Are PCs holding back the console experience? (Witcher3 spawn)

[pjbliverpool]

Some more interesting info about the PC industry here, including the breakdown of that between F2P, MMO/MOBA and traditional single player games:

http://www.cnet.com/uk/news/playing-games-on-the-pc-is-making-a-comeback/
http://www.newzoo.com/insights/pcmmo-gaming-revenues-total-24-4bn-2014/#UL5VeLEBwX0zmlGf.99

If I'm understanding this correctly, the total PC games market (excluding casual browser and social network based games) is currently about even with the total console market (all 6 home consoles but likely excluding handhelds). However only 30% of that is made up of non MMO/MOBA games - that 30% would presumably be the traditional single player type games that we see on consoles and total to just over $8BN. A small part of that figure is made up of F2P games - specifically $1.85BN (with the rest of the F2P market making up 80% of the MMO/MOBA market). So that leaves $6.2BN for non MMO/MOBA, non F2P games (and it excludes casual browser based games as well). So that seems like a fairly reasonable figure to compare against the console market revenues and amounts to around 25% of the total console 2014 software revenues.

Or put another way, if you take the total console market, plus the portion of the PC market that is comparable to console games (a total of 7 separate platforms), the PC makes up 1/5th of all revenue.

Incidentally, my working above excludes MMO/MOBA games that would also appear on consoles from the PC figure. So for example the BF series, and possibly even CoD series (and similar) would contribute to the console percentage but not the PC percentage. That could falsely skew the numbers above in favour of the consoles.

 

[pjbliverpool]

Some good news on the PC hardware sales front. According to Jon Peddie Research the PC gaming hardware market is still growing steadily year on year and is now worth more than double that of the console hardware market:

http://jonpeddie.com/publications/pc_gaming_hardware_market_report

 

[Davros]

And the Geek shall inherit the Earth

 

[Shifty Geezer]

The PC gaming hardware market is...now worth more than double that of the console hardware market:

That doesn't mean squat, really. PC hardware costs more than consoles that get crazy cheap. Form a software POV, it's software sales that matter. When the PC software market is equivalent/greater than consoles, then PC can be targeted by big-ticket titles that max the platform.

 

[pjbliverpool]

That doesn't mean squat, really. PC hardware costs more than consoles that get crazy cheap.

True, bigger margins, more profit.

Form a software POV, it's software sales that matter. When the PC software market is equivalent/greater than consoles, then PC can be targeted by big-ticket titles that max the platform.

Indeed. See my last but one post. It's pretty much in that ballbark already it seems. You've got to wonder how many exclusives the PC could support if it had a first party studio championing it like Sony and Microsoft.

 

[Deleted member 11852]

True, bigger margins, more profit.

Not sure who in the PC industry is making more profits with big margins but it's not PC manufacturers. Nvidia are doing ok and although profits and stock are down again and the same is true for Intel. However AMD are just plodding along which isn't great. Less competition in the GPU space would be awful. If you look at the total numbers of the PC market there is a lot of money swirling around but too many people are fighting for it on razor thin margins. A few companies dropping out would mean more to go around for everybody.

Indeed. See my last but one post. It's pretty much in that ballbark already it seems. You've got to wonder how many exclusives the PC could support if it had a first party studio championing it like Sony and Microsoft.

Blizzard are as close as you come to the eponymous PC first party studio. Consoles are a secondary consideration for them and hopefully they stay that way. I don't want StarCraft III to do compromised to accommodate controller play.

 

[AlNom]

Valve.

 

[BRiT]

Valve.

Yup, its easier to make big profits when you take 30% of what others make with no work on your part. Then there's the nearly 100% profit on eHats.

 

[pjbliverpool]

Not sure who in the PC industry is making more profits with big margins but it's not PC manufacturers. Nvidia are doing ok and although profits and stock are down again and the [URL='http://www.wsj.com/articles/intel-profit-declines-as-revenue-falls-1436990887']same is true for Intel.[/URL]

That Nvidia article is from back in June. Nvidia stock has been rising on average over the last few years and is currently very healthy:

https://uk.finance.yahoo.com/echarts?s=NVDA#symbol=NVDA;range=5y

Ditto Intel:

http://finance.yahoo.com/echarts?s=INTC+Interactive#{"range":"1d","allowChartStacking":true}

Also both Intels (~60%) and Nvidia's (~50%) gross profit margins dwarf those of Sony's (~30%), although Microsoft beats them all currently on ~66%. Obviously those aren't all attributable to gaming hardware for any company though so tell us very little.

