Why is AMD releasing the RX series so cheap?

[ivan134]

24 minutes ago, stconquest said:

Some of these comments are indicative of how Nvidia gets away with gouging the consumer market.

 

AMD has done, and would probably do the same if they were on top.

 

All about the bad consumers.

It's amazing the amount of nonsensical responses this got.

 

@Supermangik, @JefferyD90has the right answer. It's just economics. The price of a GPU has nothing to do with it's performance, but rather it's production cost. Since we're on a smaller node this generation, you can fit more performance into a smaller surface area as you can see with the 314mm2 GTX 1080 vs the 601mm2 980 ti. The smaller the chip, the cheaper it is to produce. Polaris 10 is only 232mm2. Has nothing to do with using cheap parts or whether Nvidia is crushing AMD in the wet dreams of some of the morons who responded.

[ivan134]

Also, Nvidia is price gouging as usual and idiots are lapping it up.

[Big-G]

2 minutes ago, ivan134 said:

Also, Nvidia is price gouging as usual and idiots are lapping it up.

How sure are you it's Nvidia and not the supply channel partners and/or retailers just making an opportunistic buck?

[ivan134]

1 minute ago, GidonsClaw said:

How sure are you it's Nvidia and not the supply channel partners and/or retailers just making an opportunistic buck?

Because, even without the Fanboy Edition and price going up because of supply and demand, a 314mm2 chip does not cost $550 nor does it 25% cut down cost $379.

[BOT Zee]

I dont get it. Are you dumb? Every year new phones come out does the price of the phones increase every single year or does it stay the same? If it increased every year phones would cost 5000$ by now, yet they dont. Why would a 480 be more expensive than when a 380 came out? They are the same product category so they should  be the same price. I can bet you ill be buying a gtx 1070 when it hits the 330msrp of the gtx 970 its the same product category i dont wanna pay more for the same style of product.... when amd launches its 490 and 490x watch the 1070 and 1080 get price drop

[stconquest]

3 minutes ago, ivan134 said:

Because, even without the Fanboy Edition and price going up because of supply and demand, a 314mm2 chip does not cost $550 nor does it 25% cut down cost $379.

Hey, they want to cover the cost of that multi million dollar retreat they had for tech press affiliates.

[Big-G]

1 minute ago, ivan134 said:

Because, even without the Fanboy Edition and price going up because of supply and demand, a 314mm2 chip does not cost $550 nor does it 25% cut down cost $379.

Cool, so not answering my question. Is there any proof that Nvidia themselves are the culprits or as I mentioned, the rest of the supply chain being greedy?

 

It's very easy to blame Nvidia for everything that's wrong in the world... but there's a lot of other vultures on the carcass.

[ivan134]

1 minute ago, GidonsClaw said:

Cool, so not answering my question. Is there any proof that Nvidia themselves are the culprits or as I mentioned, the rest of the supply chain being greedy?

 

It's very easy to blame Nvidia for everything that's wrong in the world... but there's a lot of other vultures on the carcass.

I am not talking about what the cards are selling for now (my fault I wasn't clear), I am talking about the MSRP. The MSRP for the 1080 and 1070 were ridiculous to begin with.

[stconquest]

1 minute ago, GidonsClaw said:

Cool, so not answering my question. Is there any proof that Nvidia themselves are the culprits or as I mentioned, the rest of the supply chain being greedy?

 

It's very easy to blame Nvidia for everything that's wrong in the world... but there's a lot of other vultures on the carcass.

Pay attention here... they released a stated MSRP of $599 for the GTX 1080.  Then they release their shitty reference design for $699.

[ivan134]

2 minutes ago, stconquest said:

Pay attention here... they released a stated MSRP of $599 for the GTX 1080.  Then they release their shitty reference design for $699.

Oh yea, my mistake. MSRP for the 1080 was $599 not $550. That was price of the also overpriced 980.

[Mira Yurizaki]

The amount of fan wanking in this thread is amazing.

[Megazero]

Well... before anyone firing any more blaming or defending, let's all remember one thing: This is business.

Why do you think Nvidia can push the price? Because they know for a fact that people will buy it as soon as it comeout, and in reality that's the truth. Is it good for the consumer? No. 
 

