Why GPU prices are NOT likely to drop significantly EVER!

[rumple9]

Now Nvidia/AMD have seen ppl will pay any price for a gfx card, prices will remain high forever. The time of the £500 high end gfx card has gone for good.

Interestingly when the 3080 was launched last September Tom at Mooreslawisdead called it and did a video on 12/9/20 saying the $699 launch was just a marketing trick often used in the automotive industry - "scarcity by design" allowing supply and demand to inflate prices, only a few FE cards would be sold at that loss leader price, and the real price would be significantly higher.

video here

 

[gpuerrilla]

Ohh I'm sure they will and give them rebates for making sure they don't stock AMD or Nvidia GPUS or build them into prebuilds. Intel's behaviour in the PC market is famous for all the tricks they pulled and how they control companies to supply their hardware even if it costs them money.

EVGA as a recent example has gone back to making AMD motherboards, when was last time they did that a decade and a half ago ? Guess why because Intel paid them to do that and same with DELL was famous for it and many other companies that took rebates and bribes to keep AMD out of their systems.

Precisely..! Then we get folk championing them and saying they will be good for the space!

Well be ready to be disappointed when Intel launch DG2, because it will not be anything more than a basic mid range card at Intel prices.

With intel drivers, and a few years of ironing out all the bugs they will need a good team not just a hardware play lab.

Now Nvidia/AMD have seen ppl will pay any price for a gfx card, prices will remain high forever. The time of the £500 high end gfx card has gone for good.

Sadly I think you a correct. I had a chat with @CAT-THE-FIFTH a long time back on same discussion, its grim when I used to think £300 for a 7990 and it came with a PSU was a reasonable price for a beefy GPU. Cant excuse 'inflation' and 'reasons' no matter how much of a spin doctor you are!!

 

[Woodsta888]

its grim when I used to think £300 for a 7990 and it came with a PSU was a reasonable price for a beefy GPU. Cant excuse 'inflation' and 'reasons' no matter how much of a spin doctor you are!!

7990's were a £500+ card on release I think? Mine was £535 and they sent me the Ghz edition by accident.

 

[gpuerrilla]

7990's were a £500+ card on release I think? Mine was £535 and they sent me the Ghz edition by accident.

I recall getting it around the 290X release, as it eventually got RMA'd I took the 290X they offered as replacement but it was not much over £300 and it came with an XFX PSU. Up until that point I didnt really buy the top tier GPU's I would have paid typically £150 for one.

 

[KompuKare]

No, it really isn't. AMD has always had only a small percentage of the GPU market. And you are just assuming that intel will be rubbish. No disrespect, but I would rather wait and see than listen to guesswork ( no matter which way that leans ).

Always?

Their share is really low the last few years but even if the average over the last two decades is only 30% I cannot see how that could ever be described as 'only a small percentage'.

 

[CuriousTomCat]

Sadly I think you a correct. I had a chat with @CAT-THE-FIFTH a long time back on same discussion, its grim when I used to think £300 for a 7990 and it came with a PSU was a reasonable price for a beefy GPU. Cant excuse 'inflation' and 'reasons' no matter how much of a spin doctor you are!!

In 2013 when the 7990 was released, Nvidia was spending just $1,147 million on R&D. This year, Nvidia are spending $3,924 million. That`s an increase of 242.11%.

Current GPU`s are far more expensive to make than they ever used to be. It`s an order of magnitude above `inflation`. Nvidia and AMD need to recoup that money back.

 

[gpuerrilla]

In 2013 when the 7990 was released, Nvidia was spending just $1,147 million on R&D. This year, Nvidia are spending $3,924. That`s an increase of 242.11%.

Current GPU`s are far more expensive to make than they ever used to be. It`s an order of magnitude above `inflation`. Nvidia and AMD need to recoup that money back.

Its an honest point. But in my book, you dont have to throw money at the problem to excuse the expense. Your giving them a bye ball not making an effort throwing away money. "We are spending XXXXXXX so you must spend this on our product" is actually in business terms - we ****** up so please cover the costs IMO.

R&D used to be a segment justifying costs. For example making headway into AI and driverless cars does not mean lets pretend this tech is for gamers to cover the cost - but thats my take on it..

Also how can you compare an expense AMD had in 2013 then plant nvidias spending in to switch the narrative? Surely you should present the AMD expense to prove a point?

 

[KompuKare]

Nvidia and AMD need to recoup that money back.

On the other hand, there would be two strategies to recoup R&D:

1. Sell at ever higher prices to get a higher profit per item.
   
2. Sell at the same or lower prices, get less per item but manner up for that with far higher volumes.

Obviously, currently there are genuine supply issues so increasing volumes is not possible.
But at normal times when that isn't the case, the two strategies could lead to different results.

1. Might lead to a perception of being a premier product a la Apple. Will eventually shrink the market possibly killing the PC gaming market if porting from consoles is too much work.
2. Might erodee brand as the parts are bought the rabble. Should grow the market, making PC gaming more attractive.

Approach #2 doesn't actually prevent selling lower volume premier cards as well.
Approach #1 might kill the PC gaming market in the longer term, which would mean, for example, Nvidia could no longer spread out there cost of features developed for their other markets (like tensor units) by including them in gaming cards.
I'm sure there are other differences between the two strategies, but to me it seems that the high prices strategy would suit the usual corporate short-termism and eventually kill the PC gaming golden egg.

