Caporegime
Given the current state of the GPU market i have been thinking a lot about this lately.
I'm inspired to some extent to make this post by this video, which makes many good and valid points but its conclusion seems to be born out of complete denial of what's been happening for at least a decade.
I will try to condense this down as much as i can as i don't want people to be put off by a wall of text. So please excuse the short handed nature of it.
He is right, IMO, that AMD have no interest in competing for market share, or rather perhaps they lack the confidence to try, they have no reason to believe it would work for them, but plenty of reasons to believe it wouldn't, they have been steadily loosing market share for a decade + despite during that time having tried to compete for that market share.
These are not exacting figures, so without watching the video again to get those this is close enough.
AMD segment their revenue result reports, one of those is gaming, it consist of GPU's and Consoles.
AMD's 2022 revenue for the "Gaming" segment was about $6.5 Billion, $3.5 Billion of that was from Sony, consoles like the PS5, about $2 Billion of that was from Microsoft, the XBox, the remaining $1.5 Billion was from GPU's and other assorted consoles, like the Steam Deck and its clones, so probably about $1 Billion revenue for the whole of 2022 for GPU's.
That's nothing, for a total revenue for that year of about $24 Billion, its about 4% of AMD's revenue, and that's revenue, not profit, this matters because developing GPU's is very expensive, the profit margins for that $6.5 Billion on the Gaming segment was less than $1 Billion, about 16%, if those are the margins for the GPU's that is $160 Million profit on GPU's for 2022.
If it costs $500 Million per year to keep up development for your GPU's then AMD are losing $350 Million per year to stay in this game, Intel spent $3.5 Billion over 3 or 4 years on ARC, and it is under developed, so i don't know how much AMD spend on GPU R&D but i'm willing to bet the consoles and Ryzen are propping it up heavily.
How much longer are AMD willing to go on with that and can they even invest more to fight Nvidia harder? AND do not want to take away R&D from where they are successful, they can't do it all and they have to stay ahead of the curve in the segments they are winning.
Its also about volume, the irony is that if AMD had 25 or 30% market share they would be better placed to fight Nvidia, because they would be selling a lot more GPU's than they actually are, so brining in more money and with that the task would be less extreme and difficult than it actually is.
That low volume also presents another problem, because it costs so much to develop them, and you sell so few you have no room to reduce your margins, you almost have to make it low volume high margin or you're just burning money keeping up with the R&D cycle.
So its no good saying AMD have to be 30% cheaper than Nvidia because RT isn't as good and they don't have DLSS, if that's how you see it good luck to you as Nvidia have you right where they want you, at that there is no point in AMD being in this game at all as they don't have the market share for low margins,
So, its up to us, it always has been, and tech tubers need to get angry at Nvidia instead of sighing and moaning that AMD aren't cheaper to make Nvidia cheaper, that being your reason for existing is exactly what did ATI in and it was AMD who bailed them out, so they aren't going to go down that road, if you don't buy them they will just stop making them and probably be glad of it.
AMD are a business, they will make decisions that are best for them, if they think they can get from 8% to 50% market share by being significantly cheaper than Nvidia, that is what they will do. In the same way that if Nvidia think they can maintain 90% market share with £1300 ##80 class cards that are really ##70 class cards.... that is exactly what they will do.
As for Intel, IMO they have realised they do not want to get tied up like AMD have in this massive mindshare monster that is Nvidia, and that is something we created. Yes putting someone on a very very high pedestal just gives them grater hight to spit on you, Nvidia feel absolutely untouchable, like they can do no wrong, because where else are you going to go? AMD? Yeah didn't think so...
Honestly i don't know why AMD don't just throw in the towel, i think if it wasn't for the consoles they would, irronically, but the fact that they are still in this game, despite everything perhaps indicated that on some level they do care.
I'm inspired to some extent to make this post by this video, which makes many good and valid points but its conclusion seems to be born out of complete denial of what's been happening for at least a decade.
I will try to condense this down as much as i can as i don't want people to be put off by a wall of text. So please excuse the short handed nature of it.
