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  • SharkyForums.Com - Print: Who's to blame for current videocard prices? Chipmakers or the consumer?

    Who's to blame for current videocard prices? Chipmakers or the consumer?
    By MicroDot September 24, 2000, 01:40 PM

    Well I guess that everybody agrees that current prices for videocards are "a little" exaggerated, no?
    Last year I bought myself a TNT2-ultra for $200 with my hard earned money. I was upgrading from a TNT.
    I already found at that time that it was pretty expensive for a videocard.

    I think that on one side we can blame the 3d gaming revolution for this.
    When 3Dfx came out with their Voodoo everybody had to buy an extra card to play 3d games, so adding an extra cost to the system.
    It continued with the Voodoo2.

    But then came Nvidia who "came to the rescue".
    They gave us their TNT, a very good performer in 2d & 3d. It costed only $150. The best thing was that we didn't had to buy an extra card so this time reducing the cost!
    But now that Nvidia hasn't had real competition, they could set their prices and so videocards prices were going up again. A top of the line videocard now costs about $350/400! That's about 2x the price in comparison with last year!!!

    Nvidia want to stay in front of the competition by bringing out a new product each 6 months. This is one reason that they can't bring down their prices fast enough or don't want to.
    They can do this because they have the fastest cards available at the moment.
    Maybe it was Nvidia's plan all the way long.
    Giving us a fast & cheap performer so it would get the consumer's attention. Releasing faster products each 6 months and by the time the gap in performence becomes pretty wide upping the price more & more.

    I also really think nvidia doesn't want to dominate the videocard market only.
    The image that I have of nvidia is almost the same as Intel, Microsoft & Rambus. Dominate!
    Other companies that doesn't give me such an imression are AMD, ATI. They mostly only focus on what they are good at and only want to do what is best for us consumers.
    Maybe that's a reason why ATI exists so long.
    Where are S3, Cirrus Logic, N9? DEAD.
    But I also would like to see if in a distant future AMD becomes the N1 chipmaker they would still have that same image.

    Thankfully ATI gave us their Radeon which I see as the Athlon of the videocards. The first real competition to Nvidia! Hopefully it will stay so and 3dfx will bring out their Rampage giving even more competition to Nvidia & prices will drop to prices that are a bit more reasonable.

    In the end it's all about competition...

    By Arcadian September 24, 2000, 01:50 PM

    Maybe a 4 month turnaround time doesn't seem like much to you, but it sure has taken the industry by storm. No company has every been able to turn out new products every 4 months, which is the rate that nVidia is going.

    In order to keep some distance between their newest cards, and those they released 12 months ago, there has to be a large price delta. They are only turning out faster chips because consumers demand it. Consumer demand is driving the video market to produce faster products at an alarming rate, and companies like nVidia don't have the cash reserves that companies like ATI have.

    So, in order to stay competative and keep ahead with R&D, they are forced to charge highly for their top of the line cards. It's pretty simple if you understand economics... if people all of a sudden stop demanding the highest segment of video cards, two things will happen. First, companies like nVidia will have to drop prices to compensate, and, as a direct result, innovation will fall on the hands of companies with the largest amount of capital. Namely, ATI.

    By Arcadian September 24, 2000, 02:02 PM

    One other thing. In a sense, nVidia IS the AMD of the video world. They have faster products, yet they have less capital to back up those products if a shortfall in demand occurs. ATI is like Intel. It used to rule the 2D market, but since 3D has become popular, it has had to play "catch up" for the past couple of years. This is sort of like the Pentium III consistantly trying to catch up to Athlon in terms of performance.

    Now that ATI has just about caught up, it can easily destroy nVidia. All it has to do is lower prices, which it can afford to do, since ATI is a wealthy company. Likewise, Intel can easily drop prices on Pentium IIIs, and make them more compelling to the vast majority of PC buyers that know only the Intel name. AMD can't drop prices much lower than they are, and so they would suffer much more than Intel.

    nVidia can probably afford to drop it's prices on its video cards, but that would only be for the short term. In the long term, they would not have the capital to go up against ATI. In a further extreme, if nVidia wsa forced to cut prices all the way down to sub $200 even for their high end, they would have serious short term effects as well. ATI would take advantage of this (because they can afford it), and would dominate in nVidia's absence.

    Just a little lesson in economics for you . I'm not saying this would happen, because maybe it's not in ATI's interests to destroy a competitor just yet (the same way Intel can't afford to destory AMD... the short term effects aren't worth getting them in the long run). However, if demand were to change, it would be outside of ATI's or Intel's hands. They would need to cut prices, and the companies that would suffer the most are the nVidias and AMDs.

    By MicroDot September 24, 2000, 03:23 PM

    quote: Arcadian
    "...nVidia IS the AMD of the video world."

    Nvidia was almost there at the beginning of the 3d gaming revolution so it has a good name and doesn't had to rebuild a bad name unlike AMD.
    Nvidia may have less capital but they sure are the best known 3dchipmaker amongst consumers. 3Dfx were, but people have realised that there were other 3d cards than Voodoo.
    I also think that for the time that nvidia exists it had a good name in a short period unlike AMD that exists more than 30 years! They even made a deal with Microsoft for the X-Box. 500 million dollars ain't so bad!
    If Nvidia continues at this rate they will have enough capital to be even bigger than ATI in no time.
    Nvidia should buy a board manufacturer, they have a good name now with their geforce-line & are the fastest unlike 3Dfx.
    3Dfx went too quick building their own boards.
    They didn't had enough capital like you say to invest in R&D and now they're lagging behind Nvidia in terms of performance.

