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“The desktop is dead!” tech journalists cry. And to be sure, sales of traditional desktops have been declining year after year as users switch from bulky boxes to svelte handsets. After all, no one needs a traditional PC to check email or whip up a spreadsheet. We have smartphones, tablets and laptops for that.

So is the desktop PC really a thing of the past? Not quite.

While the desktop market droops, the enthusiast PC market has been quietly making serious gains. Research firm GFK reports a 55% year-over-year increase in gaming PC sales in the first half of 2017 alone.

So while the desktop PC may indeed be dying, it’s been reborn as a souped-up, fire-breathing supercomputer. And as far as enthusiast users are concerned, no portable computing platform on earth can replace it.

High-flying prices

Need an example? Consider 8Pack, a UK-based designer of gaming computers. The folks at 8Pack have created a digital monster called OrionX. The system won the admiration of Forbes magazine for both its unprecedented power and stratospheric price tag.

OrionX gaming system

OrionX: an enthusiast gaming box retailing for (gulp) $30K

How stratospheric? OrionX costs around $30,000 — and still has room for more drives, graphics and RAM.

Whoa. So is the desktop dead? Thirty grand says it ain’t.

ASP to the rescue

This issue turns out to be one of those good-news/bad-news things. The bad news is that OEMs such as Dell, HP and Lenovo can hardly give their desktops away, let alone sell them for a big profit.

The good news is that a select cadre of OEMs and system builders are not only selling more enthusiast desktops, but selling them at a higher average sale price (ASP) than ever before.

As computing technology moves inexorably forward, we ask more from our computers. Software engineers — especially those who create popular AAA games like “Fortnight” and “Resident Evil” — write code that requires unprecedented graphics and processing power.

This, in turn, creates demand for multi-GPU arrays; 8- and 10-core processors; high-capacity, super-speed solid state drives (SSD); and other upper-echelon components. And these components have become increasingly expensive of late.

Economies of a lesser scale

But doesn’t the price of a given component usually fall as it proliferates? Yes, usually. But not in this case.

That’s because no matter how many diehard gamers are clamoring for triple-SLI Nvidia GeForce Titan X Pascal graphics cards, the actual number of units sold is still far lower than previous industry norms. Lower run-rates lead to lesser economies of scale. And that leads to higher ASPs.

So are you suffering anemic margins and lost revenue due to failing desktop sales? If so, then start thinking about enthusiast gaming boxes. They’re anything but dead.

 

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