Why do you think AMD price their card that low? Because that's how they can get customer to buy it. Do you think if they are in the same situation/market share with Nvidia they would hesitated to put the 480 at $300 or so? heck no. If they have like 50% market share and tie up with Nvidia, their price would be alot higher than the proposed $200 now

This is business. They will do whatever they can to maximize the profit. 

So how do we get a lower price 1070 and 1080? We cant. Technically if we all agree to not buy an overprice product then they would lower the price eventually, but you know that is simply impossible. The only way for 1070 and 1080 price to be lower is for AMD to actually release a product that can compete with 1070 and 1080 in pure performance at ~$200 cheaper price. Why $200? Because if their card is only ~ $50 to $100 lower than the 1070 and 1080, AMD as they are now cant compete with Nvidia market share + software Nvidia have like Shadowplay, Ansel and other things and people will still pay $50-$100 more for those features. 

 

[JefferyD90]

40 minutes ago, ivan134 said:

It's amazing the amount of nonsensical responses this got.

 

@Supermangik, @JefferyD90has the right answer. It's just economics. The price of a GPU has nothing to do with it's performance, but rather it's production cost. Since we're on a smaller node this generation, you can fit more performance into a smaller surface area as you can see with the 314mm2 GTX 1080 vs the 601mm2 980 ti. The smaller the chip, the cheaper it is to produce. Polaris 10 is only 232mm2. Has nothing to do with using cheap parts or whether Nvidia is crushing AMD in the wet dreams of some of the morons who responded.

And the price really doesn't have much to do with production cost either...  It has to do with supply vs demand.

 

Supply of the RX 480 is going to be high SIMPLY because it is easier to produce, which makes it cheaper.

 

Demand of the RX 480 is going to be moderate (although it does have a lot of hype) because most gamers are going to go for a more high end solution.

 

DEMAND

------------

SUPPLY

 

If you have 10 people demanding a video card, and you only have one to give, what does the formula above tell you?  That it will be worth 10x what it would typically be worth.  Change the formula around and you get the reverse effect.

 

Because the card is easier to produce (it uses less materials), they will produce MANY of them.  Increasing supply.

 

 

 

[ivan134]

6 minutes ago, JefferyD90 said:

And the price really doesn't have much to do with production cost either...  It has to do with supply vs demand.

 

Supply of the RX 480 is going to be high SIMPLY because it is easier to produce, which makes it cheaper.

 

Demand of the RX 480 is going to be moderate (although it does have a lot of hype) because most gamers are going to go for a more high end solution.

 

DEMAND

------------

SUPPLY

 

If you have 10 people demanding a video card, and you only have one to give, what does the formula above tell you?  That it will be worth 10x what it would typically be worth.  Change the formula around and you get the reverse effect.

 

Because the card is easier to produce (it uses less materials), they will produce MANY of them.  Increasing supply.

 

 

 

Cost of production is ALWAYS a factor in determining the price of a product. You never want to price below a certain point because you will not make a profit or even suffer a loss. For the sake of profit, the price can only go up depending on demand and supply after that. No company is a charity. There are some unique cases, like consoles where they can sell at a loss because they will make up for it in software since the cost of producing software is not as high as producing hardware, but that's about it.

[BrightCandle]

The RX 480 is very much the mid range card. Its a small die (234mm^2), its cheap to produce GDDR5 and a moderate width memory bus at 256bit. Because its a small die its also comparatively low power which means the power delivery mechanism is small and thus cheap.

 

A process change basically gives a manufacturer about 2x the transistors at the same price, Nvidia is using that to increase performance. AMD is using that to halve the price of the same performance. It isn't even the first time this has happened. Up until the 28nm process AMDs strategy was to release the mainstream card and address the high end with crossfire, they did it with the 4870, 5870, 6870 but it changed with the 7970. Nvidia on the other hand releases a mid size die (300-400mm^2) and makes that its initial high end until yields improve and then puts out a 500+mm^2 die for its true high end on a process and then usually the next process is out.

