About that pricing AMD; you sure you want to stick with it?

Subject: General Tech | March 26, 2012 - 01:45 PM |
Tagged: gpu, pricing, nvidia, amd, radeon

AMD has spent a lot of money developing GCN and it shows with products that provide better performance than the previous generation and do so with less power consumption, a hard trick to pull off.  There are also numerous other architectural changes in the three current families of Southern Island cards which benefit users, but most will be focused on faster graphics without the need to upgrade their PSU.  Until last week, since AMD had the fastest GPU going period, as well as much better price/performance numbers than NVIDIA's choice, there was no reason for AMD to consider changing their pricing structure as they need to recuperate the amount of dollars spent on R&D as well as manufacturing.

Last week the GTX 680 changed that, as not only did NVIDIA steal the performance crown back from AMD but they also successfully reduced the power consumption which was the Achilles Heel of Fermi.  Even worse news for AMD was the pricing that NVIDIA attached to their flagship Kepler product, at $500 they are priced below AMD's HD 7970 by between $50 to $100.  AMD's only hope is that the process problems at TSMC will keep the availability of the GTX 680 down, which it seems to have as NewEgg has run out of that card.  Hoping that your competitor cannot keep their stock up is not exactly a good model to run your business.

Unfortunately any price change AMD makes will have repercussions on many models.  The 7950 averages about $460 which is far too close to the GTX 680's price since the performance is not that close, however dropping the HD 7950 towards $400 makes the HD 7870 at $360 a little uncomfortable.  That is going to have an effect on AMD's profitability, since they likely set out their accounting based on the current pricing of the Radeon series and will have to recalculate a lot of numbers to lower price and still remain profitable.  However painful a process that might be they need to think of it sooner, rather than later; NVIDIA has more Kelper cards in store and they are not going to cost more than the GTX 680.

So far we have not heard any substantiated rumours about price changes from AMD but you can speculate that they must be coming.  For now you should first decide how much your budget can manage and then start looking for specials at retailers that bring the cards down to the price you have decided you can afford.  If they aren't low enough today then wait a few days as the GPU market is going to be decidedly unstable for the next while. 

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March 26, 2012 | 02:12 PM - Posted by dagamer34 (not verified)

AMD had a nice run but it's hard to recommend the Radeon HD 7970 over the GTX 680 right now, and that's kind of sad. But it doesn't really matter to me since my 6950 will go on for quite sometime.

March 26, 2012 | 04:10 PM - Posted by Matt Smith

It's good to see competition. Good for us, anyway.

March 26, 2012 | 05:14 PM - Posted by andrei (not verified)

I don't know what's wrong with all of you that demand amd hd 7970 to lower their prices... "because nvidia gk104 is better" ??? what?
I agree that both companies must lower their prices, both of them! not just amd.
I will explain myself now:
In way you are talking means that nvidia priced their card correctly, but early rumors said that gk104 could be the mid range card not the high end and the fact that gk104 is striped out of most GPGPU compute ( like all of their mid range cards) proves this; so its a mid range card and nvidia priced it 500$ like high end card and you say that "its perfect because its less then hd 7970" but gk104 should be priced around 300-400$ like a mid range card! ( nvidia steals because it can !). Now you can say "but kepler beats hd 7970", but lets think objective:
-in gaming gk104 have about 20 frames more than hd 7970 (generally speaking); if hd7970 have 60 frames gk104 have 80 and so on (I do not speak about games that have frames about 80 on both cards). And this is important hd 7970 have aroun 60 frames not 30 or bellow. If hd 7970 would have 30 and gk104 would have 60 then yes it would be a big difference, but since above 60 frames there is not much adding in gaming experience its no big deal. By the way, nobody did a quality test on both cards in games.
And there are some games that hd7970 wins :Aliens vs Predator, Metro 2033, crysis warhead.
-in idl gk104 has 32 C and hd 7970 34 C
- and something important, in full load gk104 consumes between 5-15 watts less then hd 7970 (depending on which site you look). Yes 5-15 watts difference. This mean that gk104 uses 235 W or hd7970 uses 210 W, you decide... Where is now the big difference 195 vs 250 W???? nobody talks about it!why?
-in GPGPU gk104 is beaten even by hd7870

"not only did NVIDIA steal the performance crown back from AMD but they also successfully reduced the power consumption " -really ? I think its overrated...

So for conclusion, its a mid range card tweaked to compete with hd7970 just in frames per second not in other aspects ( nobody mentioned any aspect beside fps in which nvidia is better than amd) with GPGPU much lowered and with a price of 500$ how somebody expects amd to drop price??? amd is bad for not lowering prices but nvidia is good for pricing a mid range card so high?

And yes I agree that prices must come down but from both companies because now amd has no real reason to lower their prices. If nvidia would have not been so greedy and would have priced their card correctly then amd would have been forced to drop their prices... But if someone says that amd is greedy for not lowering their prices must say that nvidia is also greedy ( not to say much greedy) for overpricing their card.

P.S. I would like to ask PCperspective to make a video quality test between these cards with vsync on and off (to see if fps above 60 adds to game experience) and of course rest of the settings set to high on a number of games ( metro 2033 as well :) ) and post the results . I would love to see such a comparison.

March 26, 2012 | 05:35 PM - Posted by Jeremy Hellstrom

I did not intend to state that I feel the pricing is good, if you have listened to me bitching about $500+ GPUs for the past several years on the Podcast you would know that. Thing is that I don't set prices, people with more dollars than sense go out and buy 3 of them and lo ... NVIDIA and AMD rejoice. So $500+ is the price that we need to deal with even though I personally would never spend that much on a GPU.

