Market behaviour and pricing strategies for consumer GPUs

Shifty Geezer said:
That seems contrary. If there are loads of examples of nVidia offending consumers, why they now have a 90% market share?
Click to expand...
Because there is no competition in the GPU space? They’re option is buy nvidia who offers the best performance and features or save $50 and buy an amd GPU which has worse features and worse performance. If you amortize the price difference over the length of ownership, the price difference is basically irrelevant? It’s not surprising that 90 percent would choose the better option?
Shifty Geezer said:
I disagree. I see plenty of examples of products with vastly inflated prices these days because consumers have gotten used to paying more. Starbucks has increased in price above inflation to drive bigger profits. Whey protein used to be a cheap by-product of the cheese industry but now it's charged at top dollar with supplements tripling in cost in the UK over a few years.
Click to expand...
Just as there are many examples of products with inflated prices, there are also lots of products with deflated prices since the Covid inflation spike. I think we should stay within the bounds of our discussion which is GPU/electronic prices.
Shifty Geezer said:
Are you suggesting they price their GPUs around cost as a charity? Do the gamers a favour?
Click to expand...
Nope but I think it’s key to highlight a vast difference in pricing strategies.
Shifty Geezer said:
Note I'm not endorsing or justifying 'price gouging'. It's just the way the world is currently operated and I can't see nVidia, or anyone else, choosing to make less money. What would be the decision making process that'd lead them to choose lower profit margins than the biggest the market can tolerate?
Click to expand...
The way Nvidia operates is not the way the world operates at all. Most companies do not operate with a gross margin in excess of 60%. When you compare the price gouging from Nvidia compared to Apple for example, the difference is quite noticeable. Apple is often derided for their excessive pricing and Nvidia makes their pricing strategy look like child’s play.
 
One thing I've never seen Nvidia accused of is underpaying their employees. I may have missed those stories, but my understanding is they attract a lot of talent because their employees are well compensated and are given a lot of agency. I've worked in the tech sector on low-margin products. It's not a place you want to be. Now I'm not saying Nvidia is increasing margins to be altruistic and to look after their employees better, but it is a byproduct for them from what I understand. I do think that Jensen understands you have to keep top talent happy, and part of that is paying them well and allowing them to make decisions. Margins pay for R&D, and a big chunk of that is labour. It also floats their whole ecosystem. Nvidia is as much a software company as a hardware one, and the hardware pays for the software. You don't need to pay for a CUDA license or anything, as far as I know. Nvidia has basically crushed their competition in the pc space, so there's no real incentive for them to lower prices unless their market share starts to decrease.
 
Boss said:
Because there is no competition in the GPU space? They’re option is buy nvidia who offers the best performance and features or save $50 and buy an amd GPU which has worse features and worse performance. If you amortize the price difference over the length of ownership, the price difference is basically irrelevant? It’s not surprising that 90 percent would choose the better option?
Click to expand...

They have the option to not buy anything. They’re choosing to give Nvidia money even though they’re annoyed? Seems they’re not that annoyed after all.
 
Remij said:
You can definitely buy things while at the same time being annoyed at how expensive they are.
Click to expand...

I can believe that’s true for food and water and cell phone bills. Not graphics cards to play games. If you’re aactually annoyed that money stays in your pocket. Otherwise it’s just theater.
 
  • Like
Reactions: Rys
trinibwoy said:
I can believe that’s true for food and water and cell phone bills. Not graphics cards to play games. If you’re aactually annoyed that money stays in your pocket. Otherwise it’s just theater.
Click to expand...
No, it can be true of all things. I'm annoyed that other people who aren't gaming will buy these GPUs for insane prices while jacking up the prices for gamers. I'm annoyed that Nvidia markets these GPUs towards gamers and professionals while seriously undercutting lower offerings in their stacks in other ways to screw over PC gamers. I'm annoyed that crypto shit and AI have given Nvidia so much confidence to screw over the market that created and sustained them.

