PC Gaming Hardware Exploded to $5.74 Billion in 2021

By Aaron Klotz
last updated

PC Gaming hardware is one of the most profitable markets in the world

PC Gaming
(Image credit: Shutterstock)

According to a report by the NPD Group, the PC gaming hardware and accessories market skyrocketed during 2021, in no small part due to the COVID-19 pandemic. This has allowed the PC hardware and accessories industry to reach a stellar $5.74 billion dollars in value for the whole year.

Most of the revenue was generated by desktop computers, laptops, and PC microphones, increasing by 38%, 29%, and 25%, respectively, during 2021. Pure sales volume growth was driven by PC microphones, monitors, and laptops by up to 27%, 17, and 16%, respectively. 

Overall, this gives the industry a 25% gain in revenue in 2021 over 2020. While impressive, this was down from 2020's uncharacteristic gain of 62% in revenue compared to 2019. The changes in the market make a lot of sense in light of the pandemic, along with requirements to work and play from home. More people now than ever before are using computers for entertainment, hanging out socially, and work.

PC gaming also saw significant gains in 2021, with digital PC content bumping up an additional 5% in revenue last year for a total of $7.9 billion. This was also assisted by increased average playtime of PC gamers, which was recorded at 7.7 hours per week, a 1-hour increase over 2020.

However, due to both 2020 and 2021's rapid growth in the PC market space, NPD predicts 2022 will be the first year we'll see a decline in sales and revenue (by around 4%). Of course, this won't solve any shortages, but we're at the beginning of a new road that we hope leads to normalized supply and demand.

Aaron Klotz
Aaron Klotz
Freelance News Writer

Aaron Klotz is a freelance writer for Tom’s Hardware US, covering news topics related to computer hardware such as CPUs, and graphics cards.

Topics
Gaming
9 Comments Comment from the forums
  • Endymio
    This article underscores a point I repeatedly make: even with this 25% increase in PC gaming hardware sales, the amount spent on GPUs by actual gamers is less than $1B/year. NVidia and AMD wouldn't get allotments on latest-generation fabs with a market that small, nor be able to devote the engineers necessary to develop new chips in a timely manner. By expanding their market to datacenters, AI research, and yes, even crypto-miners, they've quadrupled their revenue ... which means better, faster GPUs for all.
    Reply
  • TJ Hooker
    Endymio said:
    This article underscores a point I repeatedly make: even with this 25% increase in PC gaming hardware sales, the amount spent on GPUs by actual gamers is less than $1B/year. NVidia and AMD wouldn't get allotments on latest-generation fabs with a market that small, nor be able to devote the engineers necessary to develop new chips in a timely manner. By expanding their market to datacenters, AI research, and yes, even crypto-miners, they've quadrupled their revenue ... which means better, faster GPUs for all.
    Where have you seen figures for total GPU revenue specifically for gamers? And when you say they they've quadrupled their revenue, when are you comparing that to (and are you referring to GPU revenue only)?
    Reply
  • Endymio
    TJ Hooker said:
    Where have you seen figures for total GPU revenue specifically for gamers?
    By this article, all PC gaming hardware combined is $5.7B. Assuming generously that a full 25% of that was spent on graphics cards, that puts the total cost of the GPUs within those graphics card at well under $1B.

    And when you say they they've quadrupled their revenue, when are you comparing that to (and are you referring to GPU revenue only)?
    I am again using generous estimates, of NVidia achieving only half its revenue from Ampere/data center, and only half of NVidia's GeForce revenue from mining. We know specifically from NVidia the first estimate is artificially low. The second estimate NVidia provides no direct guidance on, but it's almost certainly low as well.
    Reply
  • TheOtherOne
    Nothing to do with overpriced components, mainly GPUs and CPUs tho. And yes, a LOT of those "gaming" rigs are actually just "mining" rigs. :ptdr:
    Reply
  • spongiemaster
    Endymio said:
    This article underscores a point I repeatedly make: even with this 25% increase in PC gaming hardware sales, the amount spent on GPUs by actual gamers is less than $1B/year. NVidia and AMD wouldn't get allotments on latest-generation fabs with a market that small, nor be able to devote the engineers necessary to develop new chips in a timely manner. By expanding their market to datacenters, AI research, and yes, even crypto-miners, they've quadrupled their revenue ... which means better, faster GPUs for all.
    Nvidia's gaming division generated $3.22 Billion in their last quarterly report. They're looking at over $12 billion for the previous fiscal year when q4 is reported. Clearly, retail GPU's are not getting tracked as gaming hardware in this report. Not a single mention of them in the article is inconceivable considering how crazy the market has been if they were actually tracked by this report. They're focusing on microphones and monitors over GPU's? Doubt it.
    Reply
  • Endymio
    spongiemaster said:
    Nvidia's gaming division generated $3.22 Billion in their last quarterly report.
    Yes, a year-over increase of 42%, an enormous increase, especially as NVidia is not capturing the price differential between MSRP and actual sale price of graphics cards.

    spongiemaster said:
    Clearly, retail GPU's are not getting tracked as gaming hardware in this report.
    My assumption was that the report is tracking such, and the discrepancy in the two figures is due to NVidia's "gaming" division reporting sales for gaming and mining both.
    Reply
  • russell_john
    Admin said:
    In 2021, the PC gaming market became 25% more profitable compared to 2020. Driven mostly by gaming PCs, laptops, and microphone sales.

    PC Gaming Revenue Exploded to $5.74 Billion in 2021 : Read more

    And this is why Sony will either start releasing games on PC or die a slow death as they leave billions on the table for all the others and especially Microsoft to snatch up .....

    Once the chip shortages abate later this year the PC Market will really explode
    Reply
  • TJ Hooker
    According to Jon Peddie Research, the PC gaming hardware market was already $22B in 2020, and was expected to be ~$33B in 2021. https://www.tomshardware.com/news/pc-gaming-hardware-market-recovering-supply-improving-mid-2021
    Given that NPD is reporting only $5.7B for 2021, they must be omitting a pretty big category (or categories) that would otherwise be considered "gaming hardware".
    Reply
  • TerryLaze
    russell_john said:
    Once the chip shortages abate later this year the PC Market will really explode
    The chip shortages are part (or even mainly) due to human malware and so are the much higher sales in gaming, people saved a lot of money by not being able to leave home and dropped it into entertainment, for obvious reasons.
    When chip shortages stop is also when increased sales will stop.

    Or at least that's an just as likely possibility.
    Reply