 

[Deleted member 11852]

That Nvidia article is from back in June. Nvidia stock has been rising on average over the last few years and is currently very healthy:

The article is analysis on Nvidia's Q1 2016 quarterly report published in May, Nvidia's most recently published report is from August (Nvidia Q2 2016) and shows the exact same trending. Revenue is up, gross margins are down. If you look back ten years you can see Nvidia's gross profits projecting upwards almost consistently until the last 8 quarters where gross profits no longer track to increasing revenue which is indicative of either unmanageable costs or narrowing margins so their gross profit is at a platuea:

I think this is more likely a result of their low-end market drying up. I recall for years that Apple, Dell and HP used low-end Nvidia parts in their laptops. My PowerBook G4 12" had a Go5200 and in later years you'd see 7400M, 8400M and 9400M discrete GPUs in cheaper laptops but for a while now it's been Intel 3000/4000/5000HD-series parts or Iris/IrisPro.

Ditto Intel:

And I said Intel are doing fine, here is their last 10 years of net income:

Also both Intels (~60%) and Nvidia's (~50%) gross profit margins dwarf those of Sony's (~30%), although Microsoft beats them all currently on ~66%. Obviously those aren't all attributable to gaming hardware for any company though so tell us very little.

You can't compare gross income of companies like Intel and Nvidia, who have been in sustained to growth for a decade and operate in markets with virtually no competition, to a company like Sony which doesn't operate in markets like this and has just ended five years of financial hell due to restructuring. Being successful yesterday doesn't guarantee being successful tomorrow. Things change. Isn't it interesting how Intel hasn't had any real growth since 2010, which is the year year ARM-based tablets and larger phones started to appear?

The financial reports of 2010 onward make interesting reading. Maybe a coincidence but this shows a sudden increase in infrastructure and plant costs. For many years these costs had been around $5Bn/year then they double to $10Bn a year and have stayed at that level (which clearly wasn't enough to maintain Intel's legendary tick-tock development cycle) ever since.

And revenue seems to have plateaued over the past few years, although profitability is good - presumably because AMD aren't really competing in the processor space.

Sorry, didn't mean to turn this into a financial spread. The bottom line is neither Intel or Nvidia seemingly have any real growth unless AMD disappear in which case they'll likely capture those segments of the processor and GPU market by default.

 

[pharma]

PC Gaming Hardware Market Is Strong and Healthy

Despite all the negative rumors on PC sales it seems that the PC gaming market is doing well, as according to the latest reports there was 21.5 billion in hardware sales last year. That's more than double the revenues derived from console sales.

Ted Pollak, Senior Gaming Analyst at JR notes that the $21.5 billion market is over twice the size of the console gaming hardware market. “We continue to see a shift in casual console customers moving to mobile.

http://www.guru3d.com/news-story/pc-gaming-hardware-market-is-strong-and-healthy.html

 

[Deleted member 11852]

PC Gaming Hardware Market Is Strong and Healthy

The article is based on the same source as pjbliverpool's post: Ted Pollak at JR.

 

[pjbliverpool]

You can't compare gross income of companies like Intel and Nvidia, who have been in sustained to growth for a decade and operate in markets with virtually no competition, to a company like Sony

I'm not really trying to compare them directly, I was just pointing out that both Nvidia and Intel are doing pretty well. It's not really relevant to the topic anyway since one can't look at Intels performance as a whole and gauge how strong gaming hardware related sales are from that. It's easier in Nvidia's case but even they're not 100% gaming hardware orientated.

I expect JR's figures include sales from all kinds of companies ranging from the likes of Alienware/Dell selling pre-built gaming desktops and laptops to peripheral vendors to the core hardware manufacturers like AMD/Nvidia. Perhaps even monitor vendors are included too. It would certainly be interesting to understand how they draw a distinction between PC gaming hardware and regular PC hardware.

I'm not seeing any reason so far to doubt JR's conclusions in this matter though.

 

[Deleted member 11852]

I'm not really trying to compare them directly, I was just pointing out that both Nvidia and Intel are doing pretty well.

I agree, that's why I called out Intel and Nvidia in my post. However, the PC industry en masse is a bit like the mobile phone industry and the game software industry which have a lot of players but the biggest profits are disproportionately split between a small number of big players.