I tried a lot of games with M290X and they work great at 1080p and 1440p.
The only game I had trouble running was the ultra demanding Assassin's Creed Unity which hovered around 25-30fps at medium settings.
The rest of the games work great, and a lot of these are next-gen titles!
Dragon Age Inquisition runs around 50-60fps in 1440p at high setting! Runs and looks beautiful.
Shadows of Mordor is very playable at 1080p with high settings. Didn't check the fps, but it's high and without lag.
Tomb Raider works at around 60fps in 1440p at high settings, and works in 50fps with the beautiful TressFX on Lara's hair.
CoD Advanced Warfare runs at 50-60fps in 1440p at high settings. It is beautiful in this resolution and runs without any lag or stutter.
Wildstar runs at maximum setting in 1440p really smooth. You can even play at 3K. So does Guild Wars 2 (and any modern MMO, for that matter).
Diablo 3 runs at 50fps in 1440p with craked up settings.
Crysis 3 runs at 40-50fps at high setting in 1080p.
As you can see, even the base model runs modern games just fine at 1080p and 1440p. At 1440p the image is fairly sharp (in fact, I think it looks good at 1080p) as well. Sure, the 2013 27" iMac will run just as well and 1440p games will look even better at native 1440p - but not much sharper, tbh - you'll mind only if you're OCD about it. I can only imagine how well the M295X is doing.
So, think of it this way:
iMac 5K is a productivity machine with a beautiful screen. The fact that it games well is a plus. If you want that beautiful screen for productivity, and play some games from time to time, it is great, the best iMac, etc.
If you want a gaming iMac and nothing more, the 2013 model is just as fine and is cheaper. But if it is "for gaming only" - than just buy a PC with a GeForce GTX 970, an Xbox One controller and hook it up to a TV. It will run the games better, there won't be any heat issues, etc.
As for 290 vs 295.... Well, the 295 is a fine option and I completely understand the people who bought it. For me - 290 does the job great, and for those demanding games, the price difference + a little bit extra got me a brand new Playstation 4. So, if gaming is your thing - why not save some money and get a console? The M290X will run PC exclusives like StarCraft 2, Overwatch or MMORPGs just great. And for those most demanding titles, you have a console (and even those are playable with M290X). And no thermal issues or loud noises with the 290.
These are just my thoughts - and it doesn't mean this choice is good for everyone.
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Comparing the 290x vs the 295x is it a substantial difference? I ordered a 512 ssd upgraded i7, 290x, using it for home use, music, and photoshop will it perform well?
Yes. Quite well - no worries. Please note, though, that Yosemite UI does lag in Mission Control and in Preview of really large images. The rest works just great, and while M295X owners report that they have less lag in Mission Control, even they have some lag. Thoughts are divided if this is a software issue or just lack of GPU horsepower.
Mission Control will lag with 290 with lots of windows open. If this bothers you, 295 is a better choice. But that's it - everything else is fast and smooth, so home use, music and photoshop - it will work really really well.