Distributing Fun

There is no doubting that PC gaming is big business. While it might play second fiddle to the console market in terms of sales, the amounts of money that pass hands per person when it comes to PC gaming is often three-to-four times higher due to component costs.

Indeed, the fact that the latest PC games increasingly require even more advanced hardware means that it is one of the major drivers in the adoption of new and more powerful technologies. And with some components such as super-high-end SLI/Crossfire cards costing upwards of £1,200 alone its no surprise to find that PC gaming retail is the scene of some of the most intense competition between board partners and vendors.

But with so many areas of PC gaming to cover ranging from the core components themselves such as CPUs, graphics cards, RAM, PSUs and HDDs all the way to peripheral technologies including sound cards, physics processing cards and cooling, as well as peripherals themselves, PC Retail decided to speak to the people’s whose business it is to know what the next big thing within the market is going to be – the distributors.

It’s often said that the PC gaming market is one of the fastest moving entertainment sectors and it’s a saying that’s echoed by VIP product manager, Matt Parish: "The PC gaming market is a very exciting area to be involved in at the moment, with innovative products and new technologies pushing the PC platform ahead of rival gaming consoles."

It’s a point that Boston’s channel sales manager, Neil Kalsi broadly agrees with: "With the likes of Microsoft pushing initiatives such as "Games for Windows" and Direct X10 I believe the PC gaming arena is set to regain further market share."

"The current PC Gaming Market is in a exciting stage at the moment, with DX10 technology really coming to the forefront, and Geforce 8 series supporting product benefiting from this upsurge in technology," said XFX Europe’s UK sales manager Gavin Pitt.

Enta’s gaming, barebones and components product manager, Iain Gillogaley also believes that Microsoft’s initiatives within the PC gaming space makes now make it the ideal time to push gaming hardware. "Although data shows a steep year-on-year decline in the value of the PC market over the past decade, the introduction of Windows Vista has seen a growth for the sector. As well as appealing to the hardcore gamers, we believe it will grow the Windows gaming audience.

"The "Games for Windows" initiative is proving to be a success and is being driven very hard from within Microsoft," he added.

"I believe the next generation of consoles are increasingly gaining momentum in terms of market share; however emerging cross platform titles bring interesting opportunities for both console and PC games to enjoy their gaming experiences irrespective of their platform of choice," added Boston.

Realtime’s purchasing director, Julie Darrington also believes that the dynamic nature of the PC industry is one of the reasons why it is possible to continually make good margins on related hardware. "We are seeing the PC gaming market moving from strength to strength," she says. "With more power hungry titles being released everybody is striving to have the latest and greatest technology.

Of course, competing in the PC gaming market is a double-edged sword with extreme levels of competition, extremely well educated buyers and customers who are not only willing to shop around for many weeks and sometimes even months before making a purchase, as well as looking both at price and customer service.

"Retailers who think they can succeed in the gaming market simply by undercutting the competition are in for a surprise," says Parish. "Gamers are investing a lot of their income in their purchases and they need to be confident that the retailer understands their needs and can support them when they are putting their systems together."

It was a point echoed by Kalsi: "Better staff knowledge on products, combined with the careful selection and promotion of leading brands is key. As per any technology-based product, when you are looking to buy you are looking to deal with well-informed staff while buying into the latest technology available from stock."
"Gamers are prepared to pay a premium if you can offer them good service, the latest products and show that you are interacting with the gaming community," added Parish.

And while product knowledge is invariably important, especially when you’re competing with online retailers who more often than not can undercut their High Street rivals thanks to lower overheads and wider range of stock. However, the one place that online rarely manages to compete with brick-and-mortar retailers is customer service.

Even so, that doesn’t mean that retailers should just accept the status quo. "We feel it is vital that retailers offer a complete range of components, from the latest graphics cards from AMD and Nvidia down to specialist accessories including gaming keyboards and mice," says Realtime’s sales manager, Vas Roberts. This is simply because retailers that offer a complete range will be able to maintain higher margins."
Roberts agreed with this statement, confirming: "Retailers should also make sure they stock high-end gaming components that attract higher margins, such as NorthQ PSUs, Corsair gaming memory and Wolfking gaming accessories, which are all available from Realtime and can make retailers up to 30 per cent margin.

Indeed, one of those areas where there is potential for large margins and one that is currently seeing a surge in demand thanks to a fundamental change is graphics. "DirectX 10 has been like a shot to the entire components industry," says Scott Fraser, graphics card brand manager at Spire. "With the latest games now beginning to take advantage of the latest in graphics technology, many gamers are being faced with the choice of either missing out on the entire experience or plumping up the buy a new graphics card. From what we’ve heard from our retail partners, many are going with the latter."

"The difference between older DX9 graphics and DX10 graphics is hugely noticeable," added Pitt. "It only adds to the ultra realism in PC games that gamers have been longing for."

However, it’s not just high-end gamers who want the latest in graphics technologies, be that Crossfire or SLI that are buying new graphics cards as Roberts explained: "Retailers should offer gaming products to all consumers, from hardened gamers to mainstream users." It was echoed by his colleague, Darrington: "With DX10 available for as little as £30 to the end user, the latest gaming titles are available to enthusiasts on all budgets."

One of the other growth areas is memory with DDR3-based RAM modules gradually replacing older DDR and DDR2 sticks. "Because providing the fastest products to the enthusiast community is the number one priority of OCZ memory engineers, DDR3 development has been put into full force in the OCZ labs," explains OCZ’s vice president of technology development, Dr Michael Schutte.