Hand Gesture has been used in different applications and also implemented on different platforms. A faster and smooth approach with reasonable accuracy is always needed to make smart devices smarter and faster. This paper describes a novel procedure of hand gesture recognition using Principal Component Analysis (PCA) implemented in FPGA Simulator. The simulation was done using co-simulation tool of Simulink with Xilinx System Generator (XSG). Hardware-Software co-simulation is a good methodology which assures accurate and rapid prototyping leading to faster simulation times for heterogeneous systems design. Total processing time for the designed hardware was found to be 530ns using FPGA having the operating frequency of 100MHz.