GPU prices

[Bantu]

Enthusiast Cars, Top End Food and the "top" brands for "other hobbies" are not getting cheaper (e.g. arcteryx for outer wear is just getting more and more expensive).

The bottom end of the market is getting cheaper, but the top end is making up for it. The only difference in graphics cards is the high barriers to entry keep out new competitors. The costs of fab time and chip design are too high for any new entrants without significant backing.

 

[HRL]

Apart from the Titan line of cards, I don't think they have really. For example the 8800gtx launched in 2006 was $599. The 280GTX launch price was $649. The 980Ti launch price as a comparison was $649 and the 1080 reference RRP is $599 etc

The major thing that has changed is the dwindling value of our currency. In 2006 and 2007 for example, it was ~ 2 dollars for each pound! A few years ago when the 900 series came out it was 1.6 dollars to the pound...

Now it is 1.30...

Pretty much the major reason for gpu prices rising over the last ten years here has been our currency, not Nvidia's pricing (which has stayed relatively equal (give or take 50 dollars) for the last 10 years or so.)

http://finance.yahoo.com/quote/GBPUSD=X/news

I know what you're saying but the 1080 with a RRP of $599 is still over £600.

The £ is not currently worth 1:1 with the $, but the prices sure don't reflect that. As I said earlier, it's the only reason I gave up PC gaming years ago.

It's why I've gone for the "budget" Sapphire Nitro 480 to get back into PC gaming. Would love a 1080 but flatly refuse to pay the GPU/NV/AMD tax.

 

[Seanspeed]

I know what you're saying but the 1080 with a RRP of $599 is still over £600.

The £ is not currently worth 1:1 with the $, but the prices sure don't reflect that.

20% VAT included in £ pricing, dont forget. And that's comparing with a non-taxed $ price.

 

[Griffildur]

Enthusiast Cars, Top End Food and the "top" brands for "other hobbies" are not getting cheaper (e.g. arcteryx for outer wear is just getting more and more expensive).

The bottom end of the market is getting cheaper, but the top end is making up for it. The only difference in graphics cards is the high barriers to entry keep out new competitors. The costs of fab time and chip design are too high for any new entrants without significant backing.

that is true. Even if the lower priced things do sell a lot more, they still won't achieve the same numbers for items which cost a lot more and sell a lot less volume. It is what it is. Nvidia would not bother to make high end cards if no one bought them.

I do wish there was more competition, AMD is somewhat trying to put up a front which looks like fight but it's not enough. We do need more competitors not only in the GPU field but also CPU one as well.

 

[joeyjojo]

20% VAT included in £ pricing, dont forget. And that's comparing with a non-taxed $ price.

Indeed, Gibbo specifically addressed this point and other factors.

https://forums.overclockers.co.uk/showpost.php?p=29742287&postcount=359

 

[Greebo]

I'm sure they'll sell some.

But this thinking that everybody who buys a £600+ GPU has unlimited pockets and will pay absolutely anything is not right.

This may very well hurt Nvidia's sales. And there's not much they can do about it except moan about the sorry state of the UK market the voters put the country in.

When sales of their top gaming cards to enthusiast is probably 1% or even 0.5% of their business, does it matter?

Lets say they increase the price and make double the profit but sell half as many. Same profit for them.

 

[davecarter]

A 980 ti is looking more and more tempting by the day

 

[beany_bot]

Nvidia would not bother to make high end cards if no one bought them.

Yes they would. They would just lower the price of them till people did buy them. And yes they would probably make £9,000,000 profit instead of £11,000,000.

Trust me, they would still do it.

 

[Seanspeed]

When sales of their top gaming cards to enthusiast is probably 1% or even 0.5% of their business, does it matter?

Lets say they increase the price and make double the profit but sell half as many. Same profit for them.

But it's extremely unlikely that the odds are in their favor with this balance. You need to make a *significantly* higher profit to offset significant drop in sales. Yet once you've already reached a notable cut-off point in price for potential buyers, you will then likely see an exponential loss in sales the higher you price it. Meaning the balance is going to work against you and result in lower revenue at the end of the day.

You're also underestimating the market size of upper mid range/high end cards. It may not make up the majority of their sales, but it is still a significant part of them and not some piddly 1% or whatever.

 

[beany_bot]

Lets say they increase the price and make double the profit but sell half as many. Same profit for them.

Same profit. But not as many customers, not as much brand loyalty, not as much scope for product life extension. Not as much future sales Not as good business.

Twice the cards at half the price is much better business than the reverse.

Nvidia aren't loosing customers with their price hikes (yet). Because people are willing to pay it...


Etc.

 

[Griffildur]

Yes they would. They would just lower the price of them till people did buy them. And yes they would probably make £9,000,000 profit instead of £11,000,000.

