PC Gaming Hardware Market Surges 35% in 2025, Reaching $44.5 Billion

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The PC gaming hardware market experienced a remarkable surge in 2025, with sales skyrocketing by 35% to reach a total of $44.5 billion. This significant growth, as reported by Jon Peddie Research (JPR), is attributed to a confluence of factors including the mandatory hardware upgrades for Windows 11 and the increasing demands of modern gaming titles. The trend is expected to continue, with revenues projected to remain above $40 billion through 2028.

Key Takeaways

The PC gaming hardware market saw a 35% growth in 2025, reaching $44.5 billion in sales.
Microsoft’s Windows 11 hardware requirements are a primary driver for system upgrades.
New AAA titles and advanced graphics technologies are pushing demand for higher-end components.
While the entry-level market may shrink, mid-range and high-end segments are robust.
Tariff concerns also contributed to a surge in hardware purchases in early 2025.

Windows 11 Drives Upgrade Cycle

A significant catalyst for this market expansion is Microsoft’s push for Windows 11 adoption. The operating system’s new hardware requirements, particularly for CPUs and TPM 2.0, have necessitated upgrades for millions of PC gamers. According to JPR’s senior analyst Ted Pollak, this is an unprecedented forced hardware migration in the history of the Windows operating system. Many gamers are opting for new pre-built systems rather than attempting to upgrade their existing ones, while DIY enthusiasts are building new machines alongside their current setups.

Evolving Gaming Demands Fuel Growth

Beyond the Windows 11 mandate, the increasing complexity and graphical fidelity of modern games are also playing a crucial role. Titles utilizing engines like Unreal Engine 5, which leverage advanced features such as frame generation and ray tracing, demand more powerful GPUs and CPUs. This technological evolution makes older hardware increasingly obsolete, pushing gamers towards mid-range and high-end components to maintain optimal performance and visual quality.

Market Segmentation and Future Outlook

While the overall market is booming, JPR forecasts a potential decrease of around 13% in the entry-level PC gaming segment over the next five years. This shift is partly due to budget-conscious gamers migrating to consoles, handhelds, or mobile devices, or upgrading to more powerful PC hardware. However, the mid-range and high-end segments are expected to remain strong, driven by the continuous demand for cutting-edge performance. Additionally, concerns over potential tariffs in early 2025 led some consumers to purchase hardware proactively, further boosting sales figures for that period.

Tariff Impact on Q2 2025 Sales

In the second quarter of 2025, the PC gaming hardware market experienced an unexpected surge, partly driven by fears of impending U.S. import tariffs. This led to a