I'm sure some of you are already aware, but over the last several months, Nvidia and AMD both came out with the next generation of video cards, whose performance takes a great leap forward. Coupled with that, the prices for the cards stayed the same or even went down, so the performance/dollar ratio overall skyrocketed with the new generation. That's a great deal, right?
Yes, it is, and many people thought the same thing. So many people in fact that these cards have been out of stock pretty much constantly for many months now. If you're really jonesing for a new video card, you have to go to some sketchy neighborhood and buy it from a scalper in a dark alley, or keep hitting refresh on Newegg and hope you get lucky.
My question is, why the fuck did it have to be this way? If Nvidia and AMD have such a hot commodity, why in the world would they set the prices so low that you can't actually buy one legitimately? Why would they give away so much profit to the scalpers when it seems like people would be happy to hand it to them? It seems like a simple Econ 101 situation here, but I must be missing something. What is it?
They are competing for market share not short term profits. AMD wants to eat Nvidia's lunch and Nvidia wants to keep its market.
Quote from: crazy canuck on February 02, 2021, 02:15:23 PM
They are competing for market share not short term profits. AMD wants to eat Nvidia's lunch and Nvidia wants to keep its market.
How does it help your market share to sell out your inventory for a low price when you can sell out your inventory for a bigger price?
Video cards have a significant OEM business (and we've just had a new generation of consoles being released). I presume that they can't/won't price consumer cards exponentially higher than cards they are selling to be integrated into other devices.
Plus nVidia and AMD have been locked into a fierce competiton for a while.
Didn't you start a thread almost exactly like this like 10 years ago?
My uneducated guess it they set a price that will maximize profit over the life of the card. They feel they can't set a premium price for early adopters (you) and then drop the price for everyday use.
I think there's a kind of first mover disadvantage going on.
If, say, NVidia upped their prices that would leave AMD as having the more desirable card and would let AMD sell as many cards as they can make. If they colluded and both raised prices at the same time that would go away - but of course that would be illegal.
You know they both have scalper divisions, right?
The simplest explanation is that they miscalibrated demand. They might be able to squeeze out some profit by raising unit prices but at the cost of tainting the brand with accusations of price gouging.
I should get a new card, it's the weakest part of my pc :hmm:
Who rules atm, AMD or Nvidia?
Quote from: The Minsky Moment on February 02, 2021, 02:29:20 PM
The simplest explanation is that they miscalibrated demand. They might be able to squeeze out some profit by raising unit prices but at the cost of tainting the brand with accusations of price gouging.
Pretty sure I read these scalper stories every time they release a new generation of cards (production takes a while to ramp up so supply on release is usually very small while demand is very high). Now, I agree that they probably don't want to be accused of price gouging just for a quick buck, given that they will be producing and selling these cards for a good few years.
Quote from: DGuller on February 02, 2021, 02:17:07 PM
Quote from: crazy canuck on February 02, 2021, 02:15:23 PM
They are competing for market share not short term profits. AMD wants to eat Nvidia's lunch and Nvidia wants to keep its market.
How does it help your market share to sell out your inventory for a low price when you can sell out your inventory for a bigger price?
Having a higher price would not increase the amount in inventory available. This is a manufacturing problem.
Quote from: crazy canuck on February 02, 2021, 02:45:49 PM
Quote from: DGuller on February 02, 2021, 02:17:07 PM
Quote from: crazy canuck on February 02, 2021, 02:15:23 PM
They are competing for market share not short term profits. AMD wants to eat Nvidia's lunch and Nvidia wants to keep its market.
How does it help your market share to sell out your inventory for a low price when you can sell out your inventory for a bigger price?
Having a higher price would not increase the amount in inventory available. This is a manufacturing problem.
What I'm saying is that if Nvidia and AMD sell every card that they can produce, then they can't change their market share. Their market share is whatever share of video cards they manage to produce. You can only change your market share by pricing if you're not selling out every card that you can possibly produce. Selling out 100,000 of your video cards at $500 doesn't increase your market share compared to selling out 100,000 of your video cards at $800.