Trust me, they would still do it.

What do you expect of a company? To not sell anything? If prices go down we all benefit, they just need to find the right level at which they sell sufficient numbers and that's fair enough, isn't it?

 

[Seanspeed]

Yes they would. They would just lower the price of them till people did buy them. And yes they would probably make £9,000,000 profit instead of £11,000,000.

Trust me, they would still do it.

You realize that profit margins have a cut-off point, right? And that selling a $500 card doesn't equal $500 profit? If they make $50 on a $500 card, then that's $50 profit, yea?

So let's say they reduce price to $475, a mere $25 discount, but it also only means $25 profit. A full 50% reduction in profits just for that mere $25 discount on a $500 product.

You see where this is going? Thinking that you can just lower prices forever til people buy the product and then assuming that you're only going to see a 15% reduction in profits is unbelievable inaccurate.

 

[davecarter]

I have finally taken the plunge on an MSI Gaming X at a rival before prices get even more ridiculous, only about £10 over my previous limit so very happy now I can stop worrying about ever increasing prices (until i want to SLI that is)

 

[efish]

Of course there's a breaking point. And we'll have nobody but ourselves to blame for it(well......not me, but 'the people'). It wont be businesses' fault.

Prices have reached breaking point for me. I saved to get a high end card, some high end keyboards and a laptop, instead I bought a mid end- one for £400 rejected paying £140 for a keyboard.

Put the money to better use somewhere else

Last time I save for gear like this I can no longer justify paying this kind of money for kit.

Not a fun buying experience anymore, rather than enjoying spending some hard saved cash this has been a real drag.

No more saving and dreaming of high end kit for me.

Buying new kit should be one of life's more enjoyable moments, this has just been frustrating.

Mr budget gamer from now on for me.

 

[Seanspeed]

Remainers tend to conveniently forget this, that the weaker pound can actually help reduce our balance of payments deficit and make us more competitive internationally.

Ah of course! The Leave supporters had this all perfectly planned out and knew exactly what they were doing. Clearly all the hubbub about the pound hopefully recovering was just bluster as the REAL plan was to purposefully destroy the value of our currency in order to help exports and reduce the deficit! And obviously now we see that Leave supporters are going to save us all, the plan should now be to maintain a destroyed value in the currency for the next couple decades so we can slowly chip away at that deficit.

Prices have reached breaking point for me.

I hear ya. I had planned on upgrading to a new GPU this year and have decided against it.

Problem is - it could get worse going forward.

Really lousy situation.

 

[dits]

At what point does rising GPU prices become an extortion racket?

 

[Razor Time]

Here is an interesting chart showing how much it costs to manufacture a gpu. The table is for older cards but will give some indication as to costs involved.

 

[CAT-THE-FIFTH]

Saw this on Hexus:

http://hexus.net/business/news/econ...eases-uk-pricing-10-per-cent-due-gbp-decline/

GBP heading to dollar parity?

Depending upon your news source, the value of the GBP will fall quite a bit further as we get closer to triggering Article 50. Goldman Sachs has warned GBP is heading to $1.20. More pessimistically, Mohamed El-Erian, the chief economic adviser to investment giant Allianz, says that the GBP could fall in value to parity with the USD until a credible EU trade agreement for British firms is at least drawn up.

 

[Greebo]

But it's extremely unlikely that the odds are in their favor with this balance. You need to make a *significantly* higher profit to offset significant drop in sales. Yet once you've already reached a notable cut-off point in price for potential buyers, you will then likely see an exponential loss in sales the higher you price it. Meaning the balance is going to work against you and result in lower revenue at the end of the day.

You're also underestimating the market size of upper mid range/high end cards. It may not make up the majority of their sales, but it is still a significant part of them and not some piddly 1% or whatever.

But at the moment we are only talking about the UK enthusiast so maybe 1% of 1% of your customers.

If that shrinks in half its not going to affect you very much.

And no I am not underestimating the sales. fact is the huge majority of cards sold are low/mid range cards especially to system builders etc. Check the steam hardware surveys and stuff.

Nvidia sold over 34m discreet gfx cards in 2014. How many of them do you think were 980s?

In fact out of 50m discreet graphic cards sold of all brands that year, only 2.9m were mid to high end cards.

 

[Greebo]

Same profit. But not as many customers, not as much brand loyalty, not as much scope for product life extension. Not as much future sales Not as good business.

Twice the cards at half the price is much better business than the reverse.

Nvidia aren't loosing customers with their price hikes (yet). Because people are willing to pay it...


Etc.

And it matters if you have no competition in that sector?

Plus again its exchange rate for one country. Why sell at a loss in that country just to keep your customers happy?