AMD as well as Nvidia (and/or partners) take advantage of the consumer by skyrocketing the price of graphics cards.

[papajo]

Just now, charlie_root said:

Nobody is forced to buy a GPU. It's a luxury item.

ok m8 you just want to say something opposite I am afraid... 

 

Nobody needs to have a GPU except we are in 2020 and most people use a PC and of those most game on it.

 

Besides that this is a PC forum I am discussing a matter that affects "us" = people that care about PC gaming.. and you are here like an oldy trying to say "in my times we had a stick and that was enough to entertain us" 

 

There are regulations for internet service prices and for car prices for example... those are "luxury items as well" 

 

 

[papajo]

3 minutes ago, Arika S said:

[citation needed]

read the OP.

 

Try to find an RX 6000 or RTX 3000 (if you find them at what price? )

 

Check the prices of old and slow stuff like RX 5600XT RTX 2060 and so on...

 

Isnt that enough citation for you? 

[Wheresmehammer]

2 minutes ago, papajo said:

ok m8 you just want to say something opposite I am afraid... 

 

Nobody needs to have a GPU except we are in 2020 and most people use a PC and of those most game on it.

 

Besides that this is a PC forum I am discussing a matter that affects "us" = people that care about PC gaming.. and you are here like an oldy trying to say "in my times we had a stick and that was enough to entertain us" 

 

There are regulations for internet service prices and for car prices for example... those are "luxury items as well" 

 

 

LOL............... NO.....................

 

 

Almost 8 billion people vs a couple of million sales in hardware...

 

This is why integrated graphics reign supreme, anyone who installed Steam on a work computer or any computer would likely have intel as a CPU due to the long time intel dominated the space and HD graphics of some sort ranging from HD 3000 upwards.

[The_russian]

4 minutes ago, papajo said:

People are forced to pay high prices

I forgot to mention that in my original reply, no one is being forced to buy a graphics card. If someone is forcing you, at gunpoint or otherwise, to buy the newest greatest graphics card as soon as it is released, well then there are bigger problems. Computer parts are a luxury item especially when used for gaming, you don't need them to survive. 

[charlie_root]

Just now, papajo said:

ok m8 you just want to say something opposite I am afraid... 

 

Nobody needs to have a GPU except we are in 2020 and most people use a PC and of those most game on it.

 

Besides that this is a PC forum I am discussing a matter that affects "us" = people that care about PC gaming.. and you are here like an oldy trying to say "in my times we had a stick and that was enough to entertain us" 

 

There are regulations for internet service prices and for car prices for example... those are "luxury items as well" 

 

 

It's just a GPU. You'll be complaining about how old and slow it is 3 years from now anyway. Just have some patience and wait, or if it really is that important to you, pay the money now and get one. 

 

We're not talking about food or water, or anything necessary for survival. In that case, I would have some sympathy for your argument. But it's a total luxury. You don't need it. 

[Wheresmehammer]

Just now, The_russian said:

I forgot to mention that in my original reply, no one is being forced to buy a graphics card. If someone is forcing you, at gunpoint or otherwise, to buy the newest greatest graphics card as soon as it is released, well then there are bigger problems. Computer parts are a luxury item especially when used for gaming, you don't need them to survive. 

I have never been forced to pay anything, i was always in control of how i spend my money.

I find it rather strange how purchasing responsibility does not exist with some people.

[papajo]

Just now, The_russian said:

I forgot to mention that in my original reply, no one is being forced to buy a graphics card

Check the steam database and add ALL expensive GPUs (so upwards of a price of a 2070) you'll see that the total percentage of people having those cards is a small 1 digit number.

 

So tell me that about 95% of steam gamers dont want to have a better graphics card and that their reason for not getting one wasnt that a better graphics card costs 600 to 1500$ so inteast they get a 1060 ti or whatnot. 

 

And ask yourself why are those graphics cards so expensive? before answering that read the OP though to get an idea 

[Arika]

1 minute ago, papajo said:

read the OP.

 

Try to find an RX 6000 or RTX 3000 (if you find them at what price? )

 

Check the prices of old and slow stuff like RX 5600XT RTX 2060 and so on...

