Often when someone joined a server there would be a tiny bit of lag for all of the users.
I figured out the server was using a java method that indirectly was doing a blocking DNS lookup. I think it was reverse DNS but I forget which method it actually was, and if it was blocking the main thread or just the networking thread.
(PiHole still wouldn't have created an additional cost though.)
Consider the case of a web page. The content you want (the news article) consists of say 100 get requests totaling 1mb. The content you don’t want (ads) consists of 120 get requests totaling 1.2mb.
When pihole is in use the content you want does not have to contend with adversarial content. You have half as many requests, there’s 50% less data in the pipe, you get what you wanted faster.
Gaming is not impacted because your games don’t call advertising servers. If they did (for some insane reason) the real game requests get served immediately not having to wait in line behind the ad content.
If you want a one-purpose device for it, then you would be looking into buying a SOC computer like a Raspberry PI 3 (should be cheaper than the 4) and about an hour to set it up.
One little thing I have done is set my router's secondary DNS to 1.1.1.1, just in case the power fails or the PI goes down. When I set mine up I completely forgot to set ESXI to auto-power on the VM, so after a brief power outage I had no internet for almost an hour because I had no redundant DNS configured. I got blindsided by my own mistake. Now everything is on a UPS and the VMs are correctly configured in case power is lost long enough to require a shutdown.
https://pi-hole.net/ has more info on the install.
The resolution has to be done a way or another, by default this is your ISP and they usually suck. I had hand-picked DNSes before (there is a utility that tests plenty of them from your connection) and after adding a pihole on a simple RPi it was even faster.
DNS performance is very fast, better than ISP dns usually.
General web usage is much, much more pleasant.
No issues with gaming.
I ran mine on a Raspi Model B. You know, the one with the RCA plug and SD card slots. From 2012. At some point the SD was so messed up I couldn't ssh into it any more, but it still worked.
Now Pihole is running on my Thinkcenter minipc as a Socker image along with a good dozen others. I don't have to worry about SD corruption or sudden shutdowns any more.
If you add a bunch of extra-aggressive blocklists maybe you'll have issues but if you stick with the recommended OOTB lists, you'll be fine.