How essential is getting an i7 for editing? I've heard it's better but can I survive on an i5. Also at times I want to be recording whilst playing the game at the same time. Is the i5 fine for this or would should I get the i7? Also how much RAM should I get?
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i7 CPU is not essential for editing. Some people actually use dual core CPUs.
i5 should be fine for what you want to do. 8GB of RAM should be plenty.