My network of AM2s are still chugging along fine, they can deal with HD or most games with the appropriate GPU or Raptor/SCSI/SAS. Though, Im afraid that despite an attempt at upgrading to HD2400 AGP and an SSD, my Shuttle-X XP2400 can't handle Youtube 720 without noticeable lags.

If I'm not mistaken, the biggest niches are for school kids and corporations; school kids will attempt to squeeze out all they can from their parents, but corporations may be satisfied with an Atom.

The fact that consoles have big lifespan, and considering that games are made almost never PC-exclusive fixes the perf. requirements more or less.
Then even if a title is is PC-exclusive its probably mmo which have even lower req.

As mentioned already, PCs are just good enough, since the Core 2 Duo era, PCs have been able to handle pretty much anything daily related and do it quickly.

Also take into consideration that lots of PC gamers have moved to 360/PS3, since they can handle FPS games(PC's bread and butter) there aren't many great PC exclusives coming anymore, Battlefield 3 is going multiplatform, BATTLEFIELD 3! FFS, No reason to upgrade/buy a top box.

I'm not sure if "PCs" included both desktops and laptops, but if it was desktops only, most home consumers buy laptops now.

There is no reason to upgrade or buy new, simple as that.

PC performance plateaued in 2007-2008. Everything beyond that is just sugar for most intents and purposes. For once, there really isn't need to upgrade one's system because lack of performance. Even Flash and Windows can't subdue the processors now.

I'm a gamer with a 3 year old PC. I'm not buying a new desktop any time soon and if this one dies, I will just build one from a barebones unit.

-- There is no need to replace or upgrade computers for most users.

-- Three and four-year-old hardware will run every operating system, web browser, and office suite that exists.

-- It is much simpler and cheaper to replace a hard drive if it fails than an entire system.

-- Gamers and video editors may need upgrades or even new systems, but even in those cases, there aren't many titles or functions that require today's bleeding edge (and expensive) hardware.

Sorry Mitch, MS' sales is great. Windows 7 is the best selling OS ever and has already surpassed Vista after less than a year on the market. It is only Apple's market share that is falling:

http://marketshare.hitslink.com/os-market-share.aspx?qprid=11

and you are obviously clueless - or just trolling.

Low end PCs sell in big numbers, but the profit margins are too tight. High end PCs make huge profit, but sell in tiny numbers. The mid range is the "bread and butter" of the industry.

So what does the industry do? Jack up the prices of mid range kit going into a recession, thats what. The strong dollar put up to 40% on everything, so who was going to notice another 10 or 15% (or 100%, in the case of RAM) on top? Well, lots of people evidently.

The thing about the market is it will never, *ever* get tired of slapping you when you do something stupid.

Sad but true.
Time for the very rich to just make jobs, even if it's moving a pile of wood 10 feet type work, an put their money to use, just to keep the value up.

Also, in the past a PC might last 3-4 years before becoming antiquated and slow running. Today a PC can go 6 or more years and still be useful. And as Jim said, when a computer breaks it only makes sense to fix it. Long gone are the days if setting IRQs and memory addresses, so fixing really isn't that hard of a task.

Is this affecting PC sales? Maybe?

Could it be that the poor uptake of new MS operating systems are affecting global PC sales? No...

Unemployed people do not buy much other than food. The lower the consumption the more people who lose employment. We're in a vicious downward economic sprial worldwide.

It makes a lot more sense for today's budget to fix those computers instead of buying new ones, especially if your unit runs XP or better. It certainly is significantly more cost effective.