Why Are Nvidia's GeForce RTX GPUs So Expensive?

Nvidia’s new Turing-based GeForce RTX GPUs are pricey, and enthusiast gamers have taken notice. The GeForce RTX 2080 Ti, the flagship card in the new gaming family of graphics cards, costs a wallet-pounding $1,199 for the first-party Founders Edition. Nvidia CEO Jensen Huang said at the company's press event that third-party cards would start at a hefty $999, but we haven't seen one for less than around $1,149.

That’s a huge jump from the last gen flagship, the GTX 1080 Ti. And there are sizable increases across every generation:

Unsurprisingly, consumers have some passionate responses to these prices. Readers in the Tom’s Hardware forums are calling for more competition from AMD, wondering if the performance benefit is worth it and saying they just won’t buy right now. On the Nvidia subreddit, there were similar thoughts on competitive pricing and keeping existing cards.    

So, why are Nvidia's new Turing cards so expensive? Nvidia didn’t respond to questions about why the cards are priced as they are, but we’ll update the story if we hear back.

Analyst Jon Peddie suggests that the cost may just be a result of what it takes to make this kind of hardware.

“Simple cost-of-goods… “ he told Tom’s Hardware over email. “These giant (and they are really big) chips cost a lot to make and test, and the huge amount of memory is expensive plus the cooling systems - just [cost of goods]. There's no rip off here, no conspiracy.”

But it could also be for a variety of other reasons. Stephen Baker, vice president of industry analysis at NPD, suggested it could be due to inventory or availability.

“I think they are likely trying to price these as very premium products,” Baker said. “Certainly if there is a significant amount of series 10 cards floating around they would want to at least draw that down somewhat.”

Baker also suggested that they can use the high pricing for a gradual release as the company better understands demand: “The market for cards has been so crazy the last couple of years, between the explosion in interest in gaming, the cryptomining bubble and the upgrade in quality and demand that they would be doing themselves a disservice to come out at lower prices,” he said. Lastly, he theorizes that high prices could be a way to protect against limited inventories after the launch.

One thing we don’t yet know: how the RTX GPUs perform compared to the existing 10-series. Nvidia CEO Jensen Huang spent a lot of time describing how RTX's ray-tracing feature will work, but we know very little about traditional benchmarks, and how the new series compares to the Pascal-based GPUs.

It’s possible that the new cards will be so groundbreaking that they’re worth the price, but without having our hands on the cards to benchmark them ourselves, we can’t say for sure. It’s also possible that the 10-series will offer a better value for those who don’t care about ray tracing and RTX capabilities.

Some reports over the last few months have suggested that Nvidia may have an inventory issue on its hands, including rumors that a major OEM partner returned 300,000 GPUs to Nvidia. Others suggest that this is a result of not managing the demands for gaming and mining appropriately.

During a recent conference call, Huang said that “[w]e’re expecting the channel inventory to work itself out. We are masters at managing our channel, and we understand the channel very well.” He also suggested that the inventory is in “the lower end of our stock,” so that may clear out before Nvidia announces mid and lower-tier Turing-based GPUs.