Thursday, August 24th 2017

Retailers are Buying AMD RX Vega 64 at $675 Each

The Radeon RX Vega series launch has been particularly disappointing for gamers and PC enthusiasts because their otherwise interesting price-performance ratios at $499 for the RX Vega 64 and $399 for the RX Vega 56, were quickly stripped away by dwindling stock and sky-rocketing prices, with the RX Vega 64 even going above $1k in some places. We are not even sure if the miners are to blame or whether supplier-level pricing has been adjusted after the launch to a higher price point that makes AMD's promised pricing impossible to achieve.

It turns out that retailers might not be the ones making a quick buck at this madness. Leaked invoices show that distributors (entities that supply inventory to retailers) have inflated prices even at their level. A San Jose-based distributor, Ma Laboratories Inc., is quoting USD $675 per unit of a reference-design (not Limited Edition), Radeon RX Vega 64 SKU to a computer store. The $499 price AMD launched the RX Vega 64 at, is supposed to be the end-user price (minus government taxes). The retailer we're in touch with confirmed that they were offered no volume pricing discount due to low stock at the distributor itself. A distributor should ideally sell the product to a retailer at a much lesser price than $499, so the retailer can make their margin. The higher up the supply-chain, the more control AMD gets. The company is in a better position to rein in on distributors than retailers. If distributors are inflating prices with apparent impunity, it wouldn't surprise us if this goes even higher up.
Can AMD do anything about this? It can work with AIB partners to significantly increase production to bring down prices. But that would be a huge gamble, which will either work, putting cards in the hands of gamers at the prices they were promised; or won't, by creating more miners; or worse still, end up as bankruptcy-causing unsold inventories, if the mining craze were to somehow subside.

There is another option AMD can try, in our opinion. It can re-launch RX Vega 64 and RX Vega 56 as new SKUs which come with crippled cypto-currency mining abilities (a special BIOS or something driver-level, or even something at the silicon-level), and discontinue the RX Vega 56 and RX Vega 64. The new SKUs could be clearly advertised as not being meant for crypto-currency mining (so as to deter false-marketing lawsuits). This is important for AMD, because the Radeon brand is under threat.

The more overpriced Radeon cards end up in the hands of miners, the fewer cards end up in the hands of gamers at the prices AMD promised; and conversely the lesser game developers are inclined to optimize their games for AMD Radeon, because fewer gamers use Radeon. NVIDIA can accelerate brand Radeon's demise by doubling down on game developer relations and pushing the next-generation of Game Works.
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135 Comments on Retailers are Buying AMD RX Vega 64 at $675 Each

#1
RejZoR
They have a coprocessor on the Vega GPU. surely they can teach it to recognize cryptocurrency and just be absolute dud with it. Provide miner focused cards because I still see it as a viable income for AMD, just not the way things are right now. This is just unsustainable for their long term profit and for their entire graphics eco system.

I mean, they have to make a clear decision, are they going to supply their GRAPHICS cards to gamers to enjoy better GRAPHICS or they'll just release them for general compute aka cryptomining garbage? Because with price inflating, EVERYONE is getting rich, just not AMD. They still supply them at the designated initial price and then everyone sells it for 1/3 more. AMD doesn't get anything from it, they just get that tiny chunk and the rest is taken by retailers.

From what I've read, those actually running crypto farms don't even change graphic cards, they run them till they die. What really craps on supply of new cards are the opportunistic regular Joe's who see it as a quick buck for a month or two and then they sell it all. "Oh, the cards are good for mining, lets make some quick buck" and every such idiot grabs I don't know 10 cards. And you have bunch of these idiots who suck up the inventories dry. And then saturate second hand market, making new cards even harder to sell for AMD. In the end, everyone is making profit, except AMD.
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#2
ratirt
Well that's bad really bad for me. I still want to buy vega but as for now it's rather silly to even think about it. I hope this mining madness finishes and maybe AMD will make Vega mining crap. I sure hope so, The only thing is I wish making vega crap for mining wouldn't affect the game performance or professional apps performance. That would be a disaster even worse than mining I suppose.
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#3
AlphaPrime
Invoice doesn't show the supplier, their could be a third party distributor.
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#4
Xzibit
Some reseller only buys 2 Sapphires

Why not the PowerColor one as well and this was on launch date too.
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#5
punani
And one can only imagine the amount of RMA'd "mining cards" that have died from heat during warranty. This is sad for AMD indeed.
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#6
btarunr
Editor & Senior Moderator
Xzibit said:
Some reseller only buys 2 Sapphires.
That's a good enough stock for a small PC hardware store in Randomville Maryland or some place like that.
Posted on Reply
#7
Xzibit
btarunr said:
That's a good enough stock for a small PC hardware store in Randomville Maryland or some place like that.
The thing is we don't know. It could be someone with a re-sellers license who just bought 2.

