58XX pricing rumour :-(

skippy2421 · 2 Sep 2009 at 11:42

straxusii said:
I doubt anyone is buying a RV870/GT300 on this forum for DX11 support, it's for the improved performance with DX11 a nice bonus.

Oh i understand some people will be buying it for improved DX10 however i can't see where current gen cards are struggling (with exception to crysis as always or those with 30 inch monitors), personally i can tolerate my 4850 a little longer until the prices come down and DX11 is about. I imagine this would apply to a fair few people on this forum who aren't obsessed with frame rates and are happy as long as a game is playable at a reasonable quality.

kylew · 2 Sep 2009 at 11:49

straxusii said:
Makes sense to me that the X2 variant shouldnt be twice the price but more like +50% the price.

To make it yes some of the costs are double the single card (ram chips, GPU itself) but a lot of the costs aren't, R&D, shipping, marketing etc etc.

Kylew I agree of course they won't price the card out of reach but I also dont think they will 'give away' a 5870 for ~£200 when they will make more money overall selling it much higher. Of course the question as to what price point generates the most money is a very black art and I'm sure the ATI finance and marketing bods have been over it a million times in recent months.

That's the point though, they WON'T make more money by selling it at a higher price. The higher the price the more they're impacting the volume the cards will sell at.

Realistically, the 5850 will be the more popular card due to the lower price yet not radically difference performance.

To sell high doesn't mean to profit high.

You're thinking of it in completely the wrong way.

I assume you're equating it to you for example, selling off one of your graphics cards.

The higher you sell it for, the better it is for you.

Retail doesn't work like that.

Far more people are far more likely to pay £140 for a graphics card than over £200.

It's just the way things work. Why do you think the biggest profit bringers of past generations have always been the middle level of graphics cards?

The 2600s, 8600s etc are where the profit lay for nVidia and ATi, so for ATi to bring their higher end GPUs in to that price range is basically instasucess.

straxusii · 2 Sep 2009 at 11:58

kylew said:
That's the point though, they WON'T make more money by selling it at a higher price.

I hope you are right and that ATI agree with you but I don't, I think ATI will make more money selling the 5870 for £285 at launch rather than £225.

kylew · 2 Sep 2009 at 12:01

straxusii said:
I hope you are right and that ATI agree with you but I don't, I think ATI will make more money selling the 5870 for £285 at launch rather than £225.

I know you don't, it's because you don't seem to understand how it works.

I'm not trying to be condescending of course, but I think you're having difficult grasping how companies price things to sell in volume and not to sell for the highest profit on a per item basis.

Which makes more money in total?

£300 at 1000 sales, or £200 at 100,000 sales?

Basically, at £285 they will make money money per card, at £200 they'll make less money per card but sell a lot more.

Say there are millions of people who would buy a 5850 at £140 but a 5870 is out of their budget.

Say there are hundreds of thousands that will buy a 5870 as they can afford it.

The 5850s are going to make the most money by sheer volume of sales. Add to that the ease of crossfiring and you'll see why people are more likely to buy cheaper and therefore maximise sales and also profit.

Don't forget, the rise in price isn't proportionately related in to the difference in money.

A difference in £85 isn't directly proportionate to how many more or less people are going to buy it.

£85 extra is a massive reduction is prospective buyers, you're looking at a fraction of the people who would buy a 5850.

reflux · 2 Sep 2009 at 12:05

You're basing your theory on basic market economics Kylew, without considering price elasticity of demand. It's pretty obvious that people will be willing to pay more for a new generation of cards to me - these people are the early adopters who begin the product life cycle. But there's a point at which the price becomes too much for some people. This is the elasticity of demand, and without competition, the elasticity is lower because there's no alternative.

Whilst ATi are known for the budget pricing, why should they bother when there's no real competition? I'm not saying they're going to rip people off, but look at what happened when the 8800GTS 320mb launched from Nvidia; it was £200 because there was no competition, but in a decent marketplace we saw a card fitting the same role (the GTS 250) @ £100.

You make a good point, but without actually considering the price vs. demand structure, you can't predict with any certainty how things will play out.

straxusii · 2 Sep 2009 at 12:06

kylew said:
I know you don't, it's because you don't seem to understand how it works.

Which makes more money in total?

£300 at 1000 sales, or £200 at 100,000 sales?

Of course I understand how it works, we are both speculating so dont come over that you KNOW exactly what the right price will be!

skippy2421 · 2 Sep 2009 at 12:09

reflux damn you, you got in before me

i was going to say there's only so far they can go before they start losing sales due to price, using the above prices as an example i wont be getting one at £285 but i could afford £225. With the recession in full swing ati must be careful not to push this too far

kylew · 2 Sep 2009 at 12:09

straxusii said:
Of course I understand how it works, we are both speculating so dont come over that you KNOW exactly what the right price will be!

Well there's reports that ATi are sticking to the current pricing scheme any way, so we do in a round about way know what they're going to be priced at.

kylew · 2 Sep 2009 at 12:10

skippy2421 said:
reflux damn you, you got in before me i was going to say there's only so far they can go before they start losing sales due to price, using the above prices as an example i wont be getting one at £285 but i could afford £225. With the recession in full swing ati must be careful not to push this too far

Exactly, While £85 itself isn't huge considering the actual cost, it's large percentage of the over all cost.