 

28nm was just an odd blip due to 20nm being useless forcing them to do a refresh on the same node which produced limited gains so die sizes increased on the mature process. What I think has changed is that AMD intends to create a larger die next year with Vega.

[JefferyD90]

21 minutes ago, ivan134 said:

Cost of production is ALWAYS a factor in determining the price of a product. You never want to price below a certain point because you will not make a profit or even suffer a loss. For the sake of profit, the price can only go up depending on demand and supply after that. No company is a charity. There are some unique cases, like consoles where they can sell at a loss because they will make up for it in software since the cost of producing software is not as high as producing hardware, but that's about it.

ABSOLUTLY NOT!  Look back at the AMD X3 CPU's.  Almost everyone of their early models were sold at a loss.

 

Losing $10 per CPU is TOTALLY worth it compared to scrapping whole warehouses.

 

Sometimes the best win you can get, is a small loss.

[incarnate]

27 minutes ago, JefferyD90 said:

ABSOLUTLY NOT!  Look back at the AMD X3 CPU's.  Almost everyone of their early models were sold at a loss.

 

Losing $10 per CPU is TOTALLY worth it compared to scrapping whole warehouses.

 

Sometimes the best win you can get, is a small loss.

They sold it at a loss after they couldn't sell it for profit. Don't kid yourself, they didn't create this gpu to sell it at a loss right out the gate.

[SLAYR]

28 minutes ago, JefferyD90 said:

ABSOLUTLY NOT!  Look back at the AMD X3 CPU's.  Almost everyone of their early models were sold at a loss.

 

Losing $10 per CPU is TOTALLY worth it compared to scrapping whole warehouses.

 

Sometimes the best win you can get, is a small loss.

The cost of a product is determined way before the product is ever produced, after the cost to make it is figured, but all products are originally designed to make a profit, otherwise what is the point.

[JefferyD90]

2 minutes ago, incarnate said:

They sold it at a loss after they couldn't sell it for profit. Don't kid yourself, they didn't create this gpu to sell it at a loss right out the gate.

I never said they wanted to sell it at a loss.  I'm just saying the market affects the price.

 

You certainly have a target price, but I'd say they are slightly below their original target.

[JefferyD90]

1 minute ago, SLAYR said:

The cost of a product is determined way before the product is ever produced, after the cost to make it is figured, but all products are originally designed to make a profit, otherwise what is the point.

Without a doubt products are made to make a profit, but the market could EASILY sway that in a huge way.

[SLAYR]

1 minute ago, JefferyD90 said:

Without a doubt products are made to make a profit, but the market could EASILY sway that in a huge way.

The only way amd will sell the 480 at a loss is if they could not sell them, but looking at some of the early benchmarks and seeing it perform conservatively about the same as a 390, and with all of the vr marketing i doubt they will be loosing money.

[handymanshandle]

They're going for a different market, something they know they can get a strong upper hand in, mostly because Nvidia has neglected that price bracket. I too had wished AMD was going to have something that more directly competed with the GTX 1070, but I'm starting to think that the 8GB version of the RX 480 might come pretty damn close to the 1070. 

[incarnate]

1 hour ago, JefferyD90 said:

I never said they wanted to sell it at a loss.  I'm just saying the market affects the price.

 

You certainly have a target price, but I'd say they are slightly below their original target.

I certainly get that, and I see now what you're trying to say. However, it is quite easy to confuse what you are saying.

 

Yes the market does effect the price, even pushing it to a loss, however the cost of production is always a factor, even when selling at a loss

[c00face]

So I searched around on Google, and found this article: http://neurogadget.net/2016/06/20/radeon-rx-480-vs-geforce-gtx-1080-comparison-in-vr-performance/33577

 

Amazing! I can see why now AMD made this move to sell RX 480 series at a lower price. They're gambling on VR technology, and being the leader in the movement. With the lower price, VR can be pushed further, and AMD RX series will be the preferred choice in gaming console, for VR development because of their lower price compared to nVida 1080. Companies would use AMD as their preferred brand, and if when VR gaming does become a success, AMD already has their foot in the game while nVida would need to play catch up by developing a cheaper alternative to consumer concerning VR.

[hex4]

Because AMD loves me, i am their new special person.