Increasing Sales Of Nvidia Graphics Cards To Affect Profitability Of Other Suppliers

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Long story short, graphics card companies are getting heat from Nvidia’s controversial Founders Edition, which is reportedly being pushed aggressively. It remains to be seen just how much of an effect these cards will have on the financials of Asus, Gigabyte, and other popular manufacturers, but what seems to be certain is that Nvidia sees no issue in competing with their own clients. Of course, this is not the first time Nvidia has attempted to look past its partners. Thanks to cageymaru for the link.

Efforts by Nvidia to push sales of its own-brand Founders Edition graphics cards are likely to affect the profitability of graphics card suppliers in Taiwan and China in 2017 and beyond, according to industry sources. While supplying GPUs to graphics card makers, including Taiwan-based Asustek Computer, Gigabyte Technology, Micro-Star International (MSI), Palit Microsystems, Hong Kong-based Zotac and China-based Colorful, Nvidia is also competing with these clients in the PC-use graphics card market, noted the sources.
 
It seems like with founders cards Nvidia is trying to create an Apple-like product line that rarely sees price fluctuations and discounts.

Also, I realize that Nvidia is selling these cards directly, but the AIB partners are selling these cards as well. The only cards the partners aren't selling is Titan X Pascal and the short-lived run of GTX 1060's. How much volume is Nvidia selling directly to consumers? Surely it's not THAT much.
 
When they released the FE, it was supposed to be MORE expensive, but a stable, solid, and unchanging card design for OEMs. You would pay for it, but you could get the same, unchanged design for the life of the card. Most people wouldn't buy it, but system vendors would, or people who were going to use custom coolers and such anyway.

All the AIB manufacturers were supposed to sell a cheaper basic card and then ramp up the price for their "gamer" versions with custom coolers and improved VRM components and such.

The plan didn't work out that way, Nvidia got pounded for "price gouging" when the AIBs all just stuck with the FE design at the higher price, and now the whole "FE" thing is a punchline.
 
Really hope that Vega is that good, so everyone can give nvidia the finger.
 
If they are selling the plain vanilla, non-OC'ed version of the card at much higher than MSRP and the partners can't compete with that, the partners must be doing something wrong.
 
As if AMD would act any differently in NVidia’s position..

PS, Vega won't be. Unfortunately.
Then when AMD start acting all monopolistic and shit, we just go back to nvidia and reset the cycle.
 
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I have yet to see ANY Pascal cards at their recommended MSRP selling point the NVIDIA originally claimed. AIB partners only made more expensive cards than the baseline MSRP model.

So who's to blame? The AIB for failing to release a MSRP that was claimed, or NVIDIA for making the low MSRP claim that wasn't real in the first place?

That said, if prices are about equal and the AIBs have better features, then the AIB would be the logical choice UNLESS the market was tight and NVIDIA FE was the only stock left.
 
I have yet to see ANY Pascal cards at their recommended MSRP selling point the NVIDIA originally claimed. AIB partners only made more expensive cards than the baseline MSRP model.

So who's to blame? The AIB for failing to release a MSRP that was claimed, or NVIDIA for making the low MSRP claim that wasn't real in the first place?

That said, if prices are about equal and the AIBs have better features, then the AIB would be the logical choice UNLESS the market was tight and NVIDIA FE was the only stock left.

Quick look on Newegg:
1060 GTX 6GB: 25 cards to choose from with 9 at or below launch MSRP and an additional 12 in the plus $20 range.
1070 GTX: 34 cards to choose from with 10 at price or below launch MSRP and an additional 12 in the plus $20 range.
1080 GTX: 35 cards to choose from with 7 at price or below launch MSRP and an additional 5 in the plus $20 range.

You can get Pascal cards at or below initial Nvidia MSRP easily now that demand has died down somewhat. Most of these cards are AIB partners. Things do narrow when you start looking at the high end however.
 
I wouldn't pay for the aesthetic and set it up to show it off perpendicular to the desk, but it doesn't seem like gouging to me. Cases can charge $30 more for their premium editions while plastic will work.
 
When they released the FE, it was supposed to be MORE expensive, but a stable, solid, and unchanging card design for OEMs. You would pay for it, but you could get the same, unchanged design for the life of the card. Most people wouldn't buy it, but system vendors would, or people who were going to use custom coolers and such anyway.

All the AIB manufacturers were supposed to sell a cheaper basic card and then ramp up the price for their "gamer" versions with custom coolers and improved VRM components and such.