 

Isnt that enough citation for you? 

no, you're using a chart as some kind of "proof" of inventory and price manipulation. You looked at a chart and drew your own consclusion, but that's not "proof" or evidence.

The steam hardware survey is entirely optional and opt-in. i don't remember the last time i agreed to do one, so the chart is already going to be wildly inaccurate.

 

Using the same chart i could make a claim that gamers hate AMD becasue they only buy NVidia based on the top 9 of 10 cards being from NVidia. I dont need to prove it, it's in the chart.

[Glenwing]

After some discussion, I have decided to unlock this thread for the time being.

 

We will be monitoring the thread. Keep the discussion civil and CALM. If it devolves into a shouting match, the thread will be locked again.

[papajo]

On 11/28/2020 at 1:48 AM, Arika S said:

no, you're using a chart as some kind of "proof" of inventory and price manipulation.

Never did that, unless I did not understand what you mean by "chart" if you mean the steam database I was referring to I did so in order to respond to @charlie_root who claimed that the prices are high because people are buying at such high prices yet evidently (since steam is one of the biggest DRMs out here if not the biggest) most steam users as in about or over 95% of them do not have such expensive cards.

 

And surely they didnt refrain from those expensive cards because they dont like them but rather because they cant afford them or are not willing to make such an expense, for this yes I dont have a "proof" but one couldn't prove this unless he had done some survey on said users but with the use of  common sense it is self-explanatory, I believe, that gamers (aka people that use Steam) would rather prefer a better performing graphics card rather than a lesser one if price of said graphics card wasnt an issue. 

 

On 11/28/2020 at 1:48 AM, Arika S said:

The steam hardware survey is entirely optional and opt-in

Doesnt matter it is still a big pool of people with statistical significance.  Steam has upvwards of 120 million users so even if 1% participates we are talking about over 1 million users. And probably more than 1% participate. 

 

On 11/28/2020 at 1:48 AM, Arika S said:

i don't remember the last time i agreed to do one, so the chart is already going to be wildly inaccurate.

So now you are contradicting yourself, you want proofs and references yet your argument is " I personally did not opt in in said survey hence the statistical significance is low" because you (a pool of 1 person) did not participate.... 

 

On 11/28/2020 at 1:48 AM, Arika S said:

Using the same chart i could make a claim that gamers hate AMD becasue they only buy NVidia based on the top 9 of 10 cards being from NVidia.

I dont know about the "hate" part but in general you would be right because Nvidia has vastly more sales in graphics cards than AMD 

 

 

This also indicates that the steam hardware database is on point more or less with the actual statistics. 

[TopHatProductions115]

I'd like to address this topic once, before it possibly gets Thanos-snapped. Comparing consoles and GPUs is not a good idea. Read this article for the first section of my reply. Ready this one for the second part.

 

Firstly, consoles and entertainment systems are strictly Consumer goods, involving the integration of other (Capital) goods and services to exist. GPUs can be treated as both Capital and Consumer goods, since both OEMs/ODMs and end consumers purchase them. But, for the sake of simplicity, we'll call then Capital goods - because they need to be integrated into a complete system to be used, no matter who you are.

 

Secondly, GPUs and game consoles/entertainment systems can both be categorised as luxury goods for most people (unless you use it for work or other important tasks). Luxury goods are sensitive to personal income, and have market demand that is directly related to personal income. End consumer prices for these two are going to differ - wildly.

 

Now that we've cleared that up, let us address the confirmed issues at hand:

1. There are scalpers for both consoles and GPUs, using automated means to acquire their own supply
2. There are non-gaming/enthusiast customers buying these products, for non-resale purposes
3. There are people re-selling GPUs and consoles at prices higher than MSRP
4. There is theft occurring, post-purchase - (people robbing mailmen, the mailmen themselves, etc.)

