I don't think they are implicitly agreeing on price. While I think that both keep a pretty close eye on market conditions, there is no collusion between these guys. If there was, you would think that ATI would have lowered their prices on the X850 XT and PE when NVIDIA released the 7800 GTX. You would think that if ATI knew that the 7800 was about to be released, they would have lowered the prices on those cards to be able to drain inventory, and keep a similar price/performance between their top cards and what was available from NV. Instead, ATI kept their prices high, and how many consumers would prefer to buy a X850 XT/PE over a 7800 GTX for the same price? Well... other than those that complain about the image quality. But for the majority of users out there that are going to spend that kind of money, they want the fastest.
I also think we are seeing some very good competition from the midrange. Remember when the X800 Pro and 6800 GT were duking it out? It took a long time before either of those cards dipped below $400. The big reason for that was both NV and ATI just couldn't produce enough chips, so they were priced very high. Look at the situation now with the 7800 GT and the X1800 XL. They were both introduced at the $449 price point, but you can pick either of them up for around $320 right now. I think that is pure competition in a very lucrative marketspace. If there were collusion going on, then both would still be priced above $400 and shareholders would really be dancing in the streets.
We also do not have a gun pointed at our head to buy a $750 or $1000 card. Just as we saw with the failure that was the 6800 Ultra 512 MB, if the market does not see a solid reason for a card to be priced that high, it simply will not sell. If users get tired of paying the premium for the top end parts, they will go to another level and the manufacturer will have to readjust their strategy to sell cards at the top end. We as consumers have a great amount of power (since it is our money). While we all may not use that power wisely, the majority of us have quite a bit of common sense. If these companies find that they don't sell enough product at these high levels, they will find that it is not worth the effort put into those product to reach that price.
It is unfortunate though that the price of entering the graphics race is now incredibly high, I certainly hope S3 will provide solid products at the low end and start to work their way up. Having a 3rd supplier of chips is good for the industry, and it will put more of an edge on competition.
Oh, and the buying yachts with your hard earned money is kinda silly. NV is a public company, and as such Jen-Hsun's salary is well documented. He can buy fun stuff with his stock options, and they increase that stock value by working hard and keeping ahead of the competition. If he wants to spend his stock options that way, then more power to him. The amount of work these people have done to take NVIDIA from a garage to where they are now is simply astounding. They have sacrificed a lot to get here, and I for one feel they probably deserve some of the rewards coming their way. I don't feel that I have been trod upon for them to reap these awards, and it is my decision to either buy or pass up a video card.
BTW, I have no stock in NVIDIA, nor does any of my immediate family. I also do not get paid by NVIDIA, nor do they advertise with me, nor do they send me cards out of the blue for simple charity. The last card I received from them was the XFX 6600 DDR-2, and for the amount of work I did on that review I basically received about $2 an hour to get that review out (yes, they allowed me to keep the card).