Quote from: DGuller on February 02, 2021, 03:06:39 PM
Quote from: crazy canuck on February 02, 2021, 02:45:49 PM
Quote from: DGuller on February 02, 2021, 02:17:07 PM
Quote from: crazy canuck on February 02, 2021, 02:15:23 PM
They are competing for market share not short term profits. AMD wants to eat Nvidia's lunch and Nvidia wants to keep its market.
How does it help your market share to sell out your inventory for a low price when you can sell out your inventory for a bigger price?
Having a higher price would not increase the amount in inventory available. This is a manufacturing problem.
What I'm saying is that if Nvidia and AMD sell every card that they can produce, then they can't change their market share. Their market share is whatever share of video cards they manage to produce. You can only change your market share by pricing if you're not selling out every card that you can possibly produce. Selling out 100,000 of your video cards at $500 doesn't increase your market share compared to selling out 100,000 of your video cards at $800.
If they increase their price and the other does not then purchasers, who have to wait anyway, will order and wait for the lower priced product. AMD is going after Nvidia's market share, they are not going to achieve that buy letting Nvidia price their product lower. And Nvidia won't willingly let AMD in by making their product more expensive.
Quote from: Maladict on February 02, 2021, 02:30:05 PM
I should get a new card, it's the weakest part of my pc :hmm:
Who rules atm, AMD or Nvidia?
ATM, the screens that come with them aren't very good, but the other functionality is awesome.
Quote from: crazy canuck on February 02, 2021, 03:10:19 PM
If they increase their price and the other does not then purchasers, who have to wait anyway, will order and wait for the lower priced product. AMD is going after Nvidia's market share, they are not going to achieve that buy letting Nvidia price their product lower. And Nvidia won't willingly let AMD in by making their product more expensive.
You can lower the price later, once the pent up demand stops overpowering your production capacity.
I guess the answer that some people gave here, that card makers don't want to appear to be charging extra to their early adopters, and would prefer to send them to the scalpers instead, makes the most sense.
To answer your initial question - it is probably because of some kind of magic.
Quote from: PDH on February 02, 2021, 08:58:21 PM
To answer your initial question - it is probably because of some kind of magic.
That's your answer for everything. :rolleyes:
At this point, it really is incumbent upon the governments of the world to ensure every family has a GTX 3080. I can't emphasize this enough. It's a basic human necessity to game at 120 fps, 4k resolution.
Quote from: The Minsky Moment on February 02, 2021, 02:29:20 PM
The simplest explanation is that they miscalibrated demand. They might be able to squeeze out some profit by raising unit prices but at the cost of tainting the brand with accusations of price gouging.
Covid happened, in tandem with that.
That reduced their manufacturing capabilities. In the case of AMD, it's even direr, since their new GPU and new CPUs are now killing it.
The 1st generation Ryzen have been outperforming Intel for half the price since day 1, only the very top of the line CPUs were able to compete, and lots of people were still afraid to buy AMD instead of Intel. As of last summer, major OEMs were gunning for Intel. Trying to find a decent AMD laptop was mission impossible. Then it started changing by late summer/early fall. AMD started killing it in the laptop department, even if most system were typically "lower budget" than Intel's equivalent offer (meaning, overall less performing hardware, few Ryzen 7 or Ryzen 5, mostly Ryzen 3 available, and often with 4gb/8gb at most, no SSD). People who wanted a performance laptop went Intel.
But with the pandemic dragging on, I guess two things happened:
a) AMD's supply lines are stretched thin. They don't have that big a manufacturing capacity to begin with, covid has reduced their capacity. Both Ryzens and their new GPU use the same manufacturing processing.
b) People are weary of buying pricey hardware, they turn toward AMD, suddenly, they not only have the better hardware, they have the demand that comes with it. It leads to a rise in enthusiasts interests to buy AMD products. Combined with lots of positive reviews, from people who usually snob AMD. Reduced capacity + increased interests = no stock.
