No Lower GPU Prices Despite Reduced GPU Demand

By Niels Broekhuijsen
published

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+.

Niels Broekhuijsen
Niels Broekhuijsen

Niels Broekhuijsen is a Contributing Writer for Tom's Hardware US. He reviews cases, water cooling and pc builds.

54 Comments Comment from the forums
  • InvalidError
    Worst case, the market will reset when 20-22nm products come to market and everyone will be trying to dump their 28+nm stock.
    Reply
  • elbert
    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.
    Reply
  • Onus
    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.
    Reply
  • gsxrme
    ...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.
    Reply
  • vmem
    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
    Reply
  • mapesdhs
    Pity this kind of market/pricing manipulation isn't regarded as something that
    should be unlawful...

    Ian.

    Reply
  • Onus
    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.
    Reply
  • Chris Droste
    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!)
    Reply
  • danwat1234
    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.
    Reply
  • CaedenV
    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.
    Reply