The plan didn't work out that way, Nvidia got pounded for "price gouging" when the AIBs all just stuck with the FE design at the higher price, and now the whole "FE" thing is a punchline.

The problem is the FE cards were more expensive and readily available, so Nvidia ends up making most of the money on those.
 
My first thought when Nvidia first started pushing the 'Founder's Edition" cards was "Isn't this what killed 3DFX?"

it's a completely different market today though, and rather than buying a board house like 3DFX did with STB, they appear to be using contract manufacturers, - at least at first - which is probably a wise choice.

I can't imagine their traditional board partners are happy with them though.
 
The problem is the FE cards were more expensive and readily available, so Nvidia ends up making most of the money on those.

Yeah, that and - at least at launch - Nvidia seemed to be binning the best chips for themselves, so while the Founders Edition coolers were worse than the board partners custom ones, they were still running rather cool, and overclocking the best.
 
Quick look on Newegg:
1060 GTX 6GB: 25 cards to choose from with 9 at or below launch MSRP and an additional 12 in the plus $20 range.
1070 GTX: 34 cards to choose from with 10 at price or below launch MSRP and an additional 12 in the plus $20 range.
1080 GTX: 35 cards to choose from with 7 at price or below launch MSRP and an additional 5 in the plus $20 range.

You can get Pascal cards at or below initial Nvidia MSRP easily now that demand has died down somewhat. Most of these cards are AIB partners. Things do narrow when you start looking at the high end however.

I haven't checked the prices in a while. But I'm glad to see prices FINALLY coming down. (Thanks for the update) The 1060 was no surprise because it had direct competition.

Speculation: I wonder if prices are coming down now that nvidia knows VEGA is in the pipe? (Sell them while you can philosophy before real price cuts are forced due to competition.)
 
I have yet to see ANY Pascal cards at their recommended MSRP selling point the NVIDIA originally claimed. AIB partners only made more expensive cards than the baseline MSRP model.

So who's to blame? The AIB for failing to release a MSRP that was claimed, or NVIDIA for making the low MSRP claim that wasn't real in the first place?

That said, if prices are about equal and the AIBs have better features, then the AIB would be the logical choice UNLESS the market was tight and NVIDIA FE was the only stock left.

You don't look often, do you?
 
You don't look often, do you?
Admittingly no. I think the last time was like six months ago when I built my nephew his first gaming rig. But I knew the prices were inflated for a LONG time.
 
Wait I'm confused.... Who the hell is still buying a FE? I bought and EVGA FE back in June for 2 reasons - I watercool so FE is always going to be available as the "stock" PCB while tons of other partners are coming out with stupidly huge custom PCB's which are both pointless and limit your waterblock choice.... and the fact that it was simply in stock at a time when anything else sold out in a nanosecond. Now though, are people really preferentially buying an overpriced card direct from NV rather than one of the myriad options from partners being sold on Amazon or NE? Something just doesn't really add up about that, and looking at this article with no cited sources and no numbers I find it hard to believe this is even a real issue.
 
A lot of small form factor cases benefit from having the waste heat exhausted out of the case by the card as opposed to exhausting into the case where there's less than ideal airflow, could the uptick in SFF builds be contributing to more blower cards being sold?
 
I haven't checked the prices in a while. But I'm glad to see prices FINALLY coming down. (Thanks for the update) The 1060 was no surprise because it had direct competition.

Speculation: I wonder if prices are coming down now that nvidia knows VEGA is in the pipe? (Sell them while you can philosophy before real price cuts are forced due to competition.)

They haven't come down that much. They fluctuate quite often and I know this because I check them, not randomly check on the site and just post like someone else did above. I bought my MSi Gaming X 1070 back on Halloween for $385 with a rebate and that same card the other day was $425 with a $15 rebate. Terrible deal but the price jumps around so much that if you're patient and you're eyeing something specific, you might be able to get 50-70 bucks off the price. I'm not sure why anyone would buy that Founder's Edition card just to rip the cooler off and pay 70-80 bucks more for that along with another 50-100 for another cooler.
 
The problem is the FE cards were more expensive and readily available, so Nvidia ends up making most of the money on those.

