Value of Hardware Unboxed benchmarking

[Father_Murphy]

No company would price the cards lower than they need to, but that doesn't mean it can't still be aggressive. AMD needs to know how RTX 5070 and Ti actually perform to price their cards accordingly, aggresive enough or not.

That sounds exactly like what AMD has been doing for a few generations now with very no success. AMD's Jack Huynh's boldly told Tom's Hardware in September (AMD deprioritizing flagship gaming GPUs: Jack Huynh talks new strategy against Nvidia in gaming market) that AMD intended to attack the largest segment of the GPU market (the midrange) with the priority to build scale to get AMD to 40% market share.

So, my number one priority right now is to build scale, to get us to 40 to 50 percent of the market faster. Do I want to go after 10% of the TAM [Total Addressable Market] or 80%? I’m an 80% kind of guy because I don’t want AMD to be the company that only people who can afford Porsches and Ferraris can buy. We want to build gaming systems for millions of users.

Yes, we will have great, great, great products. But we tried that strategy [King of the Hill] — it hasn't really grown. ATI has tried this King of the Hill strategy, and the market share has kind of been...the market share. I want to build the best products at the right system price point. So, think about price point-wise; we’ll have leadership.

TH: Price point-wise, you have leadership, but you won't go after the flagship market?

JH: One day, we may. But my priority right now is to build scale for AMD. Because without scale right now, I can't get the developers. If I tell developers, ‘I’m just going for 10 percent of the market share,’ they just say, ‘Jack, I wish you well, but we have to go with Nvidia.’ So, I have to show them a plan that says, 'Hey, we can get to 40% market share with this strategy.' Then they say, 'I’m with you now, Jack. Now I’ll optimize on AMD.' Once we get that, then we can go after the top.

Huynh even stated that AMD has great products but that hasn't gained AMD share. What else is AMD supposed to do to gain that share? Aggressively price its mid-range, mass-market products. Mr. Huynh's statements indicated (to me, at least, and maybe I'm the only one) a change in strategy. Doing more of the same, like allowing Nvidia to set the pricing brackets and then selling at a discount, will not enable AMD to reach the goals laid out by Mr. Huynh. And, following Nvidia's lead on pricing is not "aggressive" by any stretch of the imagination.

As you said, of course "no company would price the cards lower than they need to." But here, AMD has said the pricing "need to" is the kind of pricing that results in market share gains. AMD cannot merely sell its hardware at a discount to Nvidia's hardware because Nvidia's software adds more value than AMD's software. In reality, AMD's discounts relative to Nvidia's comparable products aren't really discounts but, instead, a reflection of the (lesser) total value offered by the product as a whole.

AMD doesn't need to know what Nvidia will price the 5070/ti at to sell the 9070/xt at an aggressive, market-share grabbing, "I've gotta buy that" price, like the HD4850 or the GTX 970, for example. My bigger concern is that AMD literally cannot price these products at such a level without actually selling them for a loss.

 

[DegustatoR]

AMD knows the prices. It's highly likely why they've scrapped the CES launch for RDNA4. What they didn't know is the real world performance of Blackwell cards, but this is also known now as the cards are out and the drivers are also available - for 5090 at least. So how long does it take to adjust for that? Two months? Seems too long for just the pricing. I think they are trying to change the specs.

 

[Kaotik]

AMD knows the prices. It's highly likely why they've scrapped the CES launch for RDNA4. What they didn't know is the real world performance of Blackwell cards, but this is also known now as the cards are out and the drivers are also available - for 5090 at least. So how long does it take to adjust for that? Two months? Seems too long for just the pricing. I think they are trying to change the specs.

You can't change specs in couple months aside of clocks, not upwards anyway

 

[DegustatoR]

You can't change specs in couple months aside of clocks, not upwards anyway

As AMD themselves has shown you can change the specs even after sending the cards for reviews.

 

[Kaotik]

As AMD themselves has shown you can change the specs even after sending the cards for reviews.

So you're suggesting even XT has disabled stuff in the chip?

 

[DegustatoR]

So you're suggesting even XT has disabled stuff in the chip?

Dunno. You sure that they've planned to have all cache enabled there for example?

 

[Kaotik]

Dunno. You sure that they've planned to have all cache enabled there for example?

Considering it's not exactly huge chip, I doubt they'd add significant enough amount of disabled cache for yields.

 

[DavidGraham]

I feel like the issue here is that AMD doesn't want to start a price war with NVIDIA, a war that will evidently kick them out of the market completely. NVIDIA has demonstrated times and again they are not willing to lose an ounce of marketshare, (they adjust prices when necessary and release refreshed SKUs all the time) .. specially now that they have the financials to not give a damn if they lose a couple of % of margins. This makes AMD very hesitant to be aggressive on price, I have never seen AMD this so obviously hesitant, which makes me think that this is indeed the logical explanation.

 

[Potato Head]

So AMD has RTX 50 benchmarks in theird hands? Right

They have already positioned their product. Do I need to reply to you with their own words again?

