$550 gaming rig?

PCPartPicker part list: http://pcpartpicker.com/p/7g4WK8
Price breakdown by merchant: http://pcpartpicker.com/p/7g4WK8/by_merchant/

CPU: Intel Core i5-4590 3.3GHz Quad-Core Processor ($159.99 @ Micro Center)
CPU Cooler: Cooler Master Hyper 212 EVO 82.9 CFM Sleeve Bearing CPU Cooler ($28.98 @ OutletPC)
Motherboard: MSI Z97-GAMING 5 ATX LGA1150 Motherboard ($146.99 @ Amazon)
Memory: G.Skill Ares Series 8GB (2 x 4GB) DDR3-2133 Memory ($79.99 @ Newegg)
Storage: Seagate Barracuda ES 1TB 3.5" 7200RPM Internal Hard Drive ($49.49 @ Amazon)
Case: Corsair 300R ATX Mid Tower Case ($59.99 @ NCIX US)
Power Supply: XFX Core Edition 750W 80+ Bronze Certified ATX Power Supply ($71.24)
Optical Drive: Samsung SH-224DB/BEBE DVD/CD Writer ($14.99 @ Newegg)
Operating System: Microsoft Windows 8.1 - 64-bit (OEM) (64-bit) ($90.26 @ OutletPC)
Total: $701.92
Prices include shipping, taxes, and discounts when available
Generated by PCPartPicker 2014-10-22 20:55 EDT-0400

dell and hp pc use cheaper parts to keep the cost down they also use small cases and under size power supply. it not hard to build your own pc most cables and the cpu now are all keyed. they only go in one way.

This is beyond is budget and you didn't include a Graphics card.

some kits from newegg.
http://www.newegg.com/Product/ComboBundleDetails.aspx?ItemList=Combo.1752931
has apu so it has built in video card for entry level gaming. can when you have more funds to add a video card.
http://www.newegg.com/Product/ComboBundleDetails.aspx?ItemList=Combo.1652101
a faster pc with some blink just missing a good video card.
http://www.newegg.com/Product/ComboBundleDetails.aspx?ItemList=Combo.1763591
http://www.newegg.com/Product/ComboBundleDetails.aspx?ItemList=Combo.1624227
30.00 over but has an 8 core amd cpu.

http://www.newegg.com/Product/ComboBundleDetails.aspx?ItemList=Combo.1903331
here good deal with a gpu that 20.00 over.

just showing him what a build cost would be for a good system with new parts. with newegg or others you have to be carefull of the parts used some are good and other are cheap.

Pros and Cons of bulding your own PC
http://www.cnet.com/how-to/the-pros-and-cons-of-building-your-own-computer/

Build your own for your price range
(http://pcpartpicker.com/p/QZChYJ)

Intel Pentium G3258 3.2GHz Dual-Core Processor http://pcpartpicker.com/part/intel-cpu-bx80646g3258 $69.99 @ Amazon
Cooler Master Hyper TX3 54.8 CFM Sleeve Bearing CPU Cooler http://pcpartpicker.com/part/cooler-master-cpu-cooler-rr910htx3g1 $16.98 @ Newegg
ASRock H81M-HDS Micro ATX LGA1150 Motherboard http://pcpartpicker.com/part/asrock-motherboard-h81mhds $49.99 @ Micro Center
G.Skill Ripjaws X Series 8GB (2 x 4GB) DDR3-1600 Memory http://pcpartpicker.com/part/gskill-memory-f312800cl9d8gbxl $70.99 @ Newegg
Western Digital Caviar Blue 1TB 3.5" 7200RPM Internal Hard Drive http://pcpartpicker.com/part/western-digital-internal-hard-drive-wd10ezex $54.98 @ OutletPC
XFX Radeon R7 265 2GB Video Card](http://pcpartpicker.com/part/xfx-video-card-r7265acnf4 $134.99 @ Newegg
NZXT Source 210 (Black) ATX Mid Tower Case](http://pcpartpicker.com/part/nzxt-case-s210001 $29.99 @ Newegg
Antec Neo Eco 620W 80+ Bronze Certified ATX Power Supply](http://pcpartpicker.com/part/antec-power-supply-neoeco620c $34.99 @ Newegg
Samsung SH-224DB/BEBE DVD/CD Writer](http://pcpartpicker.com/part/samsung-optical-drive-sh224dbbebe $14.99 @ Newegg
Win 7 Pro $55.00 http://www.sidemicro.com/brands/Microsoft.html

Base Total: $605.90
Promo Discounts: -$5.00
Mail-in Rebates: -$70.00
Shipping: $1.99
Total: $532.89

Pros:
Plenty of upgrade potential
Overclocked G3258 are very nice in gaming
R7 265 is a little better than a 750TI and R7 260X that normally goes into this price range.

