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No Lower GPU Prices Despite Reduced GPU Demand

By - Source: DigiTimes | B 54 comments

This quarter, graphics card shipments are expected to plummet by anywhere between 30 and 40 percent, claims a report on Digitimes. Apparently, because BitCoin mining is losing popularity, especially GPU-based mining, demand for graphics cards is dropping to a point where shipment levels are too high for the current market.

This situation could have multiple factors contributing to it. Not only is there less demand for graphics cards, but due to the reduced interest in GPU-based crypto currency mining, many cards that have been used for doing so are getting offloaded for bargain prices on the secondhand market, making it very difficult for a lot of buyers to justify buying new hardware for gaming.

Normally, with this kind of a shift in the demand curve, we would expect the prices for graphics cards to cool down a bit due to the new equilibrium price, but that is not what seems to be happening. AIC and AIB vendors have been asking for AMD and Nvidia to cool down the prices, however, it seems that AMD and Nvidia have instead reduced supply, forcing the vendors to sit on their inventories and keep selling the cards at the current price levels.  Hopefully, that won't last forever, and hopefully, this is the end of Crypto Currency miners inflating graphics cards prices. Regretfully, we do have to say that we fear it will take a while for the market to recover.

Follow Niels Broekhuijsen @NBroekhuijsen. Follow us @tomshardware, on Facebook and on Google+.

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Top Comments
  • 10 Hide
    Onus , June 17, 2014 12:31 PM
    I think it is worth pointing out that mainstream buyers, the bulk of the market, were never buying high-end mining cards.
    Do you have more specific information on what the $50-$75 and $100-$125 segments are doing? Cards in these ranges are able to play any game, even if on lowered settings. With the economy as it is, I wouldn't expect kids asking for "gaming" cards to get any better than this; as you say, those wanting more are probably finding second-hand deals.
Other Comments
  • 5 Hide
    InvalidError , June 17, 2014 12:20 PM
    Worst case, the market will reset when 20-22nm products come to market and everyone will be trying to dump their 28+nm stock.
  • -4 Hide
    elbert , June 17, 2014 12:29 PM
    The overpricing due to currency mining has lasted to far in the cycle. Gamers are waiting for the new series especially due to full dx12 compliance. Being the support statement could mean less than half the full code set ill wait.
  • 10 Hide
    Onus , June 17, 2014 12:31 PM
    I think it is worth pointing out that mainstream buyers, the bulk of the market, were never buying high-end mining cards.
    Do you have more specific information on what the $50-$75 and $100-$125 segments are doing? Cards in these ranges are able to play any game, even if on lowered settings. With the economy as it is, I wouldn't expect kids asking for "gaming" cards to get any better than this; as you say, those wanting more are probably finding second-hand deals.
  • -6 Hide
    gsxrme , June 17, 2014 12:53 PM
    ...And this is why i'm still using my SLI GTX680s @ 1300Mhz/7000Mhz bios clocked. 1080p always over 60FPS maxed. Nvidia nor AMD can show me something that makes me drop a load.
  • 14 Hide
    vmem , June 17, 2014 1:25 PM
    They also forgot that this past cycle has been especially boring. sure the 290X and 780Ti are great cards, but then what? both companies almost rebranded an entire generation of cards for the past cycle, including some of the high-end (280X and the 770). this leaves little reason for most gamers to upgrade
  • -7 Hide
    mapesdhs , June 17, 2014 1:58 PM

    Pity this kind of market/pricing manipulation isn't regarded as something that
    should be unlawful...

    Ian.

  • 2 Hide
    Onus , June 17, 2014 2:05 PM
    While it does seem a little sneaky, this time the rebrands did come with some tweaks, and I'm not sure I've observed anyone lying about the products. As gsxrme and vmem point out, there just isn't any reason to "automatically" upgrade. For those consumerist mall-rats who think they always need the latest just because it is the latest, oh well too bad for them. Rational people upgrade when something no longer performs well.
  • 1 Hide
    Chris Droste , June 17, 2014 2:08 PM
    I'm with @vmem on this one. I'm soldiering on with a 6950 just because the geek in me just can't justify $400 or even $500 on re-baked Kepler and Taihiti cards that run obscenely hot, and only improve marginally on the previous generation. Unless i see some significant price shift I'm holding out for an Improved Volcanic Islands or an amped up Maxwell card (imagine what that chip can do at 3x/180w TDP? bring on the 880s!)
  • -4 Hide
    danwat1234 , June 17, 2014 2:10 PM
    If only people would be excited about crunching Folding@home for science on their GPUs, but most people are selfish or don't know the program exists.