I'm annoyed that Nvidia will continue this until they price gamers out of the market completely for their better GPUs. They are actively incentivizing the exchange of "gamers" for "professional developers" who will eventually be the only ones who can afford their high end and enthusiast GPUs while gamers get the leftovers at the mid and bottom of the stack.. which will still be overpriced garbage in all likelyhood.

I'm very annoyed that I'm already willing to pay up to $2000 for a single component of a PC. It's about principle.
 
trinibwoy said:
I can believe that’s true for food and water and cell phone bills. Not graphics cards to play games. If you’re aactually annoyed that money stays in your pocket. Otherwise it’s just theater.
Click to expand...
Maybe for you but I purchased a 4080 super with heavy annoyance. The price was ridiculous and the performance is even more ridiculous for the price. However, the lack of a competitive option left only one choice. I needed a replacement graphics card and that was the only logical option.

If Intel or amd had a GPU with 4080 performance in the $650-$700 price tier, I’d have bought that instead, no questions asked. Instead amd wanted to sell a GPU with worse performance overall excluding software features at a comparable price. Then they wonder why they’re not getting any market share.
 
trinibwoy said:
Hmm what can I say. You guys are both highlighting the reason for the current pricing situation. If I don’t like the price of something I don’t buy it. It’s that simple.
Click to expand...
That's exactly what's going to happen... the annoyance comes from Nvidia taking advantage of the fact that some people (and the majority of them not gamers) will continue to... making your little protest of not buying it... worthless.
 
Remij said:
That's exactly what's going to happen... the annoyance comes from Nvidia taking advantage of the fact that some people (and the majority of them not gamers) will continue to... making your little protest of not buying it... worthless.
Click to expand...
Which means that the pricing Nvidia has set is correct. Because the only way it wouldn't be is if nobody would be buying the product. And yes there were several such products from Nvidia in the past which were later followed up by much cheaper ones because nobody would buy them.
 
DegustatoR said:
Which means that the pricing Nvidia has set is correct. Because the only way it wouldn't be is if nobody would be buying the product. And yes there were several such products from Nvidia in the past which were later followed up by much cheaper ones because nobody would buy them.
Click to expand...
Nobody is saying Nvidia isn't doing what's best for Nvidia..... It's not a hard concept that exchanging gamers for professionals who will pay higher prices pisses off and annoys gamers who wont.
 
Remij said:
That's exactly what's going to happen... the annoyance comes from Nvidia taking advantage of the fact that some people (and the majority of them not gamers) will continue to... making your little protest of not buying it... worthless.
Click to expand...

Yeah that’s how the market works unfortunately. Some people get left out. Things will only change if people refuse to pay the inflated prices en masse.
 
trinibwoy said:
Yeah that’s how the market works unfortunately. Some people get left out. Things will only change if people refuse to pay the inflated prices en masse.
Click to expand...
Yes.. gamers get left out.. as Nvidia prices them out of the market for their GPUs.
 
Remij said:
Nobody is saying Nvidia isn't doing what's best for Nvidia..... It's not a hard concept that exchanging gamers for professionals who will pay higher prices pisses off and annoys gamers who wont.
Click to expand...
They are not exchanging gamers for anybody. There are more GPUs in the lineup than just the highest tier, and professionals tend to use cloud AI solutions these days. All these 4090s were bought primarily by gamers.
 
DegustatoR said:
They are not exchanging gamers for anybody. There are more GPUs in the lineup than just the highest tier, and professionals tend to use cloud AI solutions these days. All these 4090s were bought primarily by gamers.
Click to expand...

Yeah unless professionals are installing Steam on all of their workstations gamers bought a boat load of 4090’s.
 
DegustatoR said:
They are not exchanging gamers for anybody. There are more GPUs in the lineup than just the highest tier, and professionals tend to use cloud AI solutions these days. All these 4090s were bought primarily by gamers.
Click to expand...
Yes they are. That is entirely their plan. Raise the prices until PC gamers won't or can't buy them, and use that as a reason to market and sell the top end GPUs to professionals instead.