Cons
Lack of SSD not the end of the world but it would be nice to have.
$55 for Win 7 key not the CD which is very easy to get. You could spend the extra cash and get Winblows 8 yes they are a Licensed Microsuck dealer.

Pre Built Example
http://www.centauruscomputers.com/html/hydra.html $499

AMD A6-6400K 4.1GHz* X2
Stock AMD CPU Cooler
4GB DDR3 1600MHz RAM
HDD 500GB SATA-III WD
AMD Radeon HD 8470D APU
AMD FM2 Motherboard
24x DVD+-RW recorder SATA
DIY FM08 Case
Windows 7 / 8.1 64bit

http://www.centauruscomputers.com/html/apollo.html $589
G3220 Haswell CPU 3.0GHz
Intel Stock Cooler 80mm
4GB DDR3 1333MHz RAM
WD Caviar Blue 500GB HDD
GeForce GT 730 2GB DDR3
Intel H81 Motherboard
24x DVD+-RW recorder
Antec VSK3000 Case
Windows 7 / 8.1 64bit

Compare the 3 in Performance and you will see what I built will blow the both of these out of the water, why? Because there is no profit margin to deal with. What do you sacrifice in gaming terms with Win 7 vs Win 8, actually very little 10% at best which is rare. I prefer Win 7 as Win 8 is one of the most annoying things I have ever looked at, I beta tested win 8 and quickly deleted it.

Here buddy.

You will notice the it is overbudget but take note that it is crossfire.
Just remove the additional GPU and crossfire it later.

PCPartPicker part list / Price breakdown by merchant

CPU: Intel Pentium G3258 3.2GHz Dual-Core Processor ($69.99 @ Amazon)
Motherboard: ASRock B85M Micro ATX LGA1150 Motherboard ($66.98 @ Newegg)
Memory: Apotop 8GB (2 x 4GB) DDR3-1600 Memory ($65.70 @ Newegg)
Storage: Seagate Barracuda 1TB 3.5" 7200RPM Internal Hard Drive ($53.98 @ OutletPC)
Video Card: Sapphire Radeon R9 270 2GB Dual-X Video Card (2-Way CrossFire) ($168.98 @ Newegg)
Video Card: Sapphire Radeon R9 270 2GB Dual-X Video Card (2-Way CrossFire) ($168.98 @ Newegg)
Case: Antec VSK-3000 MicroATX Mid Tower Case ($29.99 @ Newegg)
Power Supply: EVGA SuperNOVA NEX 750W 80+ Bronze Certified Semi-Modular ATX Power Supply ($44.99 @ NCIX US)
Total: $669.59
Prices include shipping, taxes, and discounts when available
Generated by PCPartPicker 2014-10-22 22:30 EDT-0400

Including an OS for a $550 PC wont get you much. I would look at a build like this.

PCPartPicker part list / Price breakdown by merchant

CPU: Intel Pentium G3258 3.2GHz Dual-Core Processor ($59.99 @ Micro Center)
Motherboard: ASRock H97M Anniversary Micro ATX LGA1150 Motherboard ($65.38 @ Newegg)
Memory: Mushkin Blackline 8GB (2 x 4GB) DDR3-1600 Memory ($68.99 @ Newegg)
Storage: Seagate Barracuda 1TB 3.5" 7200RPM Internal Hard Drive ($53.98 @ OutletPC)
Video Card: Sapphire Radeon R9 270 2GB Dual-X Video Card ($168.98 @ Newegg)
Case: Corsair 300R ATX Mid Tower Case ($59.99 @ NCIX US)
Power Supply: EVGA SuperNOVA NEX 750W 80+ Bronze Certified Semi-Modular ATX Power Supply ($44.99 @ NCIX US)
Total: $522.30
Prices include shipping, taxes, and discounts when available
Generated by PCPartPicker 2014-10-22 23:29 EDT-0400

the case is just personal preference. You can change it if you like.

Your way under estimating what $550 will buy. It will get you a PC that will run any game at High to Ultra @1080 on a 60hz display which is what most people run at. There are still plenty of gamers that are okay with 1680X1050 which still looks great. You forgot the OS and Optical Drive, not that important unless he wants to do everything with a portable or Flash drive off another PC.

http://pcpartpicker.com/p/QZChYJ This is everything he would need including the OS for $10 more than your build.

i wouldn't recommend buying windows 7 when we all know windows 8.1 performs a lot better. He can also add a cd drive if it wants.
You can find windows 8 keys here for little as $20. (where i got mines)
https://www.g2a.com/