This affects the market in (at least) the following ways:

1. Reduces supply from official stores and resellers. Prices for new product may rise naturally if it continues into long-term.
2. Increased demand, on a reduced supply - from miners, scalpers, gamers and enthusiasts, professionals, etc. Prices for new product may rise naturally.
3. Artificial price increase, imposed by a market force that holds a temporary supply. This will impact both prices for new and used products (stagnant/rising prices).
4. Sellers and resellers who have to deal with theft regularly will incur increased costs as well. This cost can be passed down in multiple ways, outside of product price.

 

I'd also like to mention and address the fact that integrated OEM/ODM products tend to be made with tighter margins (and sometimes even at a loss), compared to other products. Yes, both the consoles and the new Radeon cards use RDNA2. These products are also impacted by similar market forces. But they are not comparable in design and end consumer price. In the end, someone has to pay for R&D.

 

They are designed for different uses. A game console is a purpose-built, tightly-controlled entertainment platform/solution with few end-product variants, that is customised and tuned for a relatively limited role - gaming and entertainment, nothing else. GPUs enable the former, but are also capable of general purpose compute. They also will have more variants on the market (AIBs, OEM board designs, chipset SKUs/models, etc.), and will need to be compatible with more types of software (ask any scientist or engineer who uses a FirePro/Quadro). Gaming GPUs are also possibly expected to clock just as high as, if not higher than their integrated counterparts - because discrete GPUs don't have to necessarily fit in the same power and thermal constraints as their integrated counterparts.

 

Guess which one has consistently higher overall market supply (facing actual end users - not OEMs/ODMs), between GeForce/Radeon GPUs and game consoles. Guess which one is more expensive to initially design and manufacture. Guess which one requires more testing and certification, to ensure expected performance results and capabilities.

 

Not saying that there aren't some sketchy things happening right now, and that prices aren't cruddy right now. But I find your reasoning to be suspect.

 

Bonus Link, for those who can discern fact from fluff:

https://www.reddit.com/r/PS5/comments/fohq1l/ps5_silicon_lottery/

[papajo]

9 hours ago, TopHatProductions115 said:

I'd like to address this topic once, before it possibly gets Thanos-snapped. Comparing consoles and GPUs is not a good idea. Read this article for the first section of my reply. Ready this one for the second part.

 

Firstly, consoles and entertainment systems are strictly Consumer goods, involving the integration of other (Capital) goods and services to exist. GPUs can be treated as both Capital and Consumer goods, since both OEMs/ODMs and end consumers purchase them. But, for the sake of simplicity, we'll call then Capital goods - because they need to be integrated into a complete system to be used, no matter who you are.

 

Secondly, GPUs and game consoles/entertainment systems can both be categorised as luxury goods for most people (unless you use it for work or other important tasks). Luxury goods are sensitive to personal income, and have market demand that is directly related to personal income. End consumer prices for these two are going to differ - wildly.

First this whole thing does not  need to exist you just lost time typing it...  you are trying to perplex a simple thing. 

 

I was comparing cost of raw material and similar manufacturing processes to indicate that graphics cards production cost is a very tiny fracture of their pricetag. 

 

And I used a console just a perspective of how other people use same technologies (such RDNA 2 gpu architectures) with lots more of adding cost pcbs and active components (controllers, CPUs etc)  yet having a small production cost (compared to a graphics card price tag) 

 

 

Also graphics cards (in particular the ones I am talking about aka the consumers versions of AMD and Nvidia e.g GTX RX RTX skus)  are consumer goods 

 

A "thing" is a capital good if a company uses it to produce a product or service and profit over it.  For example a toothbrush could be a capital good if it belonged to a company and was used by its employees during workhours (E.G a restaurant that sales more because its waiters have always a nice clean and white smile so it demands from said waiters to use the provided toothbrush to clean their teeth regularly )  if the  exact same model of toothbrush exists in your toilet and you use it for personal hygiene outside your working hours then its a consumer good

 

And for that thing being a capital good changes nothing in terms of if its ethical the people that provide it to exploit their clients or illegal price gauge it or anything related to that. 

 

So even if they were capital goods (which they are not and they are not taxed as that either) it still doesnt change a thing...

