How profitable is the 'gaming GPUs' business?

G

gongo

Regular
The following sentence you are going to read is pulled out from xxx's xxx and has no means of verification. :LOL:

Nintendo sells more Wii units, globally in 1 month than what Nvidia/ATI sell their 'gaming' GPU line* for their entire lifespan, globally too.

*9600/9800/8800GT/GTX/GTS/Ultra/GX2 | HD4870/4850/4830/4890/x2/4770 eg. repeat for previous generation eg.

I would think these high performaing GPUs are the most expensive to research and produce and support and re-produce 18 months later...and they have to go through 2nd party, 3rd party and 4th party before landing onto gamers' hands....Intel do not have that much loops to go round i would think...and with the declining PC games sales..declining PC exclusives....do you think N/A current business model is sustainable?

of course this whole rant is moot if i overestimated the cost of running a GPU business?
 
No clue about numbers but I'm sure they earn enough on it because if they didnt why would they bother? It not like they do a totally new design for every segment of the market so its not like they spend boatloads of money on 1 design that they will only sell xxx times to gamers.

Also I dont think they need to go through so many loops. Isnt it just chip gets made -> send to board builder -> sents it to the store.

Pc games sales also dont have much to do with it I think. As long as there are games that require (or make use of) the new high end cards people will keep buying new cards because even though they might not buy the game, they need to buy the gpu if they want to play the new games.
 
Pc games sales certainly has something to do with it. If you're not buying PC games very frequently your less likely to want to upgrade your graphics card.
 
Freak'n Big Panda said:
Pc games sales certainly has something to do with it. If you're not buying PC games very frequently your less likely to want to upgrade your graphics card.
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Not really given the amount of people that just downloads their pc games. I know people that got high end pc's but hardly ever by pc games. I think that is the truth for a lot of pc gamers.
 
yea thats true piracy really kills the software market. But still there has to be software there for gamers to buy hardware for regardless of if they download it or not, so the contraction of the software market must have a negative effect on the hardware market. I wonder if there is any data to support that.. too lazy to look atm.
 
I wonder what kind of royalties ATI gets on the Wii GPU and the Xbox 360 GPU with ditto applying to the PS3 Nvidia GPU. Does anyone know if its enough to make a dent or a scratch on the financial performance?
 
gongo said:
Nintendo sells more Wii units, globally in 1 month than what Nvidia/ATI sell their 'gaming' GPU line* for their entire lifespan, globally too.
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r-r-really? the Wii sells 280k in the North America in a month. let's say 400k worldwide.
I realy hope that AMD sold more than that since they are also selling the graphics chip for the Wii.

now for Q2 the total shipment of cards was 16.8 million for AMD/nVidia/S3 since I don't have the percentages of low to high end. I can only assume that graphics card vendors sell a wee bit more than Consoles.

Over 81 Million graphics cards versus over 50 million Wii's
 
entity279 said:
I think it is also important that when selling consoles you don't usually make profit.
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That's a very broad statement... Do you mean the entire console loses money for the company who put it out(False. Generally losses are temporary. Something on the order of the first Xbox and the PS3 is unusual. Also, Nintendo has always made a profit with their consoles)? Do you mean the people who designed/make the chips take a loss? Do you mean something else entirely?
 
entity279 said:
I think it is also important that when selling consoles you don't usually make profit.
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The company selling the consoles often does not. Ofcourse the companies that supply parts do make a profit because for them there is no use at all to sell their parts at a loss. Console builders will make their money on software royalities. ATI, IBM or Nvidia wont so ofcouse they make a profit on the parts they sell to nintendo/ms/sony.
 
I.S.T. said:
That's a very broad statement... Do you mean the entire console loses money for the company who put it out(False. Generally losses are temporary. Something on the order of the first Xbox and the PS3 is unusual. Also, Nintendo has always made a profit with their consoles)? Do you mean the people who designed/make the chips take a loss? Do you mean something else entirely?
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Well i was thinking like

- company X sells consoles and makes some profit out of it (out of selling the hardware device)
- company Y sells consoles on a loss
- company Z sells video cards, usually making profit out of it.

X and Y can anyway price the consoles quite low, because even if they don't gain as much as they would want, they get additional revenues that are enabled by them selling the console. Because of that, the consoles can have a greater value for money, thus people will buy them more often.

