is the PC gaming market in its death throes?  Have digital download services, like Steam, replaced the need for stores?  Is smaller packaging eliminating the need for floor space?  Is there competition from other areas of the entertainment market marginalizing games?  Each of these questions, except for perhaps the market question, can be rationalized by wandering through a retailer. 

Taking a quick look at information from NPD.com, an entertainment market research company indicates that the gaming industry in general has had three years of year-over-year record growth.  Revenue topped eighteen billion dollars.  This clearly indicates that the market for gaming is strong.  Also, from NPD.com, twenty-six cents of every entertainment dollar is spent on video games — more than both music and movie theater receipts.   If it’s not the market in general, is it that console gaming just beats the tar out of PC gaming?

Dollar wise, yes, it does.  PC sales accounted for only $911 million of those $18.8 billion in 2007.  A walk through the aisles of a retailer, however, tells somewhat of a different story.  The floor space for console video games is roughly the same as for PC games.  Most must-have titles appear on both console and PC platforms, although there are exceptions: Multiplayer games like Rock Band appear mainly on consoles, and MMORPGs such as World of Warcraft appear mainly on the PC.  Is there something inherently better with consoles that would deliver seventeen times the revenue? 

Not much longer than a few years ago, peripherals were a rare thing for consoles.  You had your usual gamepad and other than the occasional light gun, not much else.  PCs were the kings of peripherals — one can still build an entire cockpit of instruments, radios, and controls for flight simulators — but consoles now wear that crown.  Plastic guitars, rubber drums, crossbows, and nunchuks are now commonplace on consoles.    Portable gaming is another huge cash cow that PCs miss out on.  GameBoys, PSPs, and their ilk are ubiquitous as is the gotta-have-‘em-all Pokeman-style generation.  Finally, there is something inherently social with the newest console hits, from Rock Band to Wii sports titles, which encourage people to gather around the same screen.  Given huge television sizes, even a twenty-three inch monitor seems tiny.  Even though high-end sound cards have 7.1 surround capabilities, there is something natural about crowding around a large TV and home theater to jam out with friends in Guitar Hero or deliver crushing open-ice hits in NHL 09.  Until the PC moves from the study to the living room — a direction it’s heading in but has done a poor job to date getting to — it will always feel more natural to play alongside friends with a console.  As PC consumers abandon their desktops for laptops, the potential for large gaming desktops to take over the living room diminishes further.   Seeing as how consoles deliver to the kiddie market, become the peripheral leader, and present a more social gaming environment, it’s easy to see why the console market is so much larger.  This doesn’t mean the PC is dead; after all, its small share has grown.

It wasn’t that long ago that the music section dominated retailers like Best Buy.  Huge cardboard displays accompanied overdriven, overloud selections hoping to draw consumers into the racks and racks of compact discs.  Today, the music section is shuttered in a pathetic corner of the store.  The floor space is not much larger than the space reserved for PC games.  Huge stand-up displays have given way to the occasional modest four-color poster.  The cause here is obvious: digital delivery.  The same thing is happening, although to a smaller degree, in PC gaming.  According to MSNBC, in 2006, shrink-wrapped PC game sales actually dropped, while digital delivery accounted for nearly half-a-billion dollars in revenue.  If these numbers are true, roughly half of PC games sold in 2007 were downloaded.  It’s not just gaming, either.  Digital delivery now accounts for the majority of general application sales.  Only large footprint applications, like Microsoft Office and Adobe Creative Suite, are primarily sold through retailers and catalogs.  Many users have also opted for freely downloadable open-source applications.   Considering many utilities, like anti-virus software, applications, and games are now purchased on the internet rather than in a store, it becomes clear that digital delivery has taken a chunk out of the need for retail software space.  

Small form-boxes mean more product in less space and have been appearing on store shelves since 2000.  Originally designed to hold 5-and-one-quarter inch floppies, boxes for PC games used to be a large, unwieldy affair.  It used to be high comedy to bring home a box as big as a box of biscuit mix, to have a lonely, single paper-enveloped CD slide out.  Soon, companies realized the waste: more games could be shipped and displayed in a smaller space if they were sold in smaller boxes.  Unfortunately, this also seemed to mark the last time gamers would be treated to full, in-depth manuals.  It may surprise younger gamers that Falcon 3.0, released in 1991, came with a manual over an inch thick and with a hefty weight.  Flight Simulator X, many times more advanced than Falcon 3.0, comes with a manual that is little more than a pamphlet.  All that considered, a marked drop in floor space didn’t follow the transition to these smaller boxes.  It just doesn’t hold that floor space has shrunk because boxes have. 

There is competition from other areas, now too.  Where home video has always been a force, it is now huge.  For each dollar spent on home video, another dollar is shared between video games, movie tickets, and music.  DVD sections in retailers are huge, taking up a large amount of floor space and drawing large numbers of customers.  While digital delivery has crushed the retail store’s music sales, it hasn’t touched — much — the sales of DVDs.  That tide is turning, though.  Computer manufacturers, like Dell, are now offering computer sales with movies pre-installed.  Faster and faster broadband providers are making it feasible to download high-quality feature-length movies without a long wait.  Netflix offers a streaming video option for a portion of its video library, although the selection isn’t as robust as one would hope.  This pressure may have had an impact on the floor space allocated for PC games, but it’s probably more of a result.  If shrink-wrapped PC games sales were not lowered by other factors, it’s doubtful that DVDs or other products would force them into a smaller space.

The PC gaming market is under siege, but it always has been.  The death of PC gaming has been pronounced many times throughout the years, always seemingly prematurely.  The one thing that may cause the final bell to be rung, though, is PCs themselves.  Computers are becoming smaller and more portable.  Hardware innovation is moving away from gaming and graphics and into portability, wireless connectivity, and efficient power use.  One quick look at the ASUS’ eeePC or Dell’s new Minis shows where computer makers are heading.  In a major way it’s too bad, because some of the most glowing, soulful, immersive games have been created using the PC as a platform: The Sims, World of Warcraft, Half-Life, Doom, Quake, Diablo, StarCraft, and many others come to mind immediately.  As nicely done as new console hits have been, Fallout 3 and BioShock for instance, there is still something disjointed about them.  Somehow, the graphics aren’t quite right and the controls just a bit too awkward to feel lose-yourself smooth — oddly enough, console makers can replicate a Les Paul guitar but not a mouse-keyboard combination. 

Many people have tried to play futurist and proclaimed PC gaming dead.  A billion-dollar industry that embraces change and breaks records year after year isn’t dead; it’s the definition of healthy.  There is still a lot of creativity and innovation in the PC gaming market.  If you like MMO games, it’s the only place to be.  Ultimately, though, whether PC gaming stays healthy or not depends on PC manufacturers.  It’s impossible to have a PC gaming industry without PCs.