Termie,
In theory what you are saying could have worked - launch earlier at amazing prices. Reality is it didn't work: HD5850/5870 series launched at $269/$369 and offered astonishingly good value, followed by HD5770 at $179 I believe. AMD launched HD5000 series 6 months before NV stepped food and GTX460 didn't even come out till summer of 2010, so far far behind HD5850.
This did not work. If you followed up on market share, NV ended up that 2 year generation (HD5800/6900) with 62-63% desktop discrete market share!! In other words, NV users could care less about price/performance of AMD cards. AMD tried for 3 full generations to offer price/performance and they are not switching, period.
So what you are saying that AMD should have captured more customers is not that simple. Let's say AMD could have sold 20 HD7950 cards at $299 (let's say AMD sells that chip to AIBs for $60 then). That's $1,200 in revenue for AMD.
Let's say AMD sells 10 HD7950 cards at $449 (let's say AMD sells that chip to AIBs for $120 now) = $1,200 in revenue.
This is an oversimplified example on my part but unless we have AMD's actual numbers, you cannot say it would have been better to continue using their price/performance strategy.
There are serious long-term consequences to have continued doing so:
1) AMD's GPU division lost $ in each of 4800/5800/6900 generations. So we know for sure that this strategy did not work;
2) AMD has
gained market share last quarter despite what you considered to be high prices. So we know that even at $130/$250/$350, HD7770/HD7850/7870 still sold well. You say HD7850 was a non-starter for $250, yes but only if you had an HD5850/6950. If you were a new customer, HD7850 was the best budget gaming card for 6 months. Nothing even came close, not 560Ti 448, not 570, not 580. It looks expensive because we got a bargain with 5850/6950.
3) Brand / market perception - Many people now consider AMD 2nd tier brand, and expect it to cost less than NV. This was not the case for ATI. There is long-term brand value erosion. You cannot be considered a premium brand and sell your products for 20-40% less ($299 4870, $269 4890, $269 5850), etc.
I am telling you right now, as much as I would love $299 HD8950 and $369 HD8970, unless GTX780 is 20-30% faster, we are not getting it. If you go back to ATI days, they priced their cards are $399, $499, $549 and $599.
Frankly, AMD responded by dropping prices on their cards and offering better price/performance for a while now, as was the case in the past. NV hasn't moved an inch on 670/680/690 pricing. Early adopters got top of the line performance 2-3 months before 680 launched so the early adopter premium is justified for them. Currently, NV isn't even on the map for price/performance. They are so far out of the map, they need $50 price drops everywhere and yet you aren't complaining about that. GTX660Ti for $300 is a joke, GTX680 for $500 is a joke. GTX670 is barely passable at $370-400, but only if you don't want to overclock a 7970. If you consider overclocking, 7970 wins without even trying.
The current price/performance puts AMD ahead at every price level:
http://www.computerbase.de/artikel/grafikkarten/2012/test-amd-radeon-hd-7950-mit-925-mhz/3/
What has NV done to change this since June?
Nothing, but you are not claiming they are ripping gamers off.....?
Once this generation passes, consumers will have to get used to $400-550 GPU prices, or that's what AMD's new management team is counting on. But this also means flawless execution of launching way ahead of NV and not falling too far in performance. We'll see how they do since GTX780 may be a beast
My gut feeling is next round AMD will be doing everything to maintain these launch prices:
HD8850 for $249
HD8870 for $349
HD8950 for $449
HD8970 for $549
This actually works well for NV since they moved up GTX460 768/1GB mid-range from $199/229 to $299 with GTX660Ti. Did you notice that? Yup, slowly but surely both companies are moving up the price brackets for videocards!
The old days of $270 AMD HDxx50 series card that could overclock to a $500 level of performance at launch are done. It's unsustainable. If you won't buy an AMD card at the same price as an NV card, well that's AMD's loss. However, they already took losing you into account when they shifted to the Predator/First mover advantage pricing model strategy.
Remember $600 8800GTX, $830 8800GTX Ultra, GTX280 for $649, GTX260 for $499? If you want the latest tech, you gotta pay. I don't like it. You don't like it. We both agree it's expensive to spend so much $ on console ports. Thing is, AMD has no other choice because for 3 generations in a row they lost $$.