There was no source for the photo posted.
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#8
W1zzard
Xzibit said:
The thing is we don't know. It could be someone with a re-sellers license who just bought 2.

There was no source for the photo posted.
It is a well-known store with physical and online presence
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#9
Xzibit
W1zzard said:
It is a well-known store with physical and online presence
Well if you look at the address.

They are shipping them to themselves. CA SJ corperate dis to NJ branch. Unless I'm reading the receipt wrong.

Then someone bought from the NJ branch and bought 2 Sapphires but there is no source as to who or for what?
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#10
papupepo
I hear that Samsung's HBM2 costs $250-300 so they can't sell it at $499. $599 is also impossible. They must sell it with some profitable articles in a tie-in sale, so they introduced that Radeon Pack.
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#11
evernessince
RejZoR said:
They have a coprocessor on the Vega GPU. surely they can teach it to recognize cryptocurrency and just be absolute dud with it. Provide miner focused cards because I still see it as a viable income for AMD, just not the way things are right now. This is just unsustainable for their long term profit and for their entire graphics eco system.

I mean, they have to make a clear decision, are they going to supply their GRAPHICS cards to gamers to enjoy better GRAPHICS or they'll just release them for general compute aka cryptomining garbage? Because with price inflating, EVERYONE is getting rich, just not AMD. They still supply them at the designated initial price and then everyone sells it for 1/3 more. AMD doesn't get anything from it, they just get that tiny chunk and the rest is taken by retailers.

From what I've read, those actually running crypto farms don't even change graphic cards, they run them till they die. What really craps on supply of new cards are the opportunistic regular Joe's who see it as a quick buck for a month or two and then they sell it all. "Oh, the cards are good for mining, lets make some quick buck" and every such idiot grabs I don't know 10 cards. And you have bunch of these idiots who suck up the inventories dry. And then saturate second hand market, making new cards even harder to sell for AMD. In the end, everyone is making profit, except AMD.
It's really not that simple. I highly doubt the video card is able to block cryto-currency mining on a hardware level. Maybe on a software level but it would be easy to avoid a driver update for miners. Just like with Bitcoin, the bubble will burst when someone makes a dedicated machine that mines coin far faster then GPUs.

Even if AMD could stop the mining, why would they? Nvidia has already announced it's ambitions for mining. Are you saying AMD should just give Nvidia free money?

AMD is still making money on the sale of graphics cards either way. The only difference is that miners don't contribute to the AMD brand and they don't represent a future sale. They will buy whatever works for them.

If you ask me, the one thing AMD should have done a long time ago is make operating the cards 24/7 void the warranty. It is easy to tell a card has been mined to death and the cost of replacements for miners is very costly for card partners. Consumer level cards were never designed to be run all day every day.
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#12
zmeul
AMD can go suck it
they made their own bed, now sleep in it! I won't shed any tears
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#13
Tsukiyomi91
to add more salt to the wounds, the Radeon Pack will no longer be available for gamers or consumers. So much for promoting FreeSync & RyZen systems with a compelling package when there's not enough supply to go around.
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#14
ratirt
Tsukiyomi91 said:
to add more salt to the wounds, the Radeon Pack will no longer be available for gamers or consumers. So much for promoting FreeSync & RyZen systems with a compelling package when there's not enough supply to go around.
For me it is still going or at least I hope it will be going. Although I will have to wait a bit longer for the purchase. I hope not too long though. Maybe AMD should get focus on a mining market separately. design cards only for mining. That I think would make sense and gaming market would get back to normal.
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#15
nemesis.ie
Disabling stuff on a card is just wrong IMO.

Some people want a flexible card that they can game/work/mine or whatever they want with it.
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#16
Ubersonic
There is another option AMD can try, in our opinion. It can re-launch RX Vega 64 and RX Vega 56 as new SKUs which come with crippled cypto-currency mining abilities (a special BIOS or something driver-level, or even something at the silicon-level), and discontinue the RX Vega 56 and RX Vega 64.
That's the dumbest idea I've heard this year lol.