    The key to reduced GPU prices is to buy them used.
  • -3 Hide
    CaedenV , June 17, 2014 2:22 PM
    I am hanging onto my GTX570 a bit longer as it is still more than good enough for 1080p gaming (even if I could use a bit more RAM for Skyrim).

    Once 4K gains more adoption and prices start to drop then I will pick up whatever card is equivalent to my 570 in the lineup that can push 4K at decent settings. Maybe a GTX 970 in two years or so? That is going to be an expensive year for my computer... new monitor, new GPU, and a new core system for Skylake processors. I typically like to space out my upgrades, but this time it is looking like everything is going to hit all at once.... it's going to hurt and my wife is going to hate me in 2016-17

    Mark my words, this kind of pricing is going to become the norm going forwards. Computer parts are finally hitting that point of 'good enough' to last more than a year or two, and the PC market is fairly saturated. Companies still need the income, but customers will not need the units. Rather than dropping $250 on a new GPU each year we will be dropping $500 every 2-3 years. We may not need the yearly upgrade, but they are still going to need the income, so we are going to pay it one way or another. I am half surprised we are not seeing this in other parts of the PC market already.
  • 7 Hide
    fpga123 , June 17, 2014 3:18 PM
    In Pakistan, the HD 7000 series is still where it was when it launched and the R7-R9 series has been placed above the 7950! The R9-295X is selling for $1990! The level of inflation is unprecedented! That's why I will be sitting on my HD6950 for at least this year.
  • 0 Hide
    InvalidError , June 17, 2014 3:51 PM
    Quote:
    Mark my words, this kind of pricing is going to become the norm going forwards.

    I would guess the opposite: while Intel has been raising CPU prices by ~$10 with each generation since Sandy, people's attachment to the traditional PC is starting to weaken with all the non-PC computing devices floating around. With Android, ChromeOS, FFOS, etc. devices becoming a fair bit more powerful each year, there will be a point where mobile platforms will have enough resources to become a real threat to desktops... in many cases, they already are but are still missing adequate software to make it happen. Intel is going to have a hard time selling $200-300 CPUs and a $40 chipset when people can get a device designed around a $30 Atom or ARM SoC that also gets the job done well enough.

    On the GPU side, the mid/high-end is not really in danger since both AMD and Nvidia introduce at least one thing worth considering each year that will be enough to make most enthusiasts start to itch for upgrades at least every other year. At the low-end though, you have IGPs that are currently good enough to obsolesce most discrete GPUs below $100 and will likely claw their way up, which is going to make a pretty big dent in revenue from sub-$100 products. On the plus side, this may force people into shopping in a bracket $25-50 above what they otherwise would and offset lost mid-range sales from people who are stretching their current ~$150 GPUs an extra year. Not necessarily a bad thing.
  • 1 Hide
    Amdlova , June 17, 2014 6:05 PM
    for really i can't see any difference from a gtx 670 to a Amd r7 260x. 260x is a rebranded 7790 i play all the games maxed 1080P with no problem at all. all i get my 260 dollar back to my pocket!
  • 7 Hide
    clownbaby , June 17, 2014 6:45 PM
    Quote:
    If only people would be excited about crunching Folding@home for science on their GPUs, but most people are selfish or don't know the program exists.

    The key to reduced GPU prices is to buy them used.


    Selfish for not folding? You obviously do not pay electrical bills.

    Prices are exactly what the market demands. Sometimes you can get more relative performance for dollar, sometimes not. There is no conspiracy, and people owning cards and not folding is far from selfish.

    Expecting free energy from graphics card owners is the only thing that is selfish. Altruism in science is a fallacy.
  • 5 Hide
    somebodyspecial , June 17, 2014 8:38 PM
    I don't think some people here understand if they started slashing prices, why would you buy their 20nm cards soon if you already got a GREAT card now for cheap? What people are asking them to do is BAD for business, profits and next gen R&D.

    We need them to price products at what the market will handle period, or start losing money in both camps which kills all future cards. Anyone stop to think the rebadging happens because they have to milk the cow longer since NEITHER side is making what they did even back in 2007 (and AMD well, even worse)? If they give away cards you'll get NOTHING next gen. They have to make money for R&D or we'll be getting cards every 3-4 years. Also, they didn't have much else they could do with the 20nm delays. A rebadge from both sides was essentially forced on them. If they kept up production and lowered prices they just lose money. You have to stop production to avoid flooding the market killing what little profits they do have (NV makes 1/2 what they did in 2007, see the point?). What good is selling 10mil cards if you make nothing vs. selling 1mil cards that make money on each one? Get a grip people, this is business. Not "I'm here to make everyone happy". Sure they want customers happy too, but if they're not making much money what is the point?