 

9 hours ago, TopHatProductions115 said:

Now that we've cleared that up, let us address the confirmed issues at hand:

1. There are scalpers for both consoles and GPUs, using automated means to acquire their own supply  <-- which is irrelevant both because it is happening to both new consoles and new graphics cards (if it is happening on a meaningful scale because you can not know e.g if AMD did provide an amble supply of GPUs and scalpers got them all or if AMD did not supply that many GPUs to begin with) also you assume we are talking here  only for the newly released lines. what about the 1 or 2 year old Graphics cards (5700 xt RTX 2060 2080 etc) which still after all those years-and while having healthy supply- they keep the pricetags and many times even higher compared to launch?
2. There are non-gaming/enthusiast customers buying these products, for non-resale purposes  <--- which is irrelevant and doesnt affect anything related to the topic
3. There are people re-selling GPUs and consoles at prices higher than MSRP <--- yea infact most of the partners
4. There is theft occurring, post-purchase - (people robbing mailmen, the mailmen themselves, etc.) <-- again why you are overcomplicating things there is theft occurring with everything in life so its an static and irrelevant factor. also ships sink,,, trucks burn, shops get on fire... so what? dont make something simple so complicated by  introducing unnecessary complexions

 

9 hours ago, TopHatProductions115 said:

I'd also like to mention and address the fact that integrated OEM/ODM products tend to be made with tighter margins (and sometimes even at a loss), compared to other products. Yes, both the consoles and the new Radeon cards use RDNA2. These products are also impacted by similar market forces. But they are not comparable in design and end consumer price. In the end, someone has to pay for R&D.

First no matter at what loss (I even theorized a 100% loss that still doesnt make gpu prices look good also in the OP of this topic you can find a reference that calculated the production cost of an xbox series x at 460-520$ so their loss is 21$ or so since they sell the thing @499) 

 

Secondly you are losing the grasp of how things scale cost.

 

 

In a retail consumer GPU (e.g RX 6800 xt) you get 

 

1) A pcb with some passive components and a CHIP with ram as active components 

2) a cooler (made of the same material your Pepsi can is made of ) with some thin fans slapped on it. 

 

 

On a console (and this is the reason why I used a console as a reference for production cost ) you get 

 

1) The same architecture GPU with almost similar amount of CU units 52 vs60 on the 6800 xt

 

+ Bigger PCB many more passive components

 

+ A damn 8 core Zen2 ryzen @3.8 GHz (<----pause a thing how much this costs on its own)

 

+ an SSD (<-- think of the COST)

 

+ Bluetooth wifi module ( <--- again think of the COST)

 

+ a console wireless controller with battery ( <---- THINK OF THE COST)

 

and many more things such that drive the cost up and are not present in a graphics card package such as calbles plastic shroud of the tower etc

 

Now think that this console production cost is e.g 520$  and subtract all the cost of all the things that are not present in a graphics card package(so basically everything besides the RDNA2 chip and the ram and the pcb although consoles have more and bigger pcbs) 

 

So

 

520 - Zen 2 CPU cost - wifi Bluetooth cost - controller cost etc

 

 

You will end up with a small 3 digit number (and most likely a two digint number as in eg. 80$ or so)  obviously you need to add a profit for the card as well... but how much is too much? Therein the problem lies because up unitl a point you are just price gougingand profiteering 

 

Now think  that e.g  a RX 5700 XT (older architecture lesser performance that has much stock and exist for a year now) costs about 400-500$ (so e.g about 420$ in profit!! if we assume 80$ production cost) and has not fallen an INCH in price after the 6000 series announcement in contrary its price has been increased since launch! 

 

Same goes for nvidia ofcourse which is not a saint either in fact I believe Nvidia price gauges and sandbags even more I am just using AMD to keep the production cost more related to the console production cost I am referring to.  

 

And tell me how this is fair 

 

 

 

[TopHatProductions115]

Take a look at the last 4 paragraphs and the bonus link. I think they answer about half the questions you asked. The Zen 2 chip and GPU in the consoles are clocked lower, and fit in a lower power envelope. I'm starting to repeat myself. Also, economics isn't about fairness. It's about who's willing to pay what price, to get the goods and services. If you want fair, then you'll have a hard time finding it this day and age.

