- May 16, 2008
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Dear steve,
You're wrong. The high end gaming cards aren't where NV makes all of the money. They sell plenty of mainstream video cards that carry the company.
Love, the market
Did you mean, the marketer?
Dear steve,
You're wrong. The high end gaming cards aren't where NV makes all of the money. They sell plenty of mainstream video cards that carry the company.
Love, the market
Dear the market,
nVidia makes money on high end cards or they wouldn't sell them. We (enthusiasts) are the market for high end cards. If we will not bear their new prices, then the market will not bear them.
Love, Steve
That's my point, Nvidia choose Nvidia's pricing, not AMD. No conspiracy theories or failed logic required. I don't like the pricing of GTX780 and will vote with my wallet, but lets not pretend the pricing is fair.
Dear the market,
nVidia makes money on high end cards or they wouldn't sell them. We (enthusiasts) are the market for high end cards. If we will not bear their new prices, then the market will not bear them.
Love, Steve
Chances are, nvidia knows exactly what they're doing. They have a set number of chips that they want to sell and they can intentionally price it a bit higher, because the GK110 can also be used in the Titan (higher profit) or HPC (much higher profit.). Because of this, nvidia can sell the GTX 780 for a considerably higher price, yet, it doesn't matter because they have other options with the GK110.
Let's take a scenario. Let's say nvidia's cost with the GTX 780 is roughly, 350$. So for every card they sell, they make the difference in profit.
Scenario 1) Sell cards at 650$. They sell 10,000 cards at 300$ profit per sale. Total profit : $3000000
Scenario 2) Sell cards at 600$. They sell 15,000 cards at 250$ profit per sale. Total profit : $3750000
Scenario 3) Sell card sat 550$. They sell 20,000 cards at 200$ profit per sale. Total profit: $4000000
This is almost *exactly* how the market plays out. Once you lower the cost slightly, the buyer base increases exponentially. Just look at the poll below for proof of what people are willing to pay. But what is nvidia doing here? Let me explain:
So you make more profit by selling for less, because the number of buyers increases substantially. This is a very basic economic concept called profit maximization. But, let's get back to what's happening here. NVidia knows what they're doing. Consider this - they have strict supply quotas on chips they can devote to the GTX 780, because they can use the GK110 in multiple markets and cards. It just so happens, that the GK110 in the Titan and ESPECIALLY the quadro cards are substantially more profit. So nvidia has the flexibility to price the GTX 780 substantially higher than we all expected, because they can simply allocate these chips to HPC and the Titan. Both of which are higher profit.
So they make slightly less profit on the GTX 780 overall, but total profit will be higher because the GK110 chips unsold from the 780 are all going to the Titan and HPC markets. Higher profit overall. Hope this makes sense. Yes, it does suck for those with limited budgets, because they're priced out of the market. Yes, nvidia is pricing higher than they should, but what can you do. There are still folks who will buy it, just like folks who bought the Titan. In the end nvidia still makes money.
Dear Steve,
You just moved the goal posts from your OP.
Now you are agreeing with me about the market and high end video cards.
Love, a free market believer
Did you mean, the marketer?
Exactly. Besides my wife would seriously consider divorcing me over spending a grand on a video card. The thought of that conversation makes me shudder. Honey I just bought a $1000 video card...
Can we just stop with the silly Dear XXXX posts? Come on. I'm not directing this specifically to you, as many people have done the same - bit it is silly and childish. Can we talk like, normal people again? Thanks
Ha good one....me too scary stuff there...
So you make more profit by selling for less, because the number of buyers increases substantially. This is a very basic economic concept called profit maximization. But, let's get back to what's happening here. NVidia knows what they're doing.
Dear Steve,
You just moved the goal posts from your OP.
Now you are agreeing with me about the market and high end video cards.
Love, a free market believer
Let's not forget margins. NV reported gross margins of 54.3% last Q (AMD reported 41% up from 39%). On the other hand the 780 seems to be dangerously close to Titan so if they price it too low they can kill Titan and if they price it too high they'll loose larger sales. We'll see tomorrow the tru MSRP.
Oops, I offended an AMDefender so now I'm a member of the NV Focus Group.
How did I move the goal posts? You said the high end market isn't where nVidia makes all its money, implying they can do whatever they want with the price and still be profitable as a company.
Burger King could sell spaghetti and take a bath on it and still come out profitable. But they wouldn't make money on it, so why would they do it? Obviously nVidia cares about high end sales, which is my point. I believe in the free market too. You seem to be confusing "what people at nVidia think the market will bear" to "what the market will actually bear"
Fair? There's no such thing as a fair price in the open market of luxury goods. No one NEEDS a gaming card.
Fair? There's no such thing as a fair price in the open market of luxury goods. No one NEEDS a gaming card.
You know fine well I mean in the context of historical top end GPU pricing. I made that clear when I listed the recent few years top end GPU pricing trends.
Though dost defend premiums pretty strongly for a "random" "consumer". Nobodies obligated to anything that's true but hopefully people wise up to the gouging.
I'm not defending premiums at all. I'm defending the free market. Prices will rise or fall based upon the market for the video cards, nothing more or less. With that said I wish I could have purchased my Titans for less than a grand a piece, but alas the prices never budged so I had to pay the market price.
I'm a video card junkie (big time consumer) and I love me some top of the line cards. Kinda like how I paid $599 each for my 2x XFX DD 7970s on release day or how I paid the going rate for 2x GTX 580s on release day.......did the same for 2x 6970s, 2x 5870s, 2x GTX 480s, 4870x2, 9800GX2, etc. etc. etc.
BTW, you might want to look up gouging since I don't think you really know what it means.
Free market capitalism presumes competition. The closest this is to competition is a duopoly.