I agree on using dedicated hosting. However, average gaming systems are that powerful. I was digging for an above-average rig for a friend to play the latest games. The system I built him (Jackel) was 6 cores with 8GB of RAM and runs most of them very well. Only cost $700 with the Win7 license.

At those prices, it would be a better deal than hosting after around a year given it would continue working and have resale value.

Jackel Gaming Rig http://elitegamingcomputers.com/gaming-computers/#2