 

[Harold lloyd]

On the other hand, there would be two strategies to recoup R&D:

1. Sell at ever higher prices to get a higher profit per item.
   
2. Sell at the same or lower prices, get less per item but manner up for that with far higher volumes.

Obviously, currently there are genuine supply issues so increasing volumes is not possible.
But at normal times when that isn't the case, the two strategies could lead to different results.

1. Might lead to a perception of being a premier product a la Apple. Will eventually shrink the market possibly killing the PC gaming market if porting from consoles is too much work.
2. Might erodee brand as the parts are bought the rabble. Should grow the market, making PC gaming more attractive.

Approach #2 doesn't actually prevent selling lower volume premier cards as well.
Approach #1 might kill the PC gaming market in the longer term, which would mean, for example, Nvidia could no longer spread out there cost of features developed for their other markets (like tensor units) by including them in gaming cards.
I'm sure there are other differences between the two strategies, but to me it seems that the high prices strategy would suit the usual corporate short-termism and eventually kill the PC gaming golden egg.

1. You're right AMD/NVIDIA want high sales and repeat customers so want to sell *CHEAPLY* as possible so people keep buying for years down the road.
2. BUT the market has got a *HOLD* and will push prices around as it sees fit, so even though AMD/NVIDIA don't want to kill the PC gaming golden egg its out of their hands.
3. REMEMBER the market is huge like the sea, its bigger than governments and central banks and that's what your seeing in action now.

 

[g67575]

Supply will improve significantly, demand will fall (Ethereum mining is ending this year) and so prices will be close to reference model RRP prices (within 0-10%). It's that simple, it just takes time and patience.

We have already seen used graphics card prices fall on websites like CEX.

The Series S console has been readily available for months (which has a reasonable GPU).

Plus, Nvidia Graphics cards with more VRAM will be available next year, so it will be an all round better time to buy.

You seem very eager to claim prices will remain high forever, what is the benefit of buying right now though?

 

[pp111]

Always?

Their share is really low the last few years but even if the average over the last two decades is only 30% I cannot see how that could ever be described as 'only a small percentage'.

I think your graph shows exactly the opposite of what you are trying to prove here. I would call 23% a small percentage.

 

[clone]

Thought I try a little experiment, I've watched a few cards on the Bay and I'm getting offers thick and fast to buy them, seen a few come down by quite a bit but I'll never buy one as I'm after one with a warranty as they do cost to much money for now.

 

[Chuk_Chuk]

In 2013 when the 7990 was released, Nvidia was spending just $1,147 million on R&D. This year, Nvidia are spending $3,924 million. That`s an increase of 242.11%.

Current GPU`s are far more expensive to make than they ever used to be. It`s an order of magnitude above `inflation`. Nvidia and AMD need to recoup that money back.

R&D in what? Did the financial report state that this is exclusively the cost of developing GPUs (which ones for that matter) or does this include the cost of all the other pies Nvidia has their finger in?

Also I thought the market increased in size as well?

 

[KompuKare]

I think your graph shows exactly the opposite of what you are trying to prove here. I would call 23% a small percentage.

I did reply to your use of the word always, and did say their share is very low the last few years. But since there was a time they had more than 50% and others where they 40% I cannot see how your use of the word always was accurate.

 

[Dogeared]

Thought I try a little experiment, I've watched a few cards on the Bay and I'm getting offers thick and fast to buy them, seen a few come down by quite a bit but I'll never buy one as I'm after one with a warranty as they do cost to much money for now.

There's stock all over the place now.

I note the big Indian restaurant shop are finally showing stock of 3070's and 3060's on their website - lol, but not at the prices they have listed for the out of stock products, they are all double MSRP like everywhere else.

Tide is turning however, I'll be holding out for a long while yet.

 

[Zarax]

German lower-priced stock is running out though, I suspect there will be some minor bounces but the trend seems to be going down.
BTW, miners finally figured out how to use consoles (at least according to videocardz), so the pain is going to get shared this time...

 

[0h_no_not_again]

R&D in what? Did the financial report state that this is exclusively the cost of developing GPUs (which ones for that matter) or does this include the cost of all the other pies Nvidia has their finger in?

Also I thought the market increased in size as well?

That is all pies, and off the top of my head, there will be a ton:

• Machine Learning, AI, etc (NVidia are the biggest in the business)
• Graphics libraries, techniques, technologies
• GPU & computing hardware
• Future direction - modelling, simulation, prototyping, etc
• Drivers & User Software

Note that NVidia have excellent margin and net profit despite lots of R&D. I mean, their margin is absolutely insane. They could easily reduce the prices of their products, although I would guess most margin comes from the enterprise segment and not home users.

 

[KompuKare]

German lower-priced stock is running out though, I suspect there will be some minor bounces but the trend seems to be going down.
BTW, miners finally figured out how to use consoles (at least according to videocardz), so the pain is going to get shared this time...

I only heard about PS4 usage by Ukrainian miners. Hacking and cracking the PS4 which is nearly 8 years old is one thing. I would be more worried if someone managed to crack PS5 or XBX without insider knowledge.

 

[Zarax]

I only heard about PS4 usage by Ukrainian miners. Hacking and cracking the PS4 which is nearly 8 years old is one thing. I would be more worried if someone managed to crack PS5 or XBX without insider knowledge.

Yes, it was PS4 indeed: https://videocardz.com/newz/ukraini...-mining-farm-with-3800-playstation-4-consoles

 

[Zsolt Szabo]

Prices already dropping