[papajo]

1 hour ago, TopHatProductions115 said:

Take a look at the last 4 paragraphs and the bonus link. I think they answer about half the questions you asked. The Zen 2 chip and GPU in the consoles are clocked lower, and fit in a lower power envelope. I'm starting to repeat myself. Also, economics isn't about fairness. It's about who's willing to pay what price, to get the goods and services. If you want fair, then you'll have a hard time finding it this day and age.

Well what about about looking (and spend a few minutes about thinking) what I wrote to you? (btw the bonus link is about a reddit post talking about PS5 silicon lottery again unrelated to the subject) 

 

How does their lower clock mean anything in terms of production cost??? Especially when compared to older architectures(e.g a 400$ RX 5700 XT) ? (on top of that the GPU has the same base clock 1.8Ghz) 

 

Wafer production cost is the same if we are talking about same architecture, yield quantities are the ones that play a part in dictating the price but that does only mean that its a slightly higher yield than a particular GPU namely the RX 6800 which has 8 more and has (supposedly at least because you cant find one at that price) a msrp of 580$

 

If you think about it an RX 6800 xt (which has 12 more cu units than the RX 6800) has a (again supposedly) MSRP of 649$ so 60$ for 12 more CUs.

 

 

On top of that (and I repeat my self because for some reason the elephant in the room is ignored here) 

 

 

Besides the equal amount of same VRAM, and same architecture RNDA2 52CU 12TF @1.8GHz GPU

 

The xbox series X  has an entire 8 core zen 2 CPU! 

 

It has a very fast custom SSD

 

It has a Wireless controller

 

It has a wifi/bluetooth chip

 

It has tons more material and accessories. 

 

 

 

why do you ignore all that stuff ? do you think that Microsoft gets that FOR FREE? 

 

Or do you think that increasing the clock of that RDNA GPU from 1.8 to e.g 2.2 GHz will cost microsoft as much as the CPU+the controller+ the the passive components + the other PCBs ?????

 

The clock is just a setting which they chose to keep thermals low. Its not a production feature that makes them cheaper. (yes ok to be fair it probably would mean that they would need some beefier power supply and maybe an additional fan and make the shroud a little bigger etc but the cost associated with that does not outweigh in the slightest the combined cost of all the extra stuff it actually has such as the CPU the optical drive the PSU the ssd the shroud the controller etc) 

 

 

 

A zen 2 CPU would cost at least 60$ if not more... a controller would cost at least 15$ if not more the ssd costs at least 30$ if not more 

 

Only with them 3 parts (and there are others as well) and the very low prices I mentioned for them we can deduct 105$ from the maximum prediction of 520$ (for the entire console) or in other words 415$ and we still have not accounted for a lot of stuff that is present in said console...

 

And a simple PCB with a RX 5700xt chip on it less ram and a cheap cooler slapped on it costs 400$

 

If you cant weigh the scale and distinguish the gravity and significance of that I dont know what more I could tell to you. 

[papajo]

I found this nice chart on a dated reddit topic on  graphics card production cost, source as seen in the picture is mercury statistics I couldnt access it for free though so thank god for reddit and the freebies 

 

 

 

 

In other words back then a GTX 580 had a total of 205$ in production cost (mind the 120$ is not the production cost of the GPU but the price it was sold to 3rd parties such as e.g EVGA and in general all these are estimate on bulk prices those 3rd parties get for purchasing at the volume they did back then) 

 

 

Assuming more efficient production (since this is like 10 years old now)  and higher production rate/yields this cost (for the components etc) should probably be at least slightly lower if not considerably lower. 

