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Could HP Penetrate the Gaming Space?

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HP targets the premium and gaming market

During Deutsche Bank’s (DB) recent technology conference, HP’s (HPQ) CFO (chief financial officer) Cathie Lesjak stated, “We’re thrilled with the progress that we’re making in premium and gaming as part of that premium segment.” HP said that its virtual reality backpack has been well received by consumers.

Over the last two years, HP’s gaming laptops have seen tremendous growth in terms of unit shipments. However, its PC (personal computer) gaming segment is not yet driving substantial revenue growth. That might change as HP slowly increases market share. Profit margins are also higher for this product segment.

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Asus leads the gaming laptop market

According to DigiTimes, approximately 4.5 million gaming laptops were sold in 2016. Market leaders Asus and MSI shipped 800,000 and 850,000 units, respectively, in 2016. Demand for gaming PCs has risen significantly over the last few years, and almost every major geographic region experienced shipment growth last year. Asus and MSI expect unit shipments to rise between 10.0% and 15.0% in 2017.

Generally, high-end gaming notebooks are priced at more than $1,799, while mid-range gaming PCs are priced between $1,499 and $1,799, and entry-level notebooks start at $1,000. However, to target emerging markets in China (FXI) and Southeast Asia, MSI, Lenovo (LNVGY), and HP have launched entry-level gaming laptops priced between $799 and $999.

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