How much RAM do you really need for gaming?

What's considered the recommended maximum amount of RAM for gaming? You know, the maximum before it's just sitting there inflating e-peen rather than actually doing anything in-game? I personally have 8GB, but have read that no more than 4GB is used. Other sites say 8GB. My friend has something like 32GB, but I suspect he's compensating for something. Is more than 8GB even used? — Nathan I.
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I'm not sure if there's any correlation between RAM and body parts, but no, you don't need 32GB of RAM for gaming. I recommend 8GB or 16GB, and that will truly be fine for the time being.
If you have too little RAM—say, 2GB—there's a good chance a lot of the games you want to play just won't run. If you have the minimum 4GB for games like Alien: Isolation, you may not get the performance you would with 8GB and it'll be restrictive considering the number of programs the average person runs on Windows, but you can get by. You may see no performance dip at all.
Below is a shot of Task Manager while I was running Alien: Isolation, Chrome, Photoshop, and a few other applications on my rig at home with 8GB of RAM. Everything is peachy. I can Alt-Tab out of Alien and do something in Photoshop with just a slight slow-down.
But there are times when I wish I had more RAM. If I'm running a game, streaming it, responding to chat questions on a second monitor, and playing music, or whatever else I might want to do simultaneously, 16GB would make a difference (and it's not all that expensive). Additionally, sometimes I work with a music sequencer and load lots of virtual instruments into memory—if you do audio or video work on the same machine you game on, you might consider going higher than 8GB. I plan to upgrade.
But as far as just simply gaming goes, 8GB is just fine, and is currently the recommended spec for most games. 4GB is the minimum you should have, but even so, I benchmarked Batman: Arkham City at max settings (PhysX off) with 8GB RAM, then popped out one of my sticks and benchmarked it again at 4GB and saw absolutely no change in FPS. I did see a comparative drop with PhysX on, but that seems like a special case I'll have to investigate further to figure out, and I was still getting 52 average FPS.
In general, more RAM can make your computing more pleasant, and I certainly don't recommend against 16GB. But in general, if you're looking to improve framerate, a better video card is going to make a much bigger difference than going from 8GB to 32GB, which may have no effect at all.

There's no "maximum", there's "recommended". You have to know what to do with all that memory ;)