Now, let's say you are AMD. Viper37 wants the latest Radeon 6800XT. Dell wants 50 000 AMD Ryzen 5 5600HS. Guess who's gonna get it first? Hence why we have trouble finding it.
As to the price question, simply because they ain't an oligopoly, as already pointed. Nvidia does not want to lose market shares, AMD wants to gain market shares. AMD has sold it's card for less than Nvidia for years. 80-90% of the performance for half the price. People didn't buy it. "AMD is crap". Now, things are changing. AMD is pricing its cards similar to the previous generation, Nvidia wanted to cut the grass from under their feet with their 3080, they priced it for less than the 2080. It worked.
I don't think AMD is selling that much video card, but in the mobile market, they really,really,really need to increase their supply. Hence the reduced stocks for the video cards, dedicated to end users.
Also, Nvidia and AMD do not have "scalper divisions". They do not sell to consumers, they sell to resellers (CPUs) and OEMs (GPUs). And the Microsoft and to Sony. Neither Nvidia nor AMD make video boards, other than their own reference board sent to OEMs. OEMs, that's another matter. MSI was caught red handed with a scalper having the same adress as their HQ, even though they tried to deny any knowledge of this E-Bay resseler. Other manufacturers may be smarter about it. ;)
Quote from: FunkMonk on February 02, 2021, 11:42:32 PM
At this point, it really is incumbent upon the governments of the world to ensure every family has a GTX 3080. I can't emphasize this enough. It's a basic human necessity to game at 120 fps, 4k resolution.
But what about 8k? :(
Quote from: PDH on February 02, 2021, 08:58:21 PM
To answer your initial question - it is probably because of some kind of magic.
Seems some industry don't need as much policing as others ;)
Quote from: DGuller on February 02, 2021, 07:59:00 PM
Quote from: crazy canuck on February 02, 2021, 03:10:19 PM
If they increase their price and the other does not then purchasers, who have to wait anyway, will order and wait for the lower priced product. AMD is going after Nvidia's market share, they are not going to achieve that buy letting Nvidia price their product lower. And Nvidia won't willingly let AMD in by making their product more expensive.
You can lower the price later, once the pent up demand stops overpowering your production capacity.
I guess the answer that some people gave here, that card makers don't want to appear to be charging extra to their early adopters, and would prefer to send them to the scalpers instead, makes the most sense.
Ok, continue thinking that short term profit is the goal.
:unsure:
I'm a pretty good data scientist, and in fact my primary interest in video cards is for data science purposes. However, as good as I am, I still can't find any correlation between my posts and CC's responses to them. It's like I'm talking to a random number generator.
Quote from: DGuller on February 03, 2021, 12:28:57 PM
I'm a pretty good data scientist, and in fact my primary interest in video cards is for data science purposes. However, as good as I am, I still can't find any correlation between my posts and CC's responses to them. It's like I'm talking to a random number generator.
Beta refrigerator sunshine complex. Expose treatment colander floor-wax.
Quote from: DGuller on February 03, 2021, 12:28:57 PM
I'm a pretty good data scientist, and in fact my primary interest in video cards is for data science purposes. However, as good as I am, I still can't find any correlation between my posts and CC's responses to them. It's like I'm talking to a random number generator.
So you're a data scientist? Name all episodes where he has sex.
Quote from: DGuller on February 03, 2021, 12:28:57 PM
I'm a pretty good data scientist, and in fact my primary interest in video cards is for data science purposes. However, as good as I am, I still can't find any correlation between my posts and CC's responses to them. It's like I'm talking to a random number generator.
If you understand that CC is generally more interested in condescending than communicating, you learn to ignore the bulk of his posts as, essentially, nonsense that not even he believes.
I am glad AMD is coming back. Lack of competition sucked.