Why are GPUs so expensive?

[Twinz]

Nvidia aren't a charity, what's wrong with releasing some stupidly high end products that makes no sense to ordinary people like me? I don't see what the problem is.

The problem is that the 2080Ti is priced like a stupidly high-end product but it performs like a simple generational upgrade.

If it were twice as fast as a 3yr-old 1080Ti, then it's price would make sense, *or* if it's modest performance increase over the last generation was sold at last-gen's price points, that too would make sense.

But they basically took a simple generational performance improvement and priced it as if they had debuted the world's first cold fusion reactor.

I agree that "worth the money" is subjective. To people who are not into computers, none of our stuff is "worth the money". But in the context of this discussion, the metric is basically the past trajectory that price-to-performance has followed, and the current RTX lineup has simply failed to maintain that trajectory.

Progress is not guaranteed, I get it. But when progress stagnates, I don't think it's useful to pretend otherwise.

With RTX and its price points, Nvidia has basically sold us "the emperor's new clothes". Many of us are pointing out that the emperor is naked.

 

[melmac]

Demand for mining isn't artificial demand.

People still buy cards today to mine on.

What if I buy a card for encoding use is that artificial too? Or I buy it for animation use?

It's not fair to use launch prices on a product that went up in price over it's lifetime. It's a skewed argument. Using their highest ever price is a fairer comparison as it reflects what they sold for or at least an average price over the last year of their lifespan.

When Freddo's launched they were 10p. They are now 30p.

So If I was to launch a new product today to compete against the Freddo would it be fair to use 10p or 30p as the target?

No, the mining period wasn't a case of normal supply and demand. And no business man worth his salt would use the prices that GPUs reached during those times as what they could away with charging during normal time.

It was a freak occurrence, that only lasted a few months. Up until then the prices were between £600 and £700 for the majority of cards. And you also forget that when the boom was over the price went back down to normal. There was a fire sale of 1080Ti's when they went out of production to clear off as much inventory as possible, cards were going for between £500 and £600. And, as usual with EOL cards, the retailers raise the price so people will buy the new cards not the old ones.

The only method that works is using the MSRP. And that's what people use. They don't use the highest price reached and they don't use the lowest price either.

Why do you keep on using comparisons to other products like cars and chocolate bars to make a point? The comparisons don't work.

The prices of the Turing cards aren't high because the 1080Ti prices reached whatever during the mining boom, they are high because the die size of the cards is massive. Even the 2060 is comparable in size to the 1080Ti.

 

[melmac]

The problem is that the 2080Ti is priced like a stupidly high-end product but it performs like a simple generational upgrade.

If it were twice as fast as a 3yr-old 1080Ti, then it's price would make sense, *or* if it's modest performance increase over the last generation was sold at last-gen's price points, that too would make sense.

But they basically took a simple generational performance improvement and priced it as if they had debuted the world's first cold fusion reactor.

I agree that "worth the money" is subjective. To people who are not into computers, none of our stuff is "worth the money". But in the context of this discussion, the metric is basically the past trajectory that price-to-performance has followed, and the current RTX lineup has simply failed to maintain that trajectory.

Progress is not guaranteed, I get it. But when progress stagnates, I don't think it's useful to pretend otherwise.

With RTX and its price points, Nvidia has basically sold us "the emperor's new clothes". Many of us are pointing out that the emperor is naked.

I don't fully agree with this. Nvidia will have their margains, just like any company. And the Die sizes of the Turing cards are massive, so it did cost them more to make. So since they cost them more to make, when you put the margains on top then you have the current higher prices.

Now, if they didn't sell at those prices then Nvidia would have had to lower their margains to try and move stock. But, since prices haven't come down, I can only presume that the cards sold at the prices listed.

As for the performance upgrade and the Ray Tracing performance. Well, Once they decided to try and go down the route of real time raytracing, then the rasterised performance increase was going to suffer. We can argue all day about whether it was worth it or not but I do think people under estimate how big a deal it is to get playable framerates in real time ray tracing. It is the holy grail of gaming development.

Nvidia's mistake, for me, was that they should have done more to get games out for launch that supported both DLSS and Ray Tracing. Failing that I think they should have subsidised the prices a little. Or maybe given something back to the gamers that bought one of the 2xxx cards.