I know I can't predict demand, but I know ATi aren't stupid enough to impact demand by pricing their cards too high.

Emlyn_Dewar · 2 Sep 2009 at 12:19

Perfect_Chaos said:
So much for being pleasantly surprised, if this and only 60% faster turns out true i am just going to wait for nvidia cards.

Because they will be cheaper... *cough*

skippy2421 · 2 Sep 2009 at 12:23

Also seeing as there is windows 7 and core i5 coming out very soon, there's also the fact people are going to be looking to spend on other hardware and if ati hammer them with high prices people will have to make sacrifices and in some instances some people are going to pick the cpu/mobo/ram combo or OS over the new graphics card. If they have lower prices more people may be able to have it all. However this is all speculative isn't it we'll find out soon enough.

reflux · 2 Sep 2009 at 12:25

I'm just wondering what games these are going to be worth buying for. DX11 aside (the only thing I can think of that even uses that is DiRT 2), all the DX10 stuff already gets destroyed these days by decent mid to high end cards.

kylew · 2 Sep 2009 at 12:25

skippy2421 said:
Also seeing as there is windows 7 and core i5 coming out very soon, there's also the fact people are going to be looking to spend on other hardware and if ati hammer them with high prices people will have to make sacrifices and in some instances some people are going to pick the cpu/mobo/ram combo or OS over the new graphics card. If they have lower prices more people may be able to have it all. However this is all speculative isn't it we'll find out soon enough.

Whist it's speculative, it's more along the common sense routes.

A lot of people are making blind guesses, where as I feel that I'm making an educated guess/informed guess as I'm basing my conclusions on common sense and what we've seen ATi do with previous GPU releases.

kylew · 2 Sep 2009 at 12:27

reflux said:
I'm just wondering what games these are going to be worth buying for. DX11 aside (the only thing I can think of that even uses that is DiRT 2), all the DX10 stuff already gets destroyed these days by decent mid to high end cards.

Now this is complete speculation, but I would expect capcom to have something in the works.

I'd also expect any devs that had or have worked on DX10.1 titles to be getting something ready for DX11 for maybe early 2010?

Squakingcow · 2 Sep 2009 at 12:41

Even if these prices turn out to be true, they are nowhere near the ridiculous prices that graphics cards were launched at a few generations back, with cards such as the X1900XTX costing nearly £400, and even recently when nVidia launched the original 192sp 260s for £320 and well over £400 for the original 280s.

Having said that I wouldn't complain if the cards were released at lower prices.

AMG · 2 Sep 2009 at 12:42

I m waiting till next year anyway A. the new tech proves itselfs B. the drivers settle down a bit, if you know what I mean *

* and 3 the games should be out, I m mostly interested in DIRT2 however

and the price should have fallen a bit

Final8y · 2 Sep 2009 at 12:48

straxusii said:
I hope you are right and that ATI agree with you but I don't, I think ATI will make more money selling the 5870 for £285 at launch rather than £225.

Its simple, its a fact that the most money is made on the mid to low end cards, not because they are mid to low end cards but because of the mid to low end price.

Out of thin air example: for every highend card that sells at £250= £250 they will sell 30 midend cards at £150=£4500.

Putting the price up of the high end to £300 increases the ratio from 1/30 like above to 1/50 £300 highend=£300 they will sell 50 midend cards at £150=£7500.

Put the price at £200 highend or below =1/10 midend £150

Also ATI is competing with the market share of NV, even tho NV may not have a competing product out for a few months & there is no better time to try and gain market share with good prices to entice an NV customer when NV has nothing to offer & they want to buy a product now, price it too high & more people will wait to see what NV has to offer.

Even ATI is competing with itself, even tho people know the new gen is only months away they are still buying the 4xxxx because the price is so good. its all about the price for what you are getting.

Someone who normally only paid £150 for a gfx card may look & say OMG for £200 i can have my first high end card which used to cost £300-£400 traditionally, bargain! what hell ill take it , takes it home pleased he can max out most games unlike before & he is hooked to buy highened again next time if the price is right.

Not everyone is born an enthusiast who will pay no matter what, some have to be bred.

ashmanuk67 · 2 Sep 2009 at 12:58

Well said straxusii

Would Nvidia not charge more than £285 if they had the market to themselves was there not a point when cards was around £600-£700 at launch ? for the high-end.....
:confused:

manic111 · 2 Sep 2009 at 13:00

Hmph, if the 5850 launches over £175 or so I'll be picking up a cheap 4890 instead.

Dauthi · 2 Sep 2009 at 13:02

Final8y said:
Also ATI is competing with the market share of NV, even tho NV may not have a competing product out for a few months & there is no better time to try and gain market share with good prices to entice an NV customer when NV has nothing to offer & they want to buy a product now, price it too high & more people will wait to see what NV has to offer.

Even ATI is competing with itself, even tho people know the new gen is only months away they are still buying the 4xxxx because the price is so good. its all about the price for what you are getting.

Not everyone is born an enthusiast who will pay no matter what, some have to be bred.

+1
All in all market share must be there one of their top prio
I'd agree they will probably want better margins than on the 4800's as there is no direct commpetition but still think £285 is too much.