I'm not convinced Nvidia PLANNED this though, I think that's just how it worked out. The AIBs took their time on getting cards out, and they kept their prices high due to the high demand, so it kinda ruined the original intent of the FE. I blame that on the board vendors and the market though, not Nvidia. Which is why I don't agree when people blame Nvidia greed for the FE stuff...that's not why they released it. They kept prices high to push people AWAY and into the arms of the AIB vendors. The AIB vendors just kept their prices just as high. If anyone was being greedy, it was them, not Nvidia.
 
This seems familiar.... like 3DFX buying STB so they could make their own cards and to hell with the OEMs. Sounds like a great idea, except it was a terrible idea. Competition, manufacturing problems, etc.

But Nvidia can pull this off because they control 70%+ of the GPU market.

I miss 3DFX. But stupid management is as stupid management does.

On that note, ARS has a nice new article about the Amiga and how 1 guy, Mehdi Ali, drove Commodore and the Amiga into the dirt.

https://arstechnica.com/the-multive...-the-amiga-part-10-the-downfall-of-commodore/

I'm on Team Green, so I get it... I just wish another player would enter the game and shake things up. Doesn't seem like it's even possible now.
 
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My first thought when Nvidia first started pushing the 'Founder's Edition" cards was "Isn't this what killed 3DFX?"

it's a completely different market today though, and rather than buying a board house like 3DFX did with STB, they appear to be using contract manufacturers, - at least at first - which is probably a wise choice.

I can't imagine their traditional board partners are happy with them though.

What killed 3DFX was their chips post Voodoo 2 was late to the party and under-performed. It relied on multi-chip approaches which lowered their margins and ate more power for worse performance.

When NV is in a dominant position, they can sell their own stuff just fine. Apple doesn't need to have AIBs to sell their stuff, why should NV right? They keep it in-house, higher profit margins for them when the middleman "AIBs" are removed.

In the future, why should NV even have 3rd party GPUs?

They can simply design a good reference card, and make another design for an open air cooled OC edition and sell both directly. What's the downside to this? I honestly can't see any if NV can get their logistics right (like Apple).
 
I mean it's quite obvious here:

"Excluding Nvidia, the sum of profits earned by the world's top-six graphics card suppliers totaled about NT$5 billion (US$159.49 million) in 2016, encouraging Nvidia to step into the segment to slice part of the growing earnings, said the sources."

So the AIBs are currently making nice profit, profit that NV could be enjoying instead. Why should NV let these guys take the profits instead? :/
 
Hmm doesn't Google do this with it's Google Pixel phones now?

kinda. i think the key difference is google recognized users got tired off all the carriers taking their love child and turning it into a Frankenstein monster with all they crap they added to it adn thus the pixel.
 
FE really kept AIB version prices lower than usual.
Very few exceed the price of the FE version. No crazy KINGP|N versions etc.

FE sort of set a cap for what users are willing to pay for the highest version of the chip.
I haven't seen any Classified GTX 1080's from anyone, compared to last gen many people had the top tier AIB card.

Why buy an large, overly engineered Classified, AMP, HOF, KINGP|N etc when the FE will match or outperform them.
 
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The FE edition and its price was a direct present to AIBs and they loved it. Imagine a FE at 599...

AMD does the same btw. And this is nothing new, been so for ages.

The real issue is that graphics sales are slowing down fast again after 2 greats quarters and inventories building up for AIBs resulting in price cuts.
 
Founders Edition was just a method for Nvidia to capitalize on the initial rush of sales of their new card. Remember that no AIB cards were immediately available, only FE. So if you wanted to get a card within the first month after its launch (which obviously many did), you had no choice but to purchase a Founder Edition directly from Nvidia at their inflated, above MSRP pricing.
 
FE really kept AIB version prices lower than usual.
Very few exceed the price of the FE version. No crazy KINGP|N versions etc.

FE sort of set a cap for what users are willing to pay for the highest version of the chip.
I haven't seen any Classified GTX 1080's from anyone, compared to last gen many people had the top tier AIB card.

Why buy an large, overly engineered Classified, AMP, HOF, KINGP|N etc when the FE will match or outperform them.

Your last statement is correct, but your thought process is a non-sequitur. Prices did go above the FE ceiling , custom cooled models were charging a premium. The real reason we don't see those "K|NGP|N" type cards is that FE chips didn't do any worse than custom PCB's despite "inferior" power delivery systems. The reference design was good enough to hit the limits of the chip. You could buy parts with that design for the non-FE MSRP ($599), so why pay a huge premium for some stupid version that isn't going to give you anything extra? It really has nothing to do with FE creating a ceiling, more that the chips all do 2-2.1ghz regardless of power delivery as long as the cooling is halfway decent, so noise and cooling are the only things you should really bother paying for. The only way AIB's could justify a super high-end version like that now would be to aggressively bin off golden samples that somehow did substantially better than normal, but those could be total unicorns and/or not worth the effort.