 

 

EDIT: and for those who will say vram cost is higher and the capacity is higher well no, (because of efficiency and scale) an average guy like me (if he has the money) can order 1000 of them @ 10$ just by googling on allibaba for the latest GDDR6 samsung chips https://www.alibaba.com/product-detail/Own-stock-K4ZAF325BM-HC14-Integrated-circuit_62190473221.html?fullFirstScreen=true

 

 

these are @ 8GB capacity so 16 GB will end up being 20$ (and I bet big manufacturers like asus etc can get better prices than a random guy from alibaba because they have long history of trading with specific manufacturers so the price is not only determined by the quantity ordered but also by offering even bigger discount to "loyal" returning/historic big league customers) 

 

 

Yet the retail prices (Even for older generation cards) skyrocketed many of those having a pricetag higher than 1000$!!!!! 

 

Back then you paid 500$ and got a flagship (597$ if you want to count inflation but inflation of currency doesn't reflect 1:1 consumer goods prices, I only mention it because I am sure that the people who just want to diss without thinking about the arguments will mention inflation.. but I digress )

 

now with 500$ you get a low-mid range card lol (actually as a consumer I should cry instead of laughing but I guess that's the guy I am  ) 

 

[airborne spoon]

I don't see how you cant seem to grasp the concept that everyone is telling you. Its this simple consoles are the same as printers they are sold at a loss meaning NO profit is made when its sold to the end user. The money is made up in spades by the sale of games and stuff, just like printer ink is where they make up the difference on printer sales.

When you buy a GPU there is no money to be made in any way after the sale so they have to sell it for a profit just like any other goods. this is a very simple concept and i don't see why you don't understand it.

[papajo]

1 hour ago, airborne spoon said:

I don't see how you cant seem to grasp the concept that everyone is telling you. Its this simple consoles are the same as printers they are sold at a loss meaning NO profit is made when its sold to the end user. The money is made up in spades by the sale of games and stuff, just like printer ink is where they make up the difference on printer sales.

When you buy a GPU there is no money to be made in any way after the sale so they have to sell it for a profit just like any other goods. this is a very simple concept and i don't see why you don't understand it.

Because maybe I proved them wrong? 

 

Without disproving my sources or arguments many people telling a thing doesnt make said thing right..

 

I already referenced a source that estimates the production cost of an xbox series x at 460 to 520$ (which means that according to that reference the loss is about 21$ +- whatever margin of error said analyst could have in his estimations) 

 

Furthermore in the post directly above your reply I uploaded a chart with graphics card production costs.

 

I could go to a flaterther forum for example and I'm pretty sure all the people there would tell me the earth is flat (not that I believe that there is a correlation with this forum I am merely showcasing that because many people say something -especially if they  apparently didnt read my posts as I presume you did not since you seem to ingore both the estimation for the console and the production cost chart in my post directly above yours along with other sources/references I posted - doesnt make it right) 

 

 

[papajo]

Also some other interesting charts 

 

 

 

(source https://www.nextplatform.com/2018/02/09/just-large-can-nvidias-datacenter-business-grow/) ****

 

 

Look at the orange line its income from selling gaming/consumer graphics cards

 

 

Here is how many discrete graphics cards (in units) nvidia sold the past years 

 

 

 

 

Notice that it sold (in units) more or less the same number per year on average but also notice that the profits increased despite sales being more or less the same (in fact kinda decreasing a bit for the years showcased -I wonder why maybe because less people can afford to buy at such prices?-). 

 

Which means what? maybe that they started to inflate their profits? 

 

Also I couldnt find any chart that had a wider data in terms of years but Ihere is a chart for 2017 and 2018

 

(source: https://www.techquila.co.in/nvidia-market-share-vs-amd-market-share-graphics/)

 

So they sold about as many units as in 2015 yet the income profit skyrocketed starting from 2017

 

Why is that? Maybe because that's the first year Nvidia did surpass itself in crazy markups introducing the pascal graphics cards (GTX 1000 series) for example having the flagship cost more than 1000$ ??? 

 

Coincidence?  

 

 

And guess who's paying Jensen's leather jacket and Dr Su's right hand watch  we the consumers (less of us -because many cant afford anymore- who cover up the loss in units by paying extra in pricetag per unit! ) 

 

In other words they dont care about scaling production to suit our needs it's much better for them to limit production and have  paper launches etc and have hefty price tags to profiteer on our backs instead of making honest profits by actually meeting the demand and trying to give the best products for gamers at mutually profitable prices, since gamers seem to be easy to manipulate! 

