PC makers battle for gamers
Dell, HP move in on boutique PC makers' territory.
March 19, 2004: 1:57 PM EST
NEW YORK (CNN/Money) – Big computer companies are starting to realize what their boutique competitors have known for years. If you want to boost profits in the PC marketplace, target gamers.
Dell's the latest company to turn its attentions this way, introducing a powerful new laptop last month specifically made for gaming enthusiasts. The Inspiron XPS runs anywhere from $2,849 to nearly $5,900. Hewlett-Packard and Gateway also offer machines specifically tailored to gamers.
It's an expensive machine, but the XPS offers a bit more than a standard Dell laptop. It's fueled by CPUs ranging from a Pentium 4 3.4 Ghz chip to the Pentium 4 Extreme Edition microprocessor (the fastest chip Intel makes). Standard Dell laptops feature nothing faster than a 2.8 Ghz chip. XPS machines also tart at 512MB of RAM, with the option to upgrade up to 2 GB. 256MB is the typical standard (with upgrades of up to 1GB available). And, naturally, the XPS comes with a state of the art 3D graphics card - which you won't find on standard Dell laptops.
Dell's XPS line.
"Gamers and enthusiasts provide a halo effect," said Dell spokesperson Venancio Figueroa. "A lot of their friends and relatives depend on them for advice. We like to think if they have a good experience with us, that will have a spillover effect."
While the big boys are just coming around to courting enthusiasts (and the higher profit margins that come with them), a trio of smaller companies has focused on hardcore gamers for years.
The names VoodooPC, Alienware and Falcon Northwest might not ring bells with the general public, but in the gaming industry, they're spoken of in near-reverential tones. Charging anywhere from $2,000 to $5,000 per machine, these companies have established solid reputations as makers of reliable, bleeding edge desktops and laptops.
In a world where quite competent PCs routinely sell for $500 or less, it might sound like madness to price a machine that high. But gamers have been driving the PC hardware business for years, pushing for newer, faster and more spectacular equipment. And they're willing to pay top dollar for it.
VoodooPC realized this roughly three years ago. After nine years of being a small, but profitable, retailer, the company decided to focus on the high-end gaming market.
"We thought since our core competency was hardware, let's concentrate on that. Instead of competing on price, let's build a Ferrari," said Ravi Sood, CEO of VoodooPC.
It paid off. The company has since tripled its staff and seen revenues soar. (Sood would not disclose financial numbers.)
Alienware's Area-51
The story's much the same at Alienware. The eight-year old boutique computer maker had sales in the "$100 million range" last year and it appears sales are tracking even higher this year, said Brian Joyce, the company's marketing director.
Both Sood and Joyce told me they weren't surprised to see big mass market players, such as Dell, enter the gaming PC business – but both wonder how much of an impact these companies will have.
"Gamers, in general, are kind of suspicious of corporations," notes Joyce. "They're very suspicious of these large mass market brands. ... It'll be interesting to see if Dell can cater to that niche in the way they're used to being catered to."
Figueroa would not break out sales numbers, but did note that the success of the desktop XPS line (introduced last April) prompted the company to introduce the gamer laptop last month.
There's also the DIY option. Click above for my experiences in building a PC from scratch.
Being on the bleeding edge is expensive, naturally. That's why many cash-strapped gamers opt to build their own PCs. Doing it themselves increases flexibility – and allows them to decide which components are important.
Building a computer used to be nearly impossible for a layperson. Component documentation was dense with technobabble, assuming there was any at all. In recent years, the process has gotten much easier, hardware experts said.
"Nowadays, it's as simple as insert Tab-A into Slot-B," said Kyle Bennett, editor in chief of hardware specialty web site [H]ardOCP.com. "If you can do that, you can build your own PC. ... Everybody looks inside the computer case and sees all the stuff in there and it's really intimidating. But once you sit down and get started, it's not that complicated."
I've always enjoyed do-it-yourself projects, so decided to try my hand at building my own PC from scratch. (For more on that project, click here.) To my surprise, it genuinely wasn't very difficult. A reasonably savvy computer jock would probably find it a fun new way to customize a machine.
If you just want a basic PC, though, Bennett notes you're probably better off going with a brand name.
"There are many people who simply look at the computer as a tool," he said. "Those people should go to Dell or Gateway or HP. They can get a great machine and they have good support."
Both boutique PC makers and bigger companies acknowledge the do-it-yourself market, but say it hasn't affected their bottom line so far.
"If a person wants a BMW auto, they have to buy a BMW," said Sood. "But in the PC business, you can look at what BMW does and build it yourself."
You don't get a service contract with that, of course. But you can save money.
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