He is right, IMO, that AMD have no interest in competing for market share, or rather perhaps they lack the confidence to try, they have no reason to believe it would work for them, but plenty of reasons to believe it wouldn't, they have been steadily loosing market share for a decade + despite during that time having tried to compete for that market share.
These are not exacting figures, so without watching the video again to get those this is close enough.
AMD segment their revenue result reports, one of those is gaming, it consist of GPU's and Consoles.
AMD's 2022 revenue for the "Gaming" segment was about $6.5 Billion, $3.5 Billion of that was from Sony, consoles like the PS5, about $2 Billion of that was from Microsoft, the XBox, the remaining $1.5 Billion was from GPU's and other assorted consoles, like the Steam Deck and its clones, so probably about $1 Billion revenue for the whole of 2022 for GPU's.
That's nothing, for a total revenue for that year of about $24 Billion, its about 4% of AMD's revenue, and that's revenue, not profit, this matters because developing GPU's is very expensive, the profit margins for that $6.5 Billion on the Gaming segment was less than $1 Billion, about 16%, if those are the margins for the GPU's that is $160 Million profit on GPU's for 2022.
If it costs $500 Million per year to keep up development for your GPU's then AMD are losing $350 Million per year to stay in this game, Intel spent $3.5 Billion over 3 or 4 years on ARC, and it is under developed, so i don't know how much AMD spend on GPU R&D but i'm willing to bet the consoles and Ryzen are propping it up heavily.
How much longer are AMD willing to go on with that and can they even invest more to fight Nvidia harder? AND do not want to take away R&D from where they are successful, they can't do it all and they have to stay ahead of the curve in the segments they are winning.
Its also about volume, the irony is that if AMD had 25 or 30% market share they would be better placed to fight Nvidia, because they would be selling a lot more GPU's than they actually are, so brining in more money and with that the task would be less extreme and difficult than it actually is.
That low volume also presents another problem, because it costs so much to develop them, and you sell so few you have no room to reduce your margins, you almost have to make it low volume high margin or you're just burning money keeping up with the R&D cycle.
So its no good saying AMD have to be 30% cheaper than Nvidia because RT isn't as good and they don't have DLSS, if that's how you see it good luck to you as Nvidia have you right where they want you, at that there is no point in AMD being in this game at all as they don't have the market share for low margins,
So, its up to us, it always has been, and tech tubers need to get angry at Nvidia instead of sighing and moaning that AMD aren't cheaper to make Nvidia cheaper, that being your reason for existing is exactly what did ATI in and it was AMD who bailed them out, so they aren't going to go down that road, if you don't buy them they will just stop making them and probably be glad of it.
AMD are a business, they will make decisions that are best for them, if they think they can get from 8% to 50% market share by being significantly cheaper than Nvidia, that is what they will do. In the same way that if Nvidia think they can maintain 90% market share with £1300 ##80 class cards that are really ##70 class cards.... that is exactly what they will do.
As for Intel, IMO they have realised they do not want to get tied up like AMD have in this massive mindshare monster that is Nvidia, and that is something we created. Yes putting someone on a very very high pedestal just gives them grater hight to spit on you, Nvidia feel absolutely untouchable, like they can do no wrong, because where else are you going to go? AMD? Yeah didn't think so...
Honestly i don't know why AMD don't just throw in the towel, i think if it wasn't for the consoles they would, irronically, but the fact that they are still in this game, despite everything perhaps indicated that on some level they do care.
A slight digression from this but i have noticed inexplicable frustration from a lot of reviewers reviewing AMD latest CPU's, ranting about things that have been going on for years just to put a negative slant on what should be a positive for AMD. complaining about existing trends that AMD are only starting to follow because no one has ever complained about it when AMD wasn't competitive, now that AMD are they seem upset about that, perhaps because while AMD's boot is on Intel's neck they are not helping reign Nvidia in, as if that's AMD's job, not these same tech journalists who seem to go out of their way as to not upset Nvidia too much.
When you farm out your own responsibilities what you get is what we now have. My own rant over, sorry
When you farm out your own responsibilities what you get is what we now have. My own rant over, sorry
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that's not a lack of bandwidth, its a lack of VRam, this slide has done the rounds for an entirely different reason, look at all the 8GB cards....