    I am also willing to bet that nvidia will keep the geforce name for their next card.
    So the NV20 would be called Geforce3 or something eventhough it's something totally different.

    By Dan1 September 24, 2000, 05:29 PM

    quote:Originally posted by MicroDot:
    Nvidia should buy a board manufacturer, they have a good name now with their geforce-line & are the fastest unlike 3Dfx.
    3Dfx went too quick building their own boards.[/b]

    You are wrong, just plain wrong, NVidia should not buy a board manufacturer, look at what it did to 3Dfx when they bought STB, they went down the ol' crapper. Part of NVidia's success is that their products are competing against each other, not even against other brands. Joe Shmoe walks into Best Buy and sees Asus, hmm expensive but more features then sees Annihilator ooh cool name AND cheaper, then goes by Hercules Prophet II another cool name and more features, he doesn't even look at the ATI chemistry class card (raedon) he just says Hmm, hercules sounds best and has features, I want that one. And then he buys it. If NVidia were to make their own boards joe would see Geforce (physics class) and raedon (chem class) he'd get scared and run to the matrox G400 it sounds like his favorite sony monitor and choose that even tho it sucks.

    NVidia uses it's manufacturers to make sure it's the only board ppl see, there are like 4 GF2 boards on the shelves for every raedon/V5/Gxxx This give them a marketing edge. Giving up that edge would be plain stupid.

    My rant for the day has ended, you may go back to reading mere mortal's post's now.

    By Arcadian September 24, 2000, 06:25 PM

    Dan1, I know you probably didn't mean it, but you included in your message that you were quoting from me. I didn't say what you are arguing against, so you might want to watch what goes into your quote brackets next time. Thanks .

    By MicroDot September 24, 2000, 07:00 PM

    Hehe.
    He just copied and pasted what I typed.
    He better reads what he posts.

    By Dan1 September 24, 2000, 09:16 PM

    Editted and fixed I hope. Sorry I was just deleting stuff in the quotes, thought I had gotten everything but the line about NVidia becoming a board manufacturer too, still getting used to this forum.

    By Vilunki September 25, 2000, 07:16 AM

    Memory price. Lotsa fast ram = lotsa bucks. GeForce 2 Ultra has 64 megabytes of 230mhz DDR ram = 460 mhz effectively. Minimum starting retail price = 0.5$ * memory speed * amount(1 for 32, 2 for 64) + chip price($40 for GF2GTS/Ultra?).
    Though MX and GF SDR are a whole different lot. Adjust to suit your greed.
    Note, chip prices are very wild guesses
    Prices:
    GF SDR = 83+50 = 133$
    GF DDR = 150+50 = 200$(ok, this isn't very accurate, DDR ram isn't 2x in cost, but it feels nice)
    GF MX = 83+30(guessing) = 113$
    GF2 GTS 32mb = 166 + 40 = 206,5$(as if!)
    GF2 GTS 64mb = 333 + 40 = 373$(another miss)
    GF2 Ultra 64 mb = 460 + 40 = 500$

    By Rick_James9 September 25, 2000, 10:05 AM

    quote:Originally posted by Dan1:
    You are wrong, just plain wrong, NVidia should not buy a board manufacturer, look at what it did to 3Dfx when they bought STB, they went down the ol' crapper. Part of NVidia's success is that their products are competing against each other, not even against other brands. Joe Shmoe walks into Best Buy and sees Asus, hmm expensive but more features then sees Annihilator ooh cool name AND cheaper, then goes by Hercules Prophet II another cool name and more features, he doesn't even look at the ATI chemistry class card (raedon) he just says Hmm, hercules sounds best and has features, I want that one. And then he buys it. If NVidia were to make their own boards joe would see Geforce (physics class) and raedon (chem class) he'd get scared and run to the matrox G400 it sounds like his favorite sony monitor and choose that even tho it sucks.

    NVidia uses it's manufacturers to make sure it's the only board ppl see, there are like 4 GF2 boards on the shelves for every raedon/V5/Gxxx This give them a marketing edge. Giving up that edge would be plain stupid.

    My rant for the day has ended, you may go back to reading mere mortal's post's now.

    Dan1 you understand the "mind games" nVidia plays on the techno-blind of the world. Nvidia's marketing is excellent because most people don't invetstigate products before they buy them at Bestbuy or CompUSA. That's what the sales people are for right? The product name is more important than the actual product. You must understand us geeks can't sell anything! Because we are too busy explaining technology in ways people can't understand. Today, video cards are sold like cars. I wonder if Nvidia will come out with "Viper GTS 2/BADASS MOFO" card or "WWF Geforce3 Series (as seen on TV)". Remember all the Diamond Stealth/Viper cards? Hey, I like the names too

    By Adisharr September 25, 2000, 04:25 PM

    One other important thing to consider is the SIZE of the chips on these cards. It is very hard to design such large chips let alone actually producing a quantity at workable speeds. These guys aren't selling nearly as many cards as Intel and AMD are selling cpu's. Look at nvidia's upcoming one - how many transistors? Holy moly..

    $ .02


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