 

 

 

****It's ironic that we see in that source the same marketing language (as every "don't know better" youtube channel and pc website) which Nvidia tries to propagate about "increased demand" while we clearly see that demand is more or less the same! they just rely on that nobody wont dig for the actual numbers!(notice that the two charts units per year and  income per year are never present in one single website source, it is either one chart or an other per website/source so you cant correlate that if you dont actually try to connect the dots)  

 

Thus presenting them as "poor good nvidia" (and amd)who try the best to meat demand but cant afford it hence they raise the prices...

 

While evidently the exact opposite is true..

 

 

They increase the pricetags to have even bigger profits by selling same amount or lesser(<even better for them) units meanwhile we the PC gamers who made nvidia (and amd) what it is today get the short stick. 

 

 

 

 

 

[Overheal]

On 11/27/2020 at 5:58 PM, papajo said:

look at this beefy lump of components and junk in general....  white on the other side we have Graphics cards companies complaining that they supposedly cant hold MSRP because the cooler(some aluminium fins same metal as your cola can and a couple of small thin plastic fans) costs too much (a 5 to 30$ max cost on cards that retail well above 350$ ! ) These are the greasy carsalesman apologetics I hate because they are manipulating consumers minds in order to pray upon us!

There is far more consideration in the cost of the product than the raw materials. 

 

The Xbox One sold 51 million units, on a handful of SKUs, compared to a couple dozen SKUs (with only 1 refresh of the motherboard CPU/GPU specification) for either RTX 20 series or Navi cards, the majority of which are non-reference. Economies of scale certainly apply here. These companies spent considerable time and money designing aftermarket coolers, new parts require new CAD, CAM, re-tooling, and assembly processes; the fan shrouds alone could have tooling costs north of a quarter million USD per part ID and molding houses won't entertain orders of fewer than ten thousand (Not unless you're already a Whale-client, like BMW - as told to me firsthand by the VP of a Greenville based molding supplier). 

 

Similar story: Coca-Cola, while it has many, many canning facilities around the world, still has a standardized, regimented and highly mass producible design, where it manages to advantage *billions of dollars in capital required* to produce hundreds of millions of cans per day, for pennies each. In short: GPU manufacturers, and/or their finstack vendors, aren't at nearly the scale of a coca-cola can, or even at the scales in the PC GPU market to be in parity with the scale of console manufacturing. 

 

Let's zoom in on this a bit more: this year, AMD announced it was the first company to reach sales of 500 million GPUs, since the restructure in 2013/acquisition by AMD. That is of course the same year the Xbox One launched (51 million units since 2013). But, again, the Xbox One had basically a single cooling configuration: 

 

.. I think you'd agree that we'd have to divide 500 million by 7 (6?) card launches, divide that by number of cooler and product envelope designs (eg. RGB, which adds further cost to parts and assembly and board support). Some rumors online suggest Nvidia sold 20 million RTX 20 series, which again had multiple AiB designs. To say nothing of most AiB SKUs involving aftermarket board designs, refreshed components, and post-reference overclocks, which incurs a design cost to test and validate. Now, GPU vendors of course try to re-use cooler designs, but things still change between product SKUs overall. At the end of the day, if the argument is that AiBs should be sold at the reference price, then you must assume that there is no value to the aftermarket design: so just buy the reference design. I think any reasonable person would agree that is not the case, and in fact we do find value in the aftermarket designs, hence their demand and supply. 

 

Perhaps Linus should do a video on why AMD and Nvidia don't just sell us bare GPUs, like CPUs, and leave it to customers to buy the cooler. 

 

 

 

[papajo]

1 minute ago, Overheal said:

There is far more consideration in the cost of the product than the raw materials. 