4090s were $1600... not $2000-2500. Where exactly do you think the pricing is heading towards? It's certainly not gamers. You always have this attitude like as if Nvidia is just following where the market takes them... but no... they're purposefully pushing the market aka gamers to the brink with the intention that either gamers buy it at these stupid as hell prices.. or professionals or other markets will and that silicon will go towards more lucrative markets.

Bubu there's lower tier GPUs.... doesn't change my point whatsoever. This idea that people can't or shouldn't be annoyed with what is happening with GPU prices is ridiculous.. There's absolutely NOTHING that warrants a potential $900 increase from the 4090 to the 5090 within a single generation. I'm already part of the problem, but I have my own limit.. and they're reaching it.
 
Remij said:
Yes they are. That is entirely their plan. Raise the prices until PC gamers won't or can't buy them, and use that as a reason to market and sell the top end GPUs to professionals instead.
Click to expand...
So their plan is to leave the market which they have 90% control over and make billions from because... there is a GPU or two which is sold at $1000+?
I wonder if this plan has been failing for the last 20 years or so. They must be desperate at this point, nothing works, they are still the best gaming GPU vendor on the planet.
 
DegustatoR said:
So their plan is to leave the market which they have 90% control over and make billions from because... there is a GPU or two which is sold at $1000+?
I wonder if this plan has been failing for the last 20 years or so. They must be desperate at this point, nothing works, they are still the best gaming GPU vendor on the planet.
Click to expand...
Yea, if you haven't noticed.. some things have changed over the past 20 years. Nvidia are no longer beholden to prices gamers will pay for their hardware.. they have other, better forms of revenue now. At least you admit they have 90% control of the market.. and the pricing of it. At this point I'm simply curious as to how far it has to go for you to realize they've screwed over gamers. But I know even if or when you do, you wont outwardly admit it , you're such an Nvidia apologist that you would rather congratulate them for it.. because hey... it was still worth the purchase for some people out there.. some people bought it.. can't be mad at that, nosir.
 
Remij said:
Yes they are. That is entirely their plan. Raise the prices until PC gamers won't or can't buy them, and use that as a reason to market and sell the top end GPUs to professionals instead.
Click to expand...

Sorry this strategy doesn’t make any sense. If their plan is to sell expensive silicon to professionals nothing is stopping them from doing that right now. They don’t need to annoy gamers first.

The problem is that gamers continue to shell out big bucks for gaming cards and Nvidia is doing the only rational thing in that situation. Gamers have ALL the leverage and they’re refusing to use it. If people refuse to buy overpriced gaming cards Nvidia will just lower prices. They won’t abandon the market.
 
trinibwoy said:
Sorry this strategy doesn’t make any sense. If their plan is to sell expensive silicon to professionals nothing is stopping them from doing that right now. They don’t need to annoy gamers first.

The problem is that gamers continue to shell out big bucks for gaming cards and Nvidia is doing the only rational thing in that situation. Gamers have ALL the leverage in this situation and they’re refusing to use it. If people refuse to buy overpriced gaming cards Nvidia will just lower prices. They won’t abandon the market.
Click to expand...
Yes there is a reason to do what they're doing. They're testing the max the gaming market will pay.. They learn the max that PC gamers will pay.. and then they will increase the price just above that. The next lower tier becomes the new PC gaming enthusiast tier that gamers can afford. This is essentially what has happened with the 4090 and the 4080 already. $1500+ 5080?? lmfao get the hell out of here. $2000-$2300 5090? A joke.

And I completely disagree that gamers have all the leverage.. lmao. They've never had less leverage against Nvidia than they do now. Nvidia does not need the gaming market at all anymore.. and they're starting to act like it.
 
You must log in or register to reply here.
Back
Top