While sales of standard desktop PCs are down, the market for custom gaming machines is stronger than ever. Dominic Sacco speaks to Ben Miles, sales director at system integrator Chillblast, about his views on the shifting sector, quitting the components game and striking a deal with Batman…
“People have been foretelling the demise of the desktop since I’ve been in this business – and it simply doesn’t happen.”
Ben Miles is clearly unfazed when I ask him about the global drop in desktop sales and the fact that vendor giants such as Intel are seeing an even lower than expected demand for traditional PCs.
He’s been at Chillblast for 13 years and describes himself as ‘part of the furniture’, so he’s seen the industry develop substantially in that time.
Having started out writing tech news, he now leads a team of two other purchasers as well as heading up marketing and business development.
“I think the key desktop market is evolving, so new form factors like tablets and convertibles are taking over the traditional entry-level desktop role,” he continues. “So Aunty May who wants to check her Facebook and answer emails can do that on a phone or tablet, and the need for a dedicated desktop for general browsing is no longer there. That whole slice of the entry-level market, which used to be big business, is small fry now.
“But that is a business we have never dabbled in. We’re not interested in selling boxes with one per cent margin at £200.”
What Chillblast is interested in selling, of course, is performance machines for PC gamers and enthusiasts. The online retailer is an expert in this field, having launched back in 2001 as a tech news and reviews website, before importing niche overclocking components to the UK and eventually becoming a fully-fledged system integrator in 2011. And last year was its biggest yet, with unit sales up.
“What we’ve actually seen in our sector is the desktop market growing at the fastest rate that it has since we’ve been incorporated. We’ve also seen our ASP (average selling price) shoot up dramatically in the last 12 months.
“With the new games consoles [Xbox One and PS4], they’ve set the bar pretty much at a GTX 960 level, so you’re looking at an entry-level box of £700 to compete with a console in terms of graphics, which for a business like ours, is fantastic. If you look at the stats on Steam, 80 per cent of the users are running inadequate hardware to play Assassin’s Creed Unity, so it’s a massive market. We reckon it’s £500 million worth of business waiting there to be snapped up.”
Licence to thrill
Other than gaming PCs getting more affordable, what else has been driving this growth? Well, eSports (or competitive gaming) is becoming a real force, with gamers following their favourite pros and watching live streams.
“eSports is a massive area of growth – the industry is expecting eSports to be more popular in terms of viewers than F1 and NFL and NHL combined by 2020. There are millions of people that would rather watch someone else play Minecraft than watch Eastenders; people like us can’t afford to pooh-pooh that as a fad or whatever because it’s anything but. People can see the graphics from a stream and think, ‘Well why can’t my PC do that?’, so it’s a driver of new business for us.”
Chillblast gets hundreds of requests every week from eSports, Twitch and YouTube channels, and while it doesn’t yet sponsor eSports teams as it says it’s hard to measure response on those, it does partner with some of the bigger video channels. It has a deal with Yogscast and produces branded PCs based on the popular UK gaming channel.
Licences are important to Chillblast’s strategy. The firm has teamed up with 20th Century Fox in the past to make co-branded PCs around Rise of the Planet of the Apes, and it’s signed a deal with Warner Bros to bring official Batman PCs to market.
It also partners with independent game developers, including the likes of R8 Games, which is making the spiritual successor to classic racing game Wipeout. Chillblast kits out their entire office and workstations, and in exchange it will appear in the game in the form of a branded racing team and vehicle that players will be able to drive.
Looking at other growth areas, Chillblast is seeing more of its customers turning to small form factors and laptops as technology improves.
“Laptops are one of the strongest areas of growth within our business and that’s really been driven by a massive improvement in the quality of the product,” Miles comments. “On a £1,000 laptop, you can now get 80 per cent of the performance from a £1,000 desktop.
“We also have a small form factor system called the Fusion Nano, which is half the size of the market-leading Bitfenix Prodigy case. The Nano is overclocked, has a quad core chip, i5 or i7, GTX 970, 16GB solid state, and dedicated hybrid. We’re seeing gamers embrace that small form factor.”
While its machines sell well, Chillblast has actually stepped back from individual component sales. Why?
“It’s such a massive business and requires a lot of focus, we don’t want to take our eyes off of our core business to try and compete with the likes of Ebuyer and Dabs,” Miles explains. “They know that business very well; yes we could go out with lower prices but we don’t want to trigger a price war, that doesn’t help anybody.”
From B2C to B2B
Chillblast is proud of its standing in the consumer PC market. It has won PC Pro’s customer satisfaction excellence award for five years in a row, says it has the best Trustpilot rating for an SI and has racked up a total of 15 ‘best PC brand’ awards across the board.
Miles tells PCR: “Customer service is incredibly important, it underpins everything we do as a business. We know reputations can be very hard to earn and easy to lose. If something is not right, as a company we try and move heaven and earth to make it right and make sure the customer walks away having had not just a good experience, but an exceptional experience. Our aim is customer delight, not just customer satisfaction. We’re aiming to be the most customer service-centric SI, but we’re also not afraid to break the mould of the normal black gaming box.”
It’s not just the consumer market that Chillblast has its sights set on. Like other PC retailers, it is targeting the B2B market with servers, networking, workstations and support.
Miles says: “We’re still aiming to have strong double-digit growth this year in our B2B sector. We actually have some pretty massive B2B customers – some of the biggest corporations in the world are powered by Chillblast at the top level.
“We’ll continue to seek additional industry accreditation, with a view to expanding our B2B horizons. Last year we became ISO 9001:2004 certified.”
Looking ahead, to say it’s an exciting time to be in the PC gaming industry is a bit of an understatement. Steam Machines are around the corner, AMD has a new high-end graphics card to challenge Nvidia and PCI Express SSDs promise better performance to name a few. While it’s excited by all of those things, Chillblast is most looking forwards to Windows 10 and the impressive new API it brings: DirectX 12.
“Windows 10 is going to be a big game-changer,” Miles adds. “Microsoft is back on form and Windows 10 has been overwhelmingly positively received.
“DirectX 12 is a much lighter API for gaming, so it’s going to increase the performance on existing hardware and open up so much more opportunity for the PC to distance itself from other gaming platforms, in terms of graphics quality. Games developers will use the extra horse power available to improve special effects and graphics to drive ever higher quality, so that’s exciting.
“In terms of AMD and Nvidia, the market is showing people want quiet and power efficient – not just brute force performance anymore. And that is what AMD will rectify with its imminent 300-Series release. Saying that, I think unquestionably it will be Nvidia’s year.”
So what of the future? What’s next for Chillblast – and the competitive market its in?
Miles concludes: “The days of making massive margins in PC hardware have long since gone. Our systems are not your usual black gaming boxes with flashing lights and coloured LED fans. It’s been done to death – people are bored of that. We feel the key is to differentiate yourself with quality of service and innovative products that are unique in the market.
“That’s where we aim to come out on the other side of a challenging market, ahead of the game.”