 

[D.P.]

Your logic has one flaw. AMD competes atm, yet people still buying overpriced Nvidia products.
AIB RX5700 can be bought new for £250 and RX5700XT for £299. Yet there are people in this very forum the last 7 days, trying to justify why bought inferior cards from Nvidia. Like the GTX1660S instead of a 5700. Both cards at same price point yet 5700 is 50% faster. Few years back everyone would be laughing, now they avoid the discussion like the plague.

RX570 is still been outsold by more expensive inferior products for years also.

So has nothing to do with competition or AMD.

Your logic has one flaw. AMD is not eating into Nvidia's market share in a way that Nvidia cares about, so margins remain unchanged.

 

[D.P.]

I don't fully agree with this. Nvidia will have their margains, just like any company. And the Die sizes of the Turing cards are massive, so it did cost them more to make. So since they cost them more to make, when you put the margains on top then you have the current higher prices.

Now, if they didn't sell at those prices then Nvidia would have had to lower their margains to try and move stock. But, since prices haven't come down, I can only presume that the cards sold at the prices listed.

As for the performance upgrade and the Ray Tracing performance. Well, Once they decided to try and go down the route of real time raytracing, then the rasterised performance increase was going to suffer. We can argue all day about whether it was worth it or not but I do think people under estimate how big a deal it is to get playable framerates in real time ray tracing. It is the holy grail of gaming development.

Nvidia's mistake, for me, was that they should have done more to get games out for launch that supported both DLSS and Ray Tracing. Failing that I think they should have subsidised the prices a little. Or maybe given something back to the gamers that bought one of the 2xxx cards.

The thing is the Ray tracing die area amounts to about 5% of the total die, so how much more rasterization performance would you get with 5% more die dedicated to CUDA cores? You also have to realize that rasterization performance doesn't just increase linearly by throwing more cores at it. Turing actually has some large architecture changes to try and help increase scalability with modern game engines. Being stuck on 12/16nm meant there was not much more room left to do anything. Maybe 7-10% more rasterization performance vs RTX. RTX likely has a far bigger impact on Nvidia's future. They now control the discourse.

 

[Kelt]

Yea, that was a good price for that card in 2017. Now Nvidia want double that or more for their 2080Ti. It’s a joke. I don’t care for the car analogy being made, not everything can be simply compared like that. If we go down that lane soon the Titan series will be sold by Gibbo for ONLY £9999! Then 3080Ti for ONLY £4999. Want a 3080? ONLY £2999! Oh and best price for performance 3070, ONLY £1999!!!

You got the prices totally incorrect...you forgot to add the all important 99 pence.

 

[TNA]

Your logic has one flaw. AMD competes atm, yet people still buying overpriced Nvidia products.
AIB RX5700 can be bought new for £250 and RX5700XT for £299. Yet there are people in this very forum the last 7 days, trying to justify why bought inferior cards from Nvidia. Like the GTX1660S instead of a 5700. Both cards at same price point yet 5700 is 50% faster. Few years back everyone would be laughing, now they avoid the discussion like the plague.

RX570 is still been outsold by more expensive inferior products for years also.

So has nothing to do with competition or AMD.

Yeah, I get that. But I don’t see how that is a flaw in my argument. All that means is AMD need to complete better. They need to take the performance crown and be THE premium card to have. They have not been seen as the best for a very long time and always playing second fiddle to Nvidia. They need to up their marketing also and improve mind share. Clearly what they are currently doing is not good enough and this reflects in the market share. In business it is not only just about the product.

What's wrong with them being "Not worth the money"?

I can't think of any product that doesn't have a luxury version that's affordable to an average person. Even something simple like a biro, there's an expensive Parker that's not worth the money. Expensive jeans, trainers etc. Every product sector has a rip off high end that only the rich buy. Even something trivial like Christmas crackers, that's high end versions with expensive toys that make no sense for ordinary people to buy.

Nvidia aren't a charity, what's wrong with releasing some stupidly high end products that makes no sense to ordinary people like me? I don't see what the problem is.

The problem I have with Nvidia is the low end. The 1660 is kind of entry level and it's a lot of money for an entry level product.