Z's products can be viewed as having a lower value in this context. Of course, this disregards the fact that one may need a PC for other activities than gaming.

So with this I was trying to say that
-it is quite natural for consoles to sell in great numbers.
-just from the perspective of selling hw equipments, it might be that the GPU's are more profitable. (especially since X may be getting low margins )

Disclaimer: I am not a follower of the console market. I may not have a good picture about the money that consoles makers get for allowing game devs to sell a game for their console.
 
entity279 said:
Well i was thinking like

- company X sells consoles and makes some profit out of it (out of selling the hardware device)
- company Y sells consoles on a loss
- company Z sells video cards, usually making profit out of it.

X and Y can anyway price the consoles quite low, because even if they don't gain as much as they would want, they get additional revenues that are enabled by them selling the console. Because of that, the consoles can have a greater value for money, thus people will buy them more often.

Z's products can be viewed as having a lower value in this context. Of course, this disregards the fact that one may need a PC for other activities than gaming.

So with this I was trying to say that
-it is quite natural for consoles to sell in great numbers.
-just from the perspective of selling hw equipments, it might be that the GPU's are more profitable. (especially since X may be getting low margins )

Disclaimer: I am not a follower of the console market. I may not have a good picture about the money that consoles makers get for allowing game devs to sell a game for their console.
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For 360, the revenues are royalties, which tend to be VERY VERY profitable, since all the fixed costs were sunk already.

There might be next eng. costs for a new part, and some support, but very little marginal cost.

David
 
I believe no games on earth make more money then WoW. And WoW is an PC / Mac Exclusive....

The problem is, we have no way to get rid of those Intel iGFX and move gamers to an high Spec Machine.

Upgrading Gfx on PC is hard. ( For casual users. )

So N/A gamers card will continue to shrink, ( more and more players moves to Console ),

And i believe that is why nvidia make the decision to invest more on GPGPU.
 
Freak'n Big Panda said:
All we need is for blizzard to come out with a very demanding dx11 version of wow
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:LOL:

I think Blizzard could possibly carry their reputation of WoW to SC2 and Diablo 3. "Oh cool, a new blizzard game, I wonder how it is?". Anyways, their next MMO better be demanding to where you must have an x1800xt or higher(min spec). That seems broad enough for blizzard to capture a wide audience, but at the same time, scoops those Intel IGP's out of the way.
 
Blizzard never releases games that push the graphical evenlope, and they always make sure their games run any hardware that is out there. If intels IGPs are as good as a 1800xt for their next MMO then they will aim for that level of performance, but i doubt intels IGPs will be anywhere close to that.
 
iwod said:
The problem is, we have no way to get rid of those Intel iGFX and move gamers to an high Spec Machine.
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In my opinion, the real problem is cheap interoperability between Xbox 360 and the PC. Being no developer, I nevertheless imagine it's a matter of a few weeks if not days to do a full port from some Xbox 360 title to a PC version - QA notwithstanding. But the game-code and artists work is covered and that's were the real costs lie.

Now, otoh you have this once powerful piece of console hardware running games fitting to it's specs. Otoh you have an average gaming PC sold these days (I know, not the majority of installed base) which is vastly more powerful - yet you don't need it. Even a mid-size box from two years ago can run your average console port and drain your favourite torrent/pr0n site (just an example) at the same time. So why should you upgrade?

Sure, Crysis. But you cannot play it smoothly with full details on pc-worthy resolution even today. But apart from that?
 
Freak'n Big Panda said:
Blizzard never releases games that push the graphical evenlope, and they always make sure their games run any hardware that is out there. If intels IGPs are as good as a 1800xt for their next MMO then they will aim for that level of performance, but i doubt intels IGPs will be anywhere close to that.
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sure, such games with very high market penetration have to run on people's hardware, and that is the core2duo laptop with Intel graphics. Other highly popular games do so (counterstrike, left4dead, the sims)

not a big problem to me, both kind of games can coexist. A great multiplayer game is worthless if you do some little lan gaming but only one or two machines can run the game.
 
gongo said:
I would think these high performaing GPUs are the most expensive to research and produce and support and re-produce 18 months later..
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at least most of the R&D sunk in the low volumes monsters (4870, 8800GTX etc.) gets used in all the midrange, low end and laptop parts. Times may look hard as margins were slashed after the introduction of the radeon 4850, but at first hand the business doesn't look desparate.
 
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