    IF AMD hadn't made a least a little money on consoles they'd be still losing money hand over fist (and it is barely keeping them up, but this R&D cost them phase3 drivers, freesync way behind, enduro problems, bad 290x launch for retail cards etc etc). The problem for AMD is they don't make a good enough product (or driver to help it) to charge more vs NV, so they sell cheaper and get screwed even more than NV. We need both stronger! This isn't fanboy junk here, it's being a FAN of BOTH companies making REAL money to R&D the next round etc forever. Broke companies put out crap. I fear if both don't start making more we will start getting worse stuff than now, though in fairness both make great cards. If you have anything over 3-4yrs old you have some serious upgrade power at any price related to your old gpus price. We can't really complain here.
  • -5 Hide
    danwat1234 , June 17, 2014 9:17 PM
    Quote:
    Quote:
    If only people would be excited about crunching Folding@home for science on their GPUs, but most people are selfish or don't know the program exists.

    The key to reduced GPU prices is to buy them used.


    Selfish for not folding? You obviously do not pay electrical bills.

    Prices are exactly what the market demands. Sometimes you can get more relative performance for dollar, sometimes not. There is no conspiracy, and people owning cards and not folding is far from selfish.

    Expecting free energy from graphics card owners is the only thing that is selfish. Altruism in science is a fallacy.


    Your right, the world revolves around money. I suppose nobody buys video cards to help find cures to cancer their families are affected by. Some bitcoin farmers may find that their GPU time is being wasted, making little money and instead give them a new use that actually does beneficial math.

    Bitcoin farmers are selfish, using up electricity to run math that doesn't give any useful results to humanity and just happens to make them money. Some can be said about some scientific distributed computing projects whose results are unlikely to find anything or anything useful (Seti@home, Dnetc).

    Selflessness from science is not bad reasoning! A lot is, like drug companies but some people like to improve humanity and may decide to work somewhere that pays less but contributes more to the future for others.
  • 1 Hide
    Tem B , June 17, 2014 9:28 PM
    Quote:
    The problem for AMD is they don't make a good enough product (or driver to help it) to charge more vs NV, so they sell cheaper and get screwed even more than NV. We need both stronger! This isn't fanboy junk here, it's being a FAN of BOTH companies making REAL money to R&D the next round etc forever. Broke companies put out crap. I fear if both don't start making more we will start getting worse stuff than now, though in fairness both make great cards. If you have anything over 3-4yrs old you have some serious upgrade power at any price related to your old gpus price. We can't really complain here.


    AMD had a better offering with the r9 290 cards. They have a weaker position as far as nvidia and its anti-competitive ways but I would go with an R9 over a 770 or 780 (that i could afford) any day. More ram and faster. Only real problem is power consumption.

    as far as your other comments, you are right to some extent. The thing is though, new products are supposed to warrant purchase. The next cards should offer so much that even people with the best of the last gen would want something new, and its not much to ask when these guys have been using the same stuff for years now.
  • -1 Hide
    siman0 , June 17, 2014 9:32 PM
    You can pick up a 290 and 290x for 200-325 on ebay. Given they are miner cards but hey cheep power.
  • 0 Hide
    Darkk , June 17, 2014 9:39 PM
    The article missed an important fact: APU

    For us gamers we will always want dedicated GPU hardware but as the general population will want to keep their costs down so will focus on APU systems. So it's going to be driven by market demands in general that brings in the most money for the company. APUs in terms of graphics performance aren't bad for general use and not too shabby for games but anything hardcore we won't be getting the best and latest greatest stuff anymore in terms of dedicated GPUs. It's just business.
  • -2 Hide
    Achoo22 , June 17, 2014 10:43 PM
    Quote:
    Worst case, the market will reset when 20-22nm products come to market and everyone will be trying to dump their 28+nm stock.

    I hope you're right. But I worry that AMD and NVidia will instead jack up the prices just like they did with the last generation. To upgrade your $150-200 6850 to a 7850 cost you $250-300, and to upgrade your 7850 to an 8850 (or whatever they name the next 200mm2 256bit board) will cost you $400 (decreasing with each rebadging before the next shrink, 6 years down the road).
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