AMD Exec: Nvidia fell for our pricing games hook, line and sinker

[Master Disaster]

According to AMDs Vice President it would seem as though AMD deliberately overpriced the new Navi GPUs when they announced them in the hopes of baiting Nvidia into increasing the price of the super cards.

Quote

The GPU wars are on, and AMD is playing hardball. Its latest move in cutting the prices on its RX 5700 cards was not a reaction to Nvidia’s Super 20 series launch, but rather a sneaky pre-planned pricing strategy... or so AMD says.

 

As you may recall, when AMD unveiled the Radeon RX 5700 and 5700 XT, it listed them with an MSRP of $379 and $449 respectively. When Nvidia launched its GeForce RTX 2060 and 2070 Super cards in an apparent attempt to torpedo AMD’s RX release, AMD responded by slashing its prices to $349 and $399.

 

However, in an interview with Hot Hardware AMD Vice President and General Manager of the Radeon Division Scott Herkelman said the price cuts were a pre-planned maneuver to get Nvidia to overprice its Supers.

Here's what Scott Herkelman had to say

Quote

We know that they [Nvidia] have a tremendous burden on their gross margins, because their die size is big, and so we just game-played suggested retail prices.

 

We made the appropriate move not only to deposition their Super series but also to logjam their 2060 and 2070 because we knew that they’re having slower success.

 

And we wanted to do a double fake, which was not only to block their Super strategy but also slow down their 2060 and 2070.

 

It's been so much fun these last couple of weeks just playing that out, It's just fun finally to win.

Source - https://www.techspot.com/news/81044-nvidia-fell-orchestrated-pricing-trap-amd-exec.html

 

https://www.youtube.com/watch?v=QZyHBAEJTC8 

 

I'm not sure I believe this tbh, sounds like management spin to me.

[glenalz81]

I have to say, as soon as the news broke about Super, then Navi prices dropping my instant thought was this was the plan all along from AMD.

[Trixanity]

No matter what the actual truth is it's quite clear that AMD has a lot more wiggle room for the margins so the reasoning is sound.

So what came first? The chicken or the egg? A planned price drop or an emergency response to unexpected performance numbers?

[Moonzy]

in other words, if Nvidia had no response, they're just gonna sell us their cards at jacked up prices?

[Blademaster91]

It sounds more like management spin, I have to agree with GN's mention of lowering the prices being a requirement. And it seems like more of a emergency response that they couldn't be selling their cards at an inflated price, especially the 5700XT with the crappy blower cooler.

[Mr.Humble]

46 minutes ago, Moonzy said:

in other words, if Nvidia had no response, they're just gonna sell us their cards at jacked up prices?

I mean, it works for Nvidia...

[Moonzy]

3 minutes ago, Mr.Humble said:

I mean, it works for Nvidia...

it's one thing to do it discretely, another to openly admit to doing it

 

though they are a business for profit, what do we expect? charity? lol

[Master Disaster]

Just now, Moonzy said:

it's one thing to do it discretely, another to openly admit to doing it

 

though they are a business for profit, what do we expect? charity? lol

2 things...

 

1) You can guarantee AMD knew about Super before we did, they knew it was coming.

2) If Super didn't exist then AMD wouldn't have admitted it and we wouldn't be having this conversation at all.

[Froody129]

I call BS on this. They very likely were prepared to drop the prices anyway, and this was just in reaction to Nvidia competition. If anything this kind of unprofessional statement makes them look worse. And they can't pretend they would've dropped the prices had they won. 

 

Just to be clear. I don't mind pricing strategies like this: they benefit me as a consumer. But the way they're handling it in terms of PR is not a good image 

[Mr.Humble]

2 minutes ago, Moonzy said:

it's one thing to do it discretely, another to openly admit to doing it

And we would've never known if Nvidia didn't release the Supers

[Moonzy]

2 minutes ago, Master Disaster said:

If Super didn't exist then AMD wouldn't have admitted it and we wouldn't be having this conversation at all.

1 minute ago, Mr.Humble said:

And we would've never known if Nvidia didn't release the Supers

yea but they did and now they're coming out basically saying what i just said

what they should do is just cut the price and continue with their business, instead of acting like kids to try to appeal to who?

[SADS]

It seems that whichever way you look at it, the consumer is the one losing out. The NV cards are already well overpriced, AMD following suit does not sound good to me.

 

This news is disapponting in all aspects to me.

[00100000]

Honestly AMD doesn't need to play hardball to win

[Taf the Ghost]

1 hour ago, CUDAcores89 said:

it could be management spin, or this could be a legitimate strategy judging by how fast they dropped their prices. 

 

Hard to say for sure. Either way lower prices are better for the consumer. 

 

I'm almost sure the management team at AMD knew something like this would happen from nvidia so i'm not denying it..

AMD was playing a double layered game. They'd have loved to keep the prices +50USD from where they launched, but they were able to get their prices at their target level by being the "First Mover". It's really not that different from offering a better deal for yourself and moving closer to the position you'll accept in any negotiation, it just happened to play out in a pricing scheme. 

 

Other issue is that it'd have taken a couple of weeks to actually change prices, so AMD very much had the launch prices already setup if they needed to drop them. AMD played their "trap card", if you want it in meme form.