Firstly, Vega 64/56 are already two of the worst cards going for mining performance compared to price and power consumption. Secondly, it's not miners buying them it's gamers and professional users. Thirdly, crippling the cards compute performance would make it useless for anything but games, so there go the professional sales that are currently keeping the ship afloat (and there's no guarantee that would drive those sales to the Vega FE and not the Titan).
Posted on Reply
#17
silentbogo
btarunr said:
There is another option AMD can try, in our opinion. It can re-launch RX Vega 64 and RX Vega 56 as new SKUs which come with crippled cypto-currency mining abilities (a special BIOS or something driver-level, or even something at the silicon-level), and discontinue the RX Vega 56 and RX Vega 64. The new SKUs could be clearly advertised as not being meant for crypto-currency mining (so as to deter false-marketing lawsuits). This is important for AMD, because the Radeon brand is under threat.
Here we go again. Blame everything on miners, regardless of whether it's based on facts or not.
I think my thoughts can be perfectly described by this quote from TweakTown:
Vega GPUs aren't being gobbled up by miners because the Ethereum mining performance is abysmal when you take into consideration the mammoth power consumption, heat output, and noise. Vega GPUs are being gobbled up by Hollywood, but the smoke and mirrors of blame are being used perfectly, where miners are getting all of the blame.

Read more: http://www.tweaktown.com/news/58843/hollywood-miners-gobbling-up-radeon-rx-vega-supply/index.html
The reason why Vega prices are so high and supply is so low, is all 100% AMDs own fault:
* They've delayed Vega "to ensure that the supply is there, and miners don't disrupt it"
* They've promised an MSRP of $399/$499, so that "it stays affordable for normal people"
* They failed to deliver the promised supply, which got the entire supply chain very nervous
* The supply chain bumped prices at every step along the way, because they know Vega supply is very short. They cannot commit to smaller margins at higher volume, because there is no volume!

In my country there are zero Vega cards in stores right now. Our largest online electronics retailer haven't even bothered to list Vega cards on their website, even though RX400/500 series and GTX10 series were listed ahead of time and were in stock at release date. That's the same greedy store, which was not afraid of selling a regular GTX1080 (not FE and not Ti) for over $1000 not too long ago.
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#18
Tsukiyomi91
maybe, but still not a viable way to make some profit in the long run if they keep running into stock shortages...
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#19
techy1
"interesting price-performance ratios at $499 for the RX Vega 64 and $399 for the RX Vega 56" - that is FALSE.
and also false is "399$" and "499$" - none of Vegas ever seen that price tag. so stop saying that Vega in ideal conditions is comeptitive or decent product...
RIP Vega for good. I hope Amd gets their $ from miners so they can invest in next gen and much more decent architecture.
Posted on Reply
#20
CandymanGR
It is ridiculus to even claim this is a typical invoice with retailer's price, including discount for reselling.
I just don't buy it. If this is the case, then nobody can make profit out of them, and there is no reason for a retailer to stock the card at the first place.
Posted on Reply
#21
R0H1T
CandymanGR said:
It is ridiculus to even claim this is a typical invoice with retailer's price, including discount for reselling.
I just don't buy it. If this is the case, then nobody can make profit out of them, and there is no reason for a retailer to stock the card at the first place.
Fake news? Looks like a single disgruntled retailer or reseller to me :rolleyes:
Posted on Reply
#22
Vayra86
Somehow I get the sense Vega news is getting the status of any Trump-related news article. You read it, you smirk or shrug for a second and move on.
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#23
Tsukiyomi91
now the most compelling GPUs for newbie builders & gamers are Nvidia since stocks for all the GTX 10 Series range are back to normal. Over here, stocks for them are in abundance whereas AMD ones are still severely limited to RX570 & RX580.
Posted on Reply
#24
R0H1T
Tsukiyomi91 said:
now the most compelling GPUs for newbie builders & gamers are Nvidia since stocks for all the GTX 10 Series range are back to normal. Over here, stocks for them are in abundance whereas AMD ones are still severely limited to RX570 & RX580.
Which is funny since they're probably being made at 3 places by GF, Samsung, TSMC(?) ~ http://www.tomshardware.com/news/amd-vega-package-problem,35281.html
Posted on Reply
#25
CandymanGR
R0H1T said:
Fake news? Looks like a single disgruntled retailer or reseller to me :rolleyes:
I don't know. It just doesn't feel right. What i am saying is this. If i was a retailer, and the distributor would tell me "you know mate, Vega 64 is 675$ per unit", i wouldn't buy them! It's pointless. Wouldn't you agree?
If a retailer buys them for 675$, the selling price including profit would be too high to be competitive.
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