The FE edition and its price was a direct present to AIBs and they loved it. Imagine a FE at 599...
Yup, $699 became the de-facto MSRP for anything that didn't have a blower cooler. All the custom cards could charge a premium to $699 rather than the $599 without the FE... So I still don't think this article makes any sense.

Founders Edition was just a method for Nvidia to capitalize on the initial rush of sales of their new card. Remember that no AIB cards were immediately available, only FE. So if you wanted to get a card within the first month after its launch (which obviously many did), you had no choice but to purchase a Founder Edition directly from Nvidia at their inflated, above MSRP pricing.
Thats not exactly true, "Founders Edition" cards were available from partners at third party retailers shortly after launch. I have an EVGA Founder's Edition that I bought at Newegg. Not sure how the pricing model works for the partners in that case, but they *were* selling FE's under their own brand.
 
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Your last statement is correct, but your thought process is a non-sequitur. Prices did go above the FE ceiling , custom cooled models were charging a premium. The real reason we don't see those "K|NGP|N" type cards is that FE chips didn't do any worse than custom PCB's despite "inferior" power delivery systems. The reference design was good enough to hit the limits of the chip. You could buy parts with that design for the non-FE MSRP ($599), so why pay a huge premium for some stupid version that isn't going to give you anything extra? It really has nothing to do with FE creating a ceiling, more that the chips all do 2-2.1ghz regardless of power delivery as long as the cooling is halfway decent, so noise and cooling are the only things you should really bother paying for. The only way AIB's could justify a super high-end version like that now would be to aggressively bin off golden samples that somehow did substantially better than normal, but those could be total unicorns and/or not worth the effort.

What if FE moving forward are engineered to the chips' maximum potential, artificially limiting AIB model versions gaining performance over FE cards?
 
What if FE moving forward are engineered to the chips' maximum potential, artificially limiting AIB model versions gaining performance over FE cards?
Doesn't really compute again though.... How is that limiting the AIB models? The FE board is engineered to deliver everything the silicon can handle. The proof is in the overclocks. If it was under-engineered then AIB's would have more headroom, but NV didn't leave any headroom on the table with the FE. That does limit the abilities of the AIB's to do anything more, but its not "artificial". If the FE cards could only do 1800mhz because of shitty power delivery all the AIB boards would hit the same 2100mhz wall the FE does now. GP104 is pretty consistent in terms of clock overhead, which means AIB's don't have much to differentiate from any of their competition, but thats a fact of this chip. It has nothing to do with the FE, which BTW is *more expensive* with mediocre cooling (i.e. a bad value which would logically drive buyers *towards* AIB cards, not away from them)
 
What killed 3DFX was their chips post Voodoo 2 was late to the party and under-performed. It relied on multi-chip approaches which lowered their margins and ate more power for worse performance.

When NV is in a dominant position, they can sell their own stuff just fine. Apple doesn't need to have AIBs to sell their stuff, why should NV right? They keep it in-house, higher profit margins for them when the middleman "AIBs" are removed.

In the future, why should NV even have 3rd party GPUs?

They can simply design a good reference card, and make another design for an open air cooled OC edition and sell both directly. What's the downside to this? I honestly can't see any if NV can get their logistics right (like Apple).

A big difference is that enthusiast gamers who buy GPUs are not Mactards. Many of them do know a lot about what they are buying and many of them have desires for specialized or unique parts. Just like Apple if nVidia was to go exclusive, they would probably have a very diminished choice of products. For mainstream products like ultrabooks for clueless soccer moms having very few choices is a good thing. Keeps profits insanely high. For ultra high-end GPUs I think AMD would see massive gains if nVidia did this. Let's say you want a GPU to match the colors of your motherboard, or you need a compact GPU, or fanless? There are a lot of places partners can go to differentiate. I admit to buying parts for my computers from brands I would normally have not considered simply for a color preference. I see many things in the past were done by partners and I can't see nVidia offering this on their own. If they could beat AMD for sure most of the time they might be able to pull it off. But its a rather large risk to take especially given they are doing very well with their current business model.
 
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