The 2080ti could be £10,000 for all I care. They just need to release more products to fill the gaps. Perhaps start the 1660 at £129.99 and then maybe have the next card up priced at £179.99 etc and eventually you end up at the high end £10,000 model.

What’s wrong? Nothing is wrong, they will charge as much as they can. I thought I made that much clear. But that does not mean I have to to like it. To me as I said it is not worth it that you have to pay 2-3 times the money for a 2080Ti vs a 2070S when the performance gap is so small. If others think it is, then that is their decision.

You got the prices totally incorrect...you forgot to add the all important 99 pence.

 

[CuriousTomCat]

Whatever the reason for the current GPU crisis, I'm 100% free of any blame because I haven't contributed to Nvidia's monopoly in any way since 2001. I blame the other 81.2%

 

[NZXT30]

Whatever the reason for the current GPU crisis, I'm 100% free of any blame because I haven't contributed to Nvidia's monopoly in any way since 2001. I blame the other 81.2%

The 5700 and 5500 amd series are equally overpriced.

 

[CuriousTomCat]

The 5700 and 5500 amd series are equally overpriced.

No they aren't, AMD only make about 30% profit per GPU. If they drop prices to a good level, their profit would drop to 15% or less. They would have no money for R&D for the next generation.

Nvidia sells 4x as many products. This means they can bulk buy the raw materials in volumes 4x larger than AMD. Bulk buing means lower prices. Nvidia are then able to order 4x the amount of product from TSMC at a much lower cost than AMD due to the volume. This allows Nvidia to make a HUGE 60% profit per GPU while selling at a similar price to AMD. How can you expect AMD to compete with that? 30% profit vs 60% profit.

AMD are 100% free of any blame. Also, Nvidia are only reacting to the blind consumer who is unable to see the devastating impact his/her purchase has on the GPU market. The consumer then complains about the high prices that he/her is at blame for.

If Nvidia and AMD had a 50% equal share, AMD would be able to sell product for less money and make more profit for each GPU at the same time. Prices would fall. That's how economics works.

Instead, we have what's known as the snowball effect of business which is when one company grows increasingly larger while the other shrinks and prices spiral out of control and their competitor is unable to compete.

 

[NZXT30]

No they aren't, AMD only make about 30% profit per GPU. If they drop prices to a good level, their profit would drop to 15% or less. They would have no money for R&D for the next generation.

Nvidia sells 4x as many products. This means they can bulk buy the raw materials in volumes 4x larger than AMD. Bulk buing means lower prices. This allows Nvidia to make a HUGE 60% profit per GPU while selling at a similar price to AMD. How can you expect AMD to compete with that?

AMD are 100% free of any blame. Also, Nvidia are only reacting to the blind consumer who is unable to see the devestating impact his/her purchase has on the GPU market. The consumer then complains about the high prices that he/her is at blame for.

If Nvidia and AMD had a 50% equal share, AMD would be able to sell product for less money and make more profit for each GPU at the same time. Prices would fall. That's how economics works.

Instead, we have what's known as the snowball effect of business which is when one company grows increasingly larger while the other shrinks and prices spiral out of control and their competitor is unable to compete.

Where are you getting the profit margins from? AMD is far from free from any blame. Their prices have also gone up and the only reason they didn't charge even more was because of the supers announcement, the 5500 is also the joke of the year price wise. Don't forget AMD is now making good money from ever increasing in price cpus while providing 12tf gpu and 8 core cpu for the next xbox for peanuts.

 

[D.P.]

No they aren't, AMD only make about 30% profit per GPU. If they drop prices to a good level, their profit would drop to 15% or less. They would have no money for R&D for the next generation.

Nvidia sells 4x as many products. This means they can bulk buy the raw materials in volumes 4x larger than AMD. Bulk buing means lower prices. Nvidia are then able to order 4x the amount of product from TSMC at a much lower cost than AMD due to the volume. This allows Nvidia to make a HUGE 60% profit per GPU while selling at a similar price to AMD. How can you expect AMD to compete with that? 30% profit vs 60% profit.

AMD are 100% free of any blame. Also, Nvidia are only reacting to the blind consumer who is unable to see the devastating impact his/her purchase has on the GPU market. The consumer then complains about the high prices that he/her is at blame for.

