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Old 25th April 2005, 18:17   #1
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Default Gaming PCs head for mainstream

By Rex Crum, MarketWatch
Last Update: 3:34 PM ET Apr 23, 2005

SAN FRANCISCO (MarketWatch) -- When video game player Matt Cerny describes one of his computers, he speaks in the same exuberant language that an auto enthusiast might use for a tricked-out muscle car.

"It has an AMD 2400 2-gigahertz processor, 1 gigabyte of RAM and a 256-megabyte ATI video graphics card," said Cerny, a technician with Geek Squad, a computer support and services shop in Dallas.

The translation for Cerny's geekspeak? His machine is one fast mother.

The PCs used by Cerny, 27, and other gamers aren't built for word processing or sending e-mail. They're also not the kind consumers can easily spot browsing through a Sunday newspaper supplement or a big-box electronics store.

These systems often come in odd colors such as "cyborg green" and "conspiracy blue," and with high price tags: A custom-built model can cost $5,000.

Still, the market for these costly, powerful machines -- now dominated by small private firms with names like Alienware and Voodoo Computer -- has gotten the attention of large PC makers like Dell Inc. (DELL) and Gateway Inc. (GTW)

"Dell has recently become a company to watch," said Rob Enderle, president of the Enderle Group, a technology industry research firm. "They purposely designed some new computers for the gaming market."

While PC companies are always trying to expand their customer base, they're not really making a market share play by building machines that aren't appealing to most buyers. Because of their prices, such souped-up computers appeal only to a small segment of users.

One of the main motivations for PC makers is that it gives them a way to test their technology.

"Games are a real benchmark for high-performance PCs," said Ketan Pandya, marketing manager for Dell's Dimension products.

To begin to understand how Dell might profit from a market that is the antithesis of its broad consumer focus, think of the benefit to Ford or Chevrolet when one of its cars wins a Nascar race.

Consumers like Cerny, who prefer processors made by Advanced Micro Devices (AMD) to those made by its larger rival, Intel Corp. (INTC), push PCs to their ultimate performance limits as they play games such as "Doom 3," "Half-Life 2" and "Counter-Strike."

With the growth of the video gaming business, they could be the leading edge of a much bigger market.

"The customers who are into gaming are, obviously, the early [technology] adopters," said Brian Joyce, director of marketing at Miami-based Alienware.

Just as Dell and others are trying to reach gamers, small companies like Joyce's are trying to broaden the reach of their machines. "Much of what we create competes with the major [computer] guys, so we're trying to appeal to the home and office folks," he added.

While gaming PC firms are relatively small in the scheme of the PC market -- Joyce estimates Alienware will do $150 million in revenue this year, compared with Dell Inc.'s annual revenue of about $50 billion -- the impact of the high-end gaming machine on the computer market is evident in releases from the likes of Dell and Gateway.

Those big companies are taking pains to present their machines as more than for games.

"We think the ability to have a great gaming experience out of the box is important, but these computers are also great for everything else you'd want to do," said Marc Demars, Gateway's senior director of desktop PCs.

Gateway recently added to its gaming PC line with the 7426GX notebook that runs on Advanced Micro Devices' (AMD) Athlon 64 3700+ processor and costs $1,550. Gateway also moved to drive down the cost of gaming PCs even further with its new eMachines T6212 computer that costs $580 and runs on AMD's Athlon 64 3200+ processor. Both systems also come with ATI Technologies' Radeon graphics processors.

Dell touts its entries into the gaming arena, the $2,999 Dimension XPS desktop, which can carry up to 4 gigabytes of memory and runs graphics processors from either Nvidia Corp. (NVDA) or ATI Technologies (ATYT), as well as its $2,337 Inspiron XPS notebook, which can potentially have 2 gigabytes of memory.

"We also see these as much more than gaming PCs," said Dell's Pandya.

With such discrepancies in prices and the varied technology inside the case, there's a growing a debate over what really makes a computer a "gaming PC." The definitions and versions of such computers can vary as widely as the systems themselves.

NexTag Inc., a San Mateo, Calif.-based comparison-shopping company, ranks what it calls the "most popular" computers based on a combination of sales and sales leads from reports by its several thousand merchant partners. For NexTag's purposes, a gaming PC has to have a processor speed of at least 3 gigahertz, a minimum of 512 megabytes of RAM and a high-end graphics card, such as those from Nvidia and ATI.

Garth Chouteau, public relations director for NexTag, said that based on the company's criteria, Dell's Dimension XPS machines are the first and fifth most-popular gaming PCs. However, Apple Computer's (AAPL) Power Mac and iMac G5 systems claimed the No. 2, 3 and 4 spots, but Apple doesn't even market those machines as gaming computers.

Industry analysts say branding is what gaming PCs are really all about. How a high-end video game runs on a box is considered an accepted gauge of a computer's performance. By pumping what's under the hood, and demonstrating how well that computer can play a game such as "Doom 3," PC makers can show off their wares and stoke demand for their more-powerful machines.

"It's more of a marketing ploy than anything else," said Brooks Gray, an analyst with Technology Business Research. "The gaming market is relatively small, but PC vendors are trying to capture more of it because they see it as expanding their home entertainment presence."

However, the attempts of the hardware behemoths to carve out a piece of the gaming PC market don't appear to be dissuading the specialty firms from what they see as their mission, driven by pride in providing a one-of-a-kind product.

"I don't buy that a $600 machine is a gaming PC," said Alienware's Joyce. "It's just not nearly as good as what we do. Everybody has something they're willing to pay a premium for, and for most of our clients, that's gaming."

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Old 25th April 2005, 18:22   #2
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Interesting how the business world looks at Gamers

1) Most gamers don't buy a ready made PC; it's not COOL.
2) Gamers don't want to rely on services provided by a Company; it is definitely not COOL.
3) Gamers want to tweak a bit too - Dell and Alienware are not COOL.

Okay, we still have the "busy" geeks carrying a power notebook which may be "acceptable" by some.
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Old 25th April 2005, 20:41   #3
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interesting read!
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