When it comes to the highest-end computer graphics hardware (both in terms of the video game industry as well as the GPU computation industry) Nvidia has enjoyed a pretty much de facto monopoly status for several years now. Their biggest and closest competitor, AMD, has been very fierce on the low and mid range tiers, both in price and quality, but when it comes to the top tier, Nvidia has been pretty much unchallenged, having all the top positions year after year. For many years AMD hasn't even tried to compete on these top positions, and concentrated mostly on the low and mid-end tiers.
In theory, having a monopoly status in some industry is the absolute ideal for a corporation: Nobody is competing with you on that field, and therefore you can pretty much do whatever you want, if what you are producing has high demand. You aren't really competing in terms of price with anybody, and therefore you can make your products pretty much as expensive as you want. The only limiting factor is how much people are willing and able to pay for the products, so the only thing you have to worry about is finding that sweet spot that maximizes profit.
It appears that Nvidia got quite full of themselves with their latest generation of graphics cards, ie. the RTX 20 series. For example, the top card of their previous generation, the GTX 1080 Ti, had a launch MSRP of US$699. Their equivalent top card of this new generation, the RTX 2080 Ti, had a launch MSRP of US$1199, which is rather exorbitant. The GTX 1080 had a launch MSPR of US$499, while the RTX 2080 had a launch MSRP of US$699.
Apparently they thought they could sell their new cards at whatever prices they wanted. But what happened? Let's look at their NASDAQ stock market value during the last 2 years:
What happened in September of 2018? Well, the RTX cards started shipping on September 20'th. Coincidence?
It's interesting to compare this to the stock market value of AMD in the same time period:
There's also a notable dip in September of 2018, no doubt caused at least partially by the launch of the Nvidia RTX cards (the stock market can be finicky that way). However, note how fast AMD recuperated from that dip afterwards. In contrast, Nvidia has been in that slump ever since. AMD is, in fact, doing better than ever, after that small hiccup. And even though they still have no products in direct competition with the RTX cards.
In theory, having a monopoly status in some industry is the absolute ideal for a corporation: Nobody is competing with you on that field, and therefore you can pretty much do whatever you want, if what you are producing has high demand. You aren't really competing in terms of price with anybody, and therefore you can make your products pretty much as expensive as you want. The only limiting factor is how much people are willing and able to pay for the products, so the only thing you have to worry about is finding that sweet spot that maximizes profit.
It appears that Nvidia got quite full of themselves with their latest generation of graphics cards, ie. the RTX 20 series. For example, the top card of their previous generation, the GTX 1080 Ti, had a launch MSRP of US$699. Their equivalent top card of this new generation, the RTX 2080 Ti, had a launch MSRP of US$1199, which is rather exorbitant. The GTX 1080 had a launch MSPR of US$499, while the RTX 2080 had a launch MSRP of US$699.
Apparently they thought they could sell their new cards at whatever prices they wanted. But what happened? Let's look at their NASDAQ stock market value during the last 2 years:
What happened in September of 2018? Well, the RTX cards started shipping on September 20'th. Coincidence?
It's interesting to compare this to the stock market value of AMD in the same time period:
There's also a notable dip in September of 2018, no doubt caused at least partially by the launch of the Nvidia RTX cards (the stock market can be finicky that way). However, note how fast AMD recuperated from that dip afterwards. In contrast, Nvidia has been in that slump ever since. AMD is, in fact, doing better than ever, after that small hiccup. And even though they still have no products in direct competition with the RTX cards.
Comments
Post a Comment