 

[Kaotik]

They have already positioned their product. Do I need to reply to you with their own words again?

RTX 50 portion is estimate.

 

[arandomguy]

I feel like the issue here is that AMD doesn't want to start a price war with NVIDIA, a war that will evidently kick them out of the market completely. NVIDIA has demonstrated times and again they are not willing to lose an ounce of marketshare, (they adjust prices when necessary and release refreshed SKUs all the time) .. specially now that they have the financials to not give a damn if they lose a couple of % of margins. This makes AMD very hesitant to be aggressive on price, I have never seen AMD this so obviously hesitant, which makes me thing that this is indeed the logical explanation.

The problem with this idea of AMD pricing aggressively for market share is that such a strategy can only work if you have better underlying costs (without beating a dead horse here, but no chiplets was not it) and/or you're basically trying to out financially last your competitor. The problem here is both those factors if anything work against AMD from what we know. There's been scenarios in the past in which they have actually successfully engaged in this to swing marketshare but if you look at them they had those factors working for them such as with Terascale when Nvidia had Tesla/Fermi.

I'm not sure how people think such a scenario would play out, if AMD prices very aggressively to pull massive market share do they just think Nvidia is going resign themselves to losing massive market share? They're going to have the same if not more room to price lower to re-establish equilibrium. Or I guess both could just bleed each other in this segment until one gives in which again isn't likely to favor AMD. So yes while this price war idea might be fanciful from a consumer perspective in terms of the online discourse I don't see how it's a viable strategy from either party (there's problems with Nvidia doing this as well which might not be readily apparent).

I feel a contributing factor to the online discourse is this idea of a "Zen" moment. Except that occured due to both AMD's situation, Intel's situation and the broader industry (eg. TSMC and Intel's foundry). The latter two factors especially seems like something many aren't factoring in to that turn around with the assumption that it was entirely AMD's own agency and the can occur anytime now for GPUs on it's own.

 

[DegustatoR]

NVIDIA has demonstrated times and again they are not willing to lose an ounce of marketshare

I dunno about that. It seems to me that they will easily lose some market share if fighting for that would cost too much. There is a line though at which they will start seeing this issue as a serious threat.

 

[Potato Head]

RTX 50 portion is estimate.

Really? Who woulda thunk?

 

[Potato Head]

Herkelman claims that the E3 pricing was an intentional misdirection - a 'jebait', in his own words, a term borrowed from the Twitch streaming community - based on extensive modelling of rival Nvidia's pricing structure. 'We started modelling different competitive scenarios,' Herkelman told the site. 'Their die size is quite big, and we knew what they could probably afford in terms of margins and pricing and what they were currently pricing their products at. We started using this data to say, okay, if they're starting to see lower sales they're going to be under tremendous amount of pressure on price, and they're going to be under a tremendous amount of pressure to figure out what they’re going to do to increase sales once we launch Navi. We know that they have a tremendous burden on their gross margins, because their die size is big, and so we just game-played SRPs [suggested retail prices].

'The prices that we originally put out, we waited to see what they put out. And then we made the appropriate move not only to deposition their Super series but also to logjam their 2060 and 2070, because we knew that they’re having slower success. And we wanted to do a double Jebait, which is not only block their Super strategy but also slow down their 2060 and 2070. That was the real jebait. I can't go into too much more about detail, but it's been so much fun these last couple of weeks just playing that out. It's just fun finally to win.'

At this rate AMD is going to do a double secret jebait on themselves.

 

[Kaotik]

Really? Who woulda thunk?

You apparently didn't since you claim AMD has positioned their products.
Anyone even with limited understanding should know that the actual positioning depends on where (price/perf) RTX 50 lands.

 

[Potato Head]

You apparently didn't since you claim AMD has positioned their products.
Anyone even with limited understanding should know that the actual positioning depends on where (price/perf) RTX 50 lands.

“It’s coming in weeks” - Frank Azor, Jan 10th.

“There will be, they already promised that. The question is when it is between now and 23rd” - Kaotik, Jan 8th.

“It has to be more than just pricing related, despite cards already being at retailers David McAfee has tweeted they'll go on sale in March” - Kaotik, Jan 20th.

 

[Kaotik]

“It’s coming in weeks” - Frank Azor, Jan 10th.

“There will be, they already promised that. The question is when it is between now and 23rd” - Kaotik, Jan 8th.

“It has to be more than just pricing related, despite cards already being at retailers David McAfee has tweeted they'll go on sale in March” - Kaotik, Jan 20th.

Yes, XFX was triggerhappy and teased original planned launch date, which got canned. Maybe AMD expected actual benches of 5070/Ti at CES which didn't happens.

More than just pricing yes. The more part being at least seeing where 5070/Ti lands.

 

[Potato Head]

Frank Azor is AMD. As far as XFX, I owned a XFX 6870. Or maybe it was a 5870. Anyway, that thing was so loud I swore them off forever. Couldn’t tell you thing about what they said or didn’t say, my brain has them on ignore.