I am one of those people who could not afford, nor bring themselves, to shell out $$$ for the latest and greatest hardware to run upcoming titles. I've always had modest pc's to run undemanding games like CSS and the old total war series. And that always sufficed for me. I pretty much gave up hardcore gaming even though I really enjoyed gaming, because I couldn't bring myself to upgrade my pc every year or so and I just don't like controllers. This, and because I love RTS games. And with the upcoming SC2 release, I shelled out for a new computer =) So I think PC gaming is declining, but its not going to go away anytime soon because for some people, the keyboard and mouse is the only way to game. And I just find being able to watch YouTube videos, listen to music and play your favourite games all at the same time, unbeatable!
Considering that people "upgrade" their PC's every n number of years, you're guaranteed a hardware/generation upgrade in any event. Even if you're not specifically after one.
I remember when the Ti4600 was the bee knees (and that was before the 9800XT). My current laptop has an HD4570, which simply annihilates either of those cards (I think it even smashes the generation after). I didn't specifically look for a laptop with an HD4570, it just happened to be included in the one I purchased. My last laptop had an ATI X200 - that was a dog (well, it could play Quake 3 okay so not that terrible). I think the one before that had an S3 Savage or something, could barely play Enemy Territory. I'm not even mentioning the increases in CPU power, memory, and hard drive.
In any event, you get an upgrade sooner or later - unless you stop buying PCs of course.
I still prefer games on PC, simply because I use the keyboard and mouse a lot and I prefer that interface into the game. I HATE using a joypad thing for shooting games. I can move the mouse to a target just like that, but using those stupid thumb toggle things just doesn't cut it for me!
PC Gaming is far from dead, but a growing trend (which seems to be the same in the film industry) is to quickly rush out games for the quick cash.
The thing they don't seem to realize is for every rubbish game they chuck out, i take one step back in my interest in new games.
If i look at all the releases so far this year i can only name 1 game that I bought. It was the only interesting release this year (to me). Previous years there has been multiple items, too many developers are now playing it safe.
Edit: As a side note, you do not need to upgrade your PC every year to play the latest games, i have a 3 year old PC and i am still playing on medium.
I hate to sound like a fanboy, because my brand loyalty is limited, but when Blizzard says "Diablo 4: World of Starcraft announced (Tentative release date 2029" it warms my heart to know that there are still perfectionists out there.
Consider too that PC gaming as a mainstream form of entertainment is only about 20 years old. The movie industry took decades to find it's stride.
Consoles and digital distribution are changing the face of the PC gaming industry. Heck, the next 5 years of video games may be defined by portable devices such as iPhones and the 3DS. But PC gaming will still be present, in one form or another.
One could argue that console gaming needs PCs - in some form or another.
The fundamental business model of the entire PC industry is ongoing/repeat sales (the real reason we have multi-core CPUs is because Intel & AMD could no longer push the GHz barrier economically anymore).
The real improvements in component technology don't come from console makers anymore (it hasn't been that way for a long time). It comes from the competitive exchanges between companies like AMD/ATI, Intel and NVIDIA.
NVIDIA and ATI make their money in the PC market (although I'm sure NVIDIA will have a margin on every PS3 that is sold). Those two will definitely want to see a thriving PC gaming scene, because there sure isn't much return from consoles (the IP for the ATI GPUs in the 360 & Wii are owned by Microsoft & Nintendo).
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