Massive AMD Graphics Price-Cuts Across The 7900 Series.

[TassieTim]

pccasegear got the Gigabyte Radeon HD7990 6GB marked at $au899 atm dropped down $250 from their normal price ....was thinking about getting a Sapphire HD 7970 6GB Vapor-X Edition before but that's still marked at $689 , wonder if it going be worth the extra 200 bucks or not. me think so.....

getting my taxes done this Monday, hope it drops a bit more when i get tax refund back and wait to see new series prices 1st maybe

[TechFan@ic]

I think what you guys are missing is, AMD has made their money on these cards already, how long have they been out and how many units have they sold. They have cut prices on these cards for the next line of cards due to come out and that is where they will make the money. Also, think of all the money they will make on new console releases as well. I don't think they are hurting at all. 

Their graphics department broke even last quarter, making no profit what so ever, the gross margin of the company fell to 40% from last year's 45%, Nvidia's gross margin however rose to 55% from last year's 50%.

So actually AMD's graphics department is losing more money while Nvidia's graphics department is making more money,

All of these insane price cuts & game bundles have consequences.

[IGJoe2192]

Their graphics department broke even last quarter, making no profit what so ever, the gross margin of the company fell to 40% from last year's 45%, Nvidia's gross margin however rose to 55% from last year's 50%.

So actually AMD's graphics department is losing more money while Nvidia's graphics department is making more money,

All of these insane price cuts & game bundles have consequences.

 

For the moment, yes. 

[TechFan@ic]

For the moment, yes. 

You think long-term this strategy will be effective ?

[TopWargamer]

I feel so ripped off...just a month or so ago I got my 7950 for $340.

[eshbop]

You think long-term this strategy will be effective ?

 

Definitely not. But they needed to try something ASAP to make the average person think twice before just picking the default, which in most cases is nvidia.

 

With the beginning of the transition towards higher refresh rates, higher resolution and the fact next gen consoles may (probably) result in games becoming more demanding people may be looking to upgrade their couple of generation old GPUs (which is what most people are running). So it's the right time for them to make a bit of noise, before this all happens.

[Nort]

You think long-term this strategy will be effective ?

 

I do, a few months ago whenever you went into a forum about graphics cards all you would see is threads about why Nvidia is better. Now there's an equal amount of threads saying why you should buy AMD.

[Xelithium]

I do, a few months ago whenever you went into a forum about graphics cards all you would see is threads about why Nvidia is better. Now there's an equal amount of threads saying why you should buy AMD.

Cause AMD is dirt cheap.

[IGJoe2192]

You think long-term this strategy will be effective ?

 

I think maybe you are missing the point.

[RectangularBox]

Funny, I think you could find cards fron Nvdias 500 series more expensive than this. Not to mention 600 series is still basically full retail price, and here amd is slashing prices on their current hardware. I also don't think AMD is making a lot of money on processors, so for them to do something like this means that they have a lot of faith in their next gen hardware. Right now it seems drastic but maybe it will push sales up... not sure, but I can tell you that the 7950 is one hell of a card! 

[TechFan@ic]

I think maybe you are missing the point.

What is the point ?

[eshbop]

Slashing prices gets people talking as well. It'd be pretty hard to equate this into a dollar value, but it's worth something.

[TechFan@ic]

Slashing prices gets people talking as well. It'd be pretty hard to equate this into a dollar value, but it's worth something.

I don't remember exactly who said this, but someone said that the most effective form of PR is cutting prices.

[eshbop]

I don't remember exactly who said this, but someone said that the most effective form of PR is cutting prices.

That's it. You can bet that almost every computer hardware forum has or will have a thread just like this one. A few of them at that considering how many times they've dropped prices. And it's on hardware news sites everywhere. Etc

[martinrox1568]

Indeed, if you look at the margin structure of Nvidia, you find that the cost to make a 770 & a 760 is less than the cost to make a 7970 or a 7950 because the die size is smaller (292mm vs 352mm) and they skimp on the memory so to speak (2GB vs 3GB) but they sell their cards for higher prices, that's why they make more money on every card they sell compared to AMD on average .

Don't take this the wrong way but what did u think people meant when they say that AMD give you more bang/ buck

[TechFan@ic]

Don't take this the wrong way but what did u think people meant when they say that AMD give you more bang/ buck

AMD already gives you more bang for your buck without any of these price cuts or bundles that's why I don't understand why as a company they find it necessary.

Although personally I would prefer much more to see a company cut prices, rather than spend money on PR to keep prices up, both end up increasing sales, but one is far better for the consumer than the other & for that I say Kudos AMD.

[carolkarine]

I'm not sure how AMD can make any profit on a 352mm GPU die (7950), selling it for less than $200 that would barely cover the silicone cost.

I expect they're just trying to move stock of what's already made.

[DGPC]

With price cuts like these, I think I'll learn soon enough how good of an investment a 780 really was.

[Ashwin]

Yeah, a company has to literally go bankrupt to give you this much value.

Well the price cuts are most probably a marketing stint, to get some clients back to their space.

[mgsstar]

Guess that they want to sell out their stock quickly so they can prepare for the new AMD cards. This can now give these cards an amazing price to performance ratio imo.

[Humbug]

You think long-term this strategy will be effective ?

 

The only thing I can think of is that they want to increase their 'share of mind' amongst gamers. Part of the problem is that amongst the more casual part of the PC gaming community (who don't read benchmarks etc) the geforce name is just synonymous with video cards; much more so than Radeon. Maybe AMD want to address that in the short term by increasing their userbase, obviously if this pricing strategy is unprofitable then they can't keep it up for long... I guess AMD wants to quickly get into a position where they have 50% of the discrete video card PC market, along with 100% of the console market. Then devs take notice and optimize for them, and satisfied customers hopefully want to buy Radeon again next time... indirect benefits to APU performance etc...

[Wulfgar]

I'm not sure how AMD can make any profit on a 352mm GPU die (7950), selling it for less than $200 that would barely cover the silicone cost.

 

Probably a form of loss leading, where they sell something at 0 or less net profit to help promote something else.

[Humbug]

Probably a form of loss leading, where they sell something at 0 or less net profit to help promote something else.

Like what?

[nicehat]

Their graphics department broke even last quarter, making no profit what so ever, the gross margin of the company fell to 40% from last year's 45%, Nvidia's gross margin however rose to 55% from last year's 50%.

So actually AMD's graphics department is losing more money while Nvidia's graphics department is making more money,

All of these insane price cuts & game bundles have consequences.

 

5% decrease in the graphics and visual solutions segment. The 5% offset was primarily due to declining game console royalties. This is expected to increase when next gen consoles are released later this year. Since we really dont know the specifics on cost per unit (including game bundles) everything is up in the air. My opinion is that AMD is vying for market share. Once they establish it, they charge royalties to developers to fully harness core technologies especially for cross platform ports. 

 

Financials:

http://ir.amd.com/phoenix.zhtml?c=74093&p=irol-newsarticle&ID=1839127

[gliliumho]

Good time for me to get another 7970 for Crossfire setup.