The past holiday season saw a focus on the launch of PlayStation 5 and the new Xbox systems. However, some of the biggest news was the explosion of sales for PC games. DFC Intelligence just released its latest PC game forecasts showing that 2020 revenue for PC games reached over $36 billion. More importantly, this is not expected to be a temporary increase.
DFC Intelligence forecasts that soaring PC hardware sales will result in continued growth for PC game software over the next five years. Of course, this is similar to what occurs in the console market. Initial sales for PlayStation 5 games are limited, but the high demand for hardware is an indication that it will be a popular system for years to come.
There are many signs that consumer spending on PC systems that can play high-end games is reaching a new high. On February 24, Nvidia announced its results for the fiscal year ending January 31, 2021. Revenue soared 53% over the previous year to $16.7 billion.
Nvidia focuses on driving computer graphics for many markets, but PC gaming is one of its leading segments. However, Nvidia’s gaming segment was the best performer. Full year revenue for the gaming division reached $7.76 billion, up 41%. Even more impressive, 4th quarter revenue for gaming was up 67% to $2.5 billion.
The market valuation for Nvidia is now well above the COMBINED value of Sony and Nintendo. With a laser focus on gaming, Nvidia’s market value is also well above leading semiconductor manufacturer Intel.
Focusing on game consumers has also been the secret to success for Corsair, now Corsair Gaming. Corsair Gaming had an IPO in September 2020 and its stock had tripled by early 2021. Corsair specializes in components for high-end PCs. Consumers wishing to build custom game systems are a prime customer for Corsair.
In 2020, Corsair Gaming revenue increased 55% to $1.7 billion. Like Nvidia, the biggest increase was in the last quarter of the year. Corsair revenue soared 70% year-over-year in the fourth quarter.
There are many observers questioning whether increased spending on games during stay-at-home orders will be permanent. This increase in spending on the hardware necessary to play games will clearly start to translate into increased spending on PC game software. DFC believes that the COVID crisis simply accelerated what was already growing demand.