 

The Xbox One sold 51 million units, on a handful of SKUs, compared to a couple dozen SKUs (with only 1 refresh of the motherboard CPU/GPU specification) for either RTX 20 series or Navi cards, the majority of which are non-reference. Economies of scale certainly apply here. These companies spent considerable time and money designing aftermarket coolers, new parts require new CAD, CAM, re-tooling, and assembly processes; the fan shrouds alone could have tooling costs north of a quarter million USD per part ID and molding houses won't entertain orders of fewer than ten thousand (Not unless you're already a Whale-client, like BMW - as told to me firsthand by the VP of a Greenville based molding supplier). 

 

Similar story: Coca-Cola, while it has many, many canning facilities around the world, still has a standardized, regimented and highly mass producible design, where it manages to advantage *billions of dollars in capital required* to produce hundreds of millions of cans per day, for pennies each. In short: GPU manufacturers, and/or their finstack vendors, aren't at nearly the scale of a coca-cola can, or even at the scales in the PC GPU market to be in parity with the scale of console manufacturing. 

 

Let's zoom in on this a bit more: this year, AMD announced it was the first company to reach sales of 500 million GPUs, since the restructure in 2013/acquisition by AMD. That is of course the same year the Xbox One launched (51 million units since 2013). But, again, the Xbox One had basically a single cooling configuration: 

 

.. I think you'd agree that we'd have to divide 500 million by 7 (6?) card launches, divide that by number of cooler and product envelope designs (eg. RGB, which adds further cost to parts and assembly and board support). Some rumors online suggest Nvidia sold 20 million RTX 20 series, which again had multiple AiB designs. To say nothing of most AiB SKUs involving aftermarket board designs, refreshed components, and post-reference overclocks, which incurs a design cost to test and validate. Now, GPU vendors of course try to re-use cooler designs, but things still change between product SKUs overall. At the end of the day, if the argument is that AiBs should be sold at the reference price, then you must assume that there is no value to the aftermarket design: so just buy the reference design. I think any reasonable person would agree that is not the case, and in fact we do find value in the aftermarket designs, hence their demand and supply. 

 

 

 

I could elaborate on that but I wont since my initial console argument (which I used just as a reference before finding more concrete data) is now uncessery/obsolete hence I believe arguing on that would be fruitless.

 

Please read my latter posts namely these two 

 

 

 

Which in cobination cement my initial argument without the need of a analogus example but with raw data instead. thanks

 

 

 

 

[Overheal]

Yes, that is the cost of production per unit. It doesn't factor in all O&M. If it was a simple as Company's profit = Sale Price - Production Cost, these companies would be absolute giants making profits of over 50%. In reality AMD operates at net profit of 10.7%, for instance, and their product is GPUs, which must fund the whole enterprise. 

 

Furthermore this table you presented, is a summary. It doesn't tell us the cost of high end thermal solutions. And the Logic and Clock costs are misleading: the cost of flashing an individual board BIOS could easily be $0.75 cents (the main driver of this cost is how much time it takes during the assembly, if it should ideally be only a few seconds or easily parallelized) but doesn't reflect the cost of finding and validating those factory OC settings. 

 

 

[papajo]

11 minutes ago, Overheal said:

Yes, that is the cost of production per unit. It doesn't factor in all O&M. If it was a simple as Company's profit = Sale Price - Production Cost, these companies would be absolute giants making profits of over 50%

Which I just presented in the 2nd post I showed you.

 

The smaller partners (e.g Zotac ) obviously get a smaller cut because they sell less units per partner since the total units sold e.g for nvidia presented above are shared among Nvidia and the partners (to whom nvidia sells the GPU and vram) so if for example 2017 had 22 million units sold each partner (namely 9 https://www.pcseekers.tech/2020/12/rtx-3060ti-aib-partner-custom-cards-list.html but there are other too e.g chinese ones smaller ones and OEMs )  which would mean (obviously not the case but just as a ballpark reference ) that each of them sold less than 2 million GPUs

 

 

Last but not least I am not sure how big of a pie AIBs get (some get bigger and bigger though but its harder to find financial data specifically from graphics cards for said AIBs) because the pricetag gets to what it is including other expenses such as shipping, retailer cut and taxes 

 

But nvidias profits are as is and the units sold per year as is so please revisit if you ( havent read it already) the 2nd of the two posts I linked you above.