[Trixanity]

56 minutes ago, VegetableStu said:

that's another way to look at their message, LOL
 

depends on how well the cards scale with better temps? I hear temps are much better with a borrowed GPU fansink o_o (Steve from Hardwareunboxed and one other i can't remember the name of were experimenting)

Look at how it scales with voltage and power targets:

 

With AIB coolers it should do 2200+ MHz with decent temps - at least if you mess with the power tables from what I've seen elsewhere.

Right now you need to undervolt to keep temperatures in check. Power will go through the roof by pushing it to 2200+ though as you can see it's already above the sweet spot for frequency and definitely voltage.

You can see why Samsung would want this uarch in their phones. It's power efficient when you reduce voltage and bring the frequency back into the sweet spot. You can drop power consumption 40% and only lose 7% performance in the process.

[Brainless906]

Though maybe a little polished in the interview this tactic pretty much makes sense if you're sitting where AMD is sitting.

 

AMD had to know there would be  a swift response from Nvidia and that it would likely be matching and/or surpassing the new Navi cards. Easiest way to deal with this is aim high and be fully prepared to drop the pricing ASAP depending on how hard they responded.

 

That it is to say it could be completely planned at least in the base level but for PR they are playing it up to appear slick when really it was a necessary move as even AMD knew they couldn't out swing NVIDIAS top end.

 

[Blademaster91]

1 hour ago, VegetableStu said:

depends on how well the cards scale with better temps? I hear temps are much better with a borrowed GPU fansink o_o (Steve from Hardwareunboxed and one other i can't remember the name of were experimenting)

Did Steve from Hardwareunboxed test with another GPU heatsink? I've only seen the plastic washers under the mounting screws mod GamersNexus did, even that improves temps quite a bit for a blower cooler, but IMO the 5700XT should have gotten a reference 2 fan open air cooler.

[spartaman64]

49 minutes ago, Moonzy said:

yea but they did and now they're coming out basically saying what i just said

what they should do is just cut the price and continue with their business, instead of acting like kids to try to appeal to who?

if they just drop the price quietly then nobody will know about it. the fact that we are discussing this is proof that their marketing strategy is working

[Moonzy]

12 minutes ago, spartaman64 said:

if they just drop the price quietly then nobody will know about it. the fact that we are discussing this is proof that their marketing strategy is working

they can just announce the price drop, and we would all be happy

but yelling "jebaited" and go on to elaborate a ton of things that we didnt have to know is really unnecessary, it only starts a pilot hole for people to dig deeper for negative press

 

though im no marketing expert, so idk

[spartaman64]

1 minute ago, Moonzy said:

they can just announce the price drop, and we would all be happy

but yelling "jebaited" and go on to elaborate a ton of things that we didnt have to know is really unnecessary, it only starts a pilot hole for people to dig deeper for negative press

 

though im no marketing expert, so idk

and either it doesnt get reported on so nobody will know or the headline will be nvidia forces amd to drop prices 

[Blademaster91]

33 minutes ago, spartaman64 said:

if they just drop the price quietly then nobody will know about it. the fact that we are discussing this is proof that their marketing strategy is working

Well idk plenty of people were complaining the 5700XT was overpriced at $449 when they showed Navi at E3. With this PR tactic of telling consumers it was just a game, they're taking the "any publicity is good publicity" while really they're admitting they were going to jack up the prices just like people accuse Nvidia of doing, only changing their decision when Nvidia responded with Super cards. As a consumer I like competitive prices so reducing the reference card pricing is nice but the childish games aren't necessary at all.

[Moonzy]

1 minute ago, spartaman64 said:

headline will be nvidia forces amd to drop prices

it sounds bad

but imo it's better than basically admitting to jacking up prices, which directly pisses off consumer

 

idk what's the right step to take.

it's hard to make it out unscathed facing Nvidia in the GPU market

 

personally I'm glad there's competition in this market at least

[BuckGup]

Nvidia is a shit to deal with in the corporate world too. They bought Mellanox so they will charge any known competition through the roof using it. Otherwise it’s much cheaper. Same goes for GPUs. They constantly ask what they will be used for as if it competes with a DGX system you will have to pay through for them

[spartaman64]

Just now, Blademaster91 said:

Well idk plenty of people were complaining the 5700XT was overpriced at $449 when they showed Navi at E3. With this PR tactic of telling consumers it was just a game, they're taking the "any publicity is good publicity" while really they're admitting they were going to jack up the prices just like people accuse Nvidia of doing, only changing their decision when Nvidia responded with Super cards. As a consumer I like competitive prices so reducing the reference card pricing is nice but the childish games aren't necessary at all.

 

Just now, Moonzy said:

it sounds bad

but imo it's better than basically admitting to jacking up prices, which directly pisses off consumer

 

idk what's the right step to take.

it's hard to make it out unscathed facing Nvidia in the GPU market

 

personally I'm glad there's competition in this market at least

they are saying the higher price is just there to trick nvidia idk what there is to get pissed off about unless you dont believe them and think thats the price they were originally planning on then it doesnt matter what they say afterwards anyways

[Moonzy]

8 minutes ago, spartaman64 said:

they are saying the higher price is just there to trick nvidia

what ticks me is they're implying if nvidia doesnt do anything, we're paying more just because of their scheme

i don't believe they would drop the price if nvidia did nothing, it doesnt make business sense