More expensive computers do have better hardware, and can process data faster than the crappy "typewriter extreme" model you can buy at WalMart. A gaming computer will have a much better graphics card than most standard computers, which allows it to render onscreen images more quickly, which allows games to run faster. Faster processors process data faster, which is a huge thing if you encode audio or video frequently, or rendering 3D models, or things like that.

Of course, sometimes the price is just because of the brand. A 1000 dollar Apple may only have the hardware that a 700 Windows machine has.

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