If Nvidia and AMD had a 50% equal share, AMD would be able to sell product for less money and make more profit for each GPU at the same time. Prices would fall. That's how economics works.

Instead, we have what's known as the snowball effect of business which is when one company grows increasingly larger while the other shrinks and prices spiral out of control and their competitor is unable to compete.

So much nonsense in this post it is unbelievable you wasted all that time posting a complete fabrication of reality.

 

[Robert]

Any mining related price hikes on the horizon?

 

[bru]

No they aren't, AMD only make about 30% profit per GPU. If they drop prices to a good level, their profit would drop to 15% or less. They would have no money for R&D for the next generation.

Nvidia sells 4x as many products. This means they can bulk buy the raw materials in volumes 4x larger than AMD. Bulk buing means lower prices. Nvidia are then able to order 4x the amount of product from TSMC at a much lower cost than AMD due to the volume. This allows Nvidia to make a HUGE 60% profit per GPU while selling at a similar price to AMD. How can you expect AMD to compete with that? 30% profit vs 60% profit.

AMD are 100% free of any blame. Also, Nvidia are only reacting to the blind consumer who is unable to see the devastating impact his/her purchase has on the GPU market. The consumer then complains about the high prices that he/her is at blame for.

If Nvidia and AMD had a 50% equal share, AMD would be able to sell product for less money and make more profit for each GPU at the same time. Prices would fall. That's how economics works.

Instead, we have what's known as the snowball effect of business which is when one company grows increasingly larger while the other shrinks and prices spiral out of control and their competitor is unable to compete.

Unfortunately this just comes across as.

"AMD good, NVIDIA bad"

When in reality they are both just bad, fleecing us the customers with high prices.

Do they have the right to do this?

Well in the real world they can charge whatever they like and the customer decides whether to pay the asking price or not.
Some of the posts in this thread are as if, we have a right for luxury items to be in a certain price range. Which of course we actually don't. We might like them to be but as with everything in life that's tough.

 

[Gregster]

No they aren't, AMD only make about 30% profit per GPU. If they drop prices to a good level, their profit would drop to 15% or less. They would have no money for R&D for the next generation.

Nvidia sells 4x as many products. This means they can bulk buy the raw materials in volumes 4x larger than AMD. Bulk buing means lower prices. Nvidia are then able to order 4x the amount of product from TSMC at a much lower cost than AMD due to the volume. This allows Nvidia to make a HUGE 60% profit per GPU while selling at a similar price to AMD. How can you expect AMD to compete with that? 30% profit vs 60% profit.

AMD are 100% free of any blame. Also, Nvidia are only reacting to the blind consumer who is unable to see the devastating impact his/her purchase has on the GPU market. The consumer then complains about the high prices that he/her is at blame for.

If Nvidia and AMD had a 50% equal share, AMD would be able to sell product for less money and make more profit for each GPU at the same time. Prices would fall. That's how economics works.

Instead, we have what's known as the snowball effect of business which is when one company grows increasingly larger while the other shrinks and prices spiral out of control and their competitor is unable to compete.

Are you 4K8K in disguise? This is complete and utter made up nonsense. Where are you getting your figures from?

 

[CuriousTomCat]

Are you 4K8K in disguise? This is complete and utter made up nonsense. Where are you getting your figures from?

It was something I read a few years ago so the exact figures are a little hazy. I'll try and find the source.

 

[bru]

It was something I read a few years ago so the exact figures are a little hazy. I'll try and find the source.

So in a discussion about the state of the seeming overpriced currant generation of cards you using figures from an article you read a "few" years ago? Yup nice job.

 

[TNA]

So in a discussion about the state of the seeming overpriced currant generation of cards you using figures from an article you read a "few" years ago? Yup nice job.

4K8K alt account confirmed. That is one of his favorite things to do, jump into a debate disagreeing with everyone and use decade old information as evidence.

 

[Devrij]

Any mining related price hikes on the horizon?

Pretty sure gpu mining is all but dead and gone. Its all asics now.

 

[Guest2]

Pretty sure gpu mining is all but dead and gone. Its all asics now.

Did prices ever go down again after the mining boom? I cant remember they did, not that i expected them too