Think back to Fermi and the huge delta in power between it and Northern Islands ... that is why we comment on the power draw. Not just as a competition between AMD and NVIDIA but comparing NVIDIA to its previous cards.

I've seen articles stating that a 7870 can beat a 680 in GPGPU applications ... thing is that I haven't seen the benchmarks so I can't say for certain how true that is. Most PC Perspective readers however, do not care as much about GPGPU as they do about gaming, so yes FPS is a good benchmark ... The Tech Report has a different methodology and yes, the 7970 sometimes spends much less time in high lag situations but that could also be game or driver related .. we shall see over time.

As for VSYNC ... very hard to test at the moment since both companies are trying out their own proprietary solutions for tearing. Ryan and Josh are investigating them and we will hear more about it in the future.

Thanks for reading.

March 27, 2012 | 03:10 AM - Posted by Anonymous (not verified)

Nvidia's joke of adaptive VSYNC shows much tearing, and can't overclock much unless you physically modify your card (kingpin). Try viewing any overclocking forums and see the headaches that people are having with this self overclocking one trick pony. The 7970 is a sleeping giant that's easily overclocked, and still keeps up even under nvidia NDA reviews without doing so.

Regardless of tahiti's potential, their pricing structure has more to do with supply and demand, and less with how one particular person feels they should price their items in regards to competition. The 680 is nothing more than a 499 dollar promise without supply, and as more and more people are witnessing that nvidia pulled out every stop it could during review day, that promise is leaving a bitter taste in ones mouth.

Economics is not based solely on persons opinions, feelings, and rainbows. Just because one believes 500 is too much for a GPU doesn't mean someone else does, and in no way does it imply that they have less "sense". It's all comes down to supply and demand, to which the only statement of such in your article was a prelude to a comment about bad business practices if amd adheres to this basic principle. Stick to what you guys are good at, hardware reviews and news.

March 27, 2012 | 03:11 PM - Posted by Jeremy Hellstrom

Nice, just restate almost everything I said above.

March 27, 2012 | 04:54 PM - Posted by Anonymous (not verified)

Reread your own article.

Basing your projections on the competition from sold out hardware with questionable reviews (i say this not directed at the reviews of this site personally, but as to the nature of the hardware and it's effects on it) is silly.

Your speculation appears based on prices not making sense for you, but for others with no sense on the issue, as well as on the price of a product that seems to not have materialized for anyone trying to purchase it longer than 1 hour after it's release. Neither of which, in the end, are directly the deciding factor of a price of a limited product.

Your comment above mine was in regards to prices at present, my comment was in regards to the articles projection of the future, of which supply of tahiti was never mentioned, and demand was questioned based on a product not purchasable currently.

March 28, 2012 | 02:49 PM - Posted by Jeremy Hellstrom

So you are commenting on my comment, which reflects personal opinion as opposed to the actual new post which does not offer any speculation? In fact there is an actual quote stating that you shouldn't base projections on your competitors lack of stock in the news post. It is simply informing people of current pricing and the lack of any news about AMD changing their pricing ... and the implications any price change could have.

I stay neutral in the news story ... or at least I am pretty sure that I did. There is no projections on what AMD should do, only the probably consequences of a price change by AMD. However in the comments section, since I am making a comment, I express my personal opinion and speculate based on what I think is going to happen.

These are two completely different things. So if you are commenting on my comment, then I understand what your opinion is and why you disagree. If you are commenting on the news post then I am at a loss as to your disagreement, apart from the fact that you, personally, are unimpressed with the card.

March 27, 2012 | 08:53 AM - Posted by Oskars (not verified)

Give me a brake Jeremy, the statement that your webpages main market are Gamers is just silly.
I am a 3d visualiser and I'm in a constant need for GPGPU tasks, at the very least to check my lighting in a given 3D interior scene (raytracing).
Maybe the American continent is solely gamer oriented, but I live in Latvia (Europe), and I expect at least a partial productivity oriented view on things.

March 27, 2012 | 03:09 PM - Posted by Jeremy Hellstrom

I stand corrected ... and Canadian.

You've probably noticed that most of our testing here is done on games, which is where that statement comes from. While we do like to include as much GPGPU testing as we can squeeze in, that is mostly a future plan.

We don't want to exclude you nor downplay the importance of GPGPU but we don't have much in the way of testing processes for it at the moment.

March 28, 2012 | 07:22 PM - Posted by Anonymous Coward (not verified)

Anyone remember the old Mortal Kombat games?

In the year of Sandy Bridge & Bulldozer, Intel knocked AMD into the "finish him!" state. Employee numbers were decimated, CEOs were changed, board of directors and stock prices freaked out.

Graphics was all they had left. The got cocky, real cocky, with the prices of the 7000 series which was a slap in the face to all gamers. AMD has no brand premium to be able to charge such prices. On top of that, the 7000 series had dogshit performance for what is supposed to be both a MAJOR new architecture and a manufacturing node reduction.

Now Nvidia came out, and performed FATALITY! with the 600 series cards. AMD will lose market share like never before.

And I'm calling it now. AMD will be delisted from the stock exchange within 2 years. Everybody, remember the anon on PCPer that correctly called it! Heyo!

March 29, 2012 | 11:14 AM - Posted by andrei (not verified)

You are free to by nvidia kepler, you deserve it with all its "power and new architecture features" (read my first comment). But do not come back to amd when you won't be satisfied with Nvidia 600 series cards "FATALITY! performance".

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