Wednesday, June 20th 2018

Graphics Card Shipments Fall On Weak Mining Demand in 2H18; Prices to Remain Hiked

According to DigiTimes, the entire AIB partner and graphics card supply channel is gearing up to an expected demand decrease for graphics cards in the second half of 2018. This marks an expectation on the continuation of the downward trend since December 2017, a time where Bitcoin (and as such, alternate cryptocurrencies) were at all-time highs. As profits decrease, difficulty increases, and mining players offload their graphics cards to still-interested buyers of their hardware, the market's ability to trade existing graphics cards and absorb new inventory is dwindling. Naturally, this reduced demand means that prices for new graphics cards have also been decreasing and somewhat stabilizing towards pre-mining boom prices.

However, producers of graphics cards obviously don't want to give away their record-high profits in their entirety; and they're showing some reluctance, some "pricing memory" on their graphics cards, maintaining gross margins in the 20% area, double that of pre-mining pricing. As such, graphics card makers are again abandoning the mining boom as a source of stable revenue, looking to other solutions (such as servers, datacenter acceleration and such, DigiTimes reports in the case of TUL). Another thing that would certainly help graphics card manufacturers in keeping up high demand and profits, of course, would be the impending release of a new NVIDIA architecture... At least for those that have AIB status with the company.
Source: DigiTimes
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67 Comments on Graphics Card Shipments Fall On Weak Mining Demand in 2H18; Prices to Remain Hiked

#1
dj-electric
Currently, even if they want - AIBs can't return to lowest prices without making much less to non profit.
Simply because GDDR prices pretty much doubled for OEMs. If a GTX 1060 6GB that was sold for 250$ to make the same profit, it would be sold for 270$.
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#2
kastriot
Well they earned lot of money last year so..
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#3
Raevenlord
News Editor
"dj-electric said:
Currently, even if they want - AIBs can't return to lowest prices without making much less to non profit.
Simply because GDDR prices pretty much doubled for OEMs. If a GTX 1060 6GB that was sold for 250$ to make the same profit, it would be sold for 270$.
If they had kept their margins at 8-10% like before the price hikes, sure. But the pricing increase comes with a doubling of that margin, so they could lower the prices while keeping the same profit ratio. They just choose not to, because hey, we're making so much money, let's keep it that way.
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#4
Nephilim666
It may take a while but eventually the market will correct. People won't pay what they're asking and the demand won't be there to outstrip supply. Eventually desperation will replace greed.
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#5
xkm1948
Well they can keep their GPU then. Not in a hurry to upgrade anyway
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#6
TheMailMan78
Big Member
Hello console market. Another nail in the PC coffin.
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#7
Mindweaver
Moderato®™
"dj-electric said:
Currently, even if they want - AIBs can't return to lowest prices without making much less to non profit.
Simply because GDDR prices pretty much doubled for OEMs. If a GTX 1060 6GB that was sold for 250$ to make the same profit, it would be sold for 270$.
I'm sure they made more than enough profit when they were selling them 3x their MSRP. Plus, I haven't seen a 1060 6gb card for $270. Cheapest I've seen is $309.99 which in my opinion is still way overpriced. I would be hard-pressed to pay $270 for such an outdated card.

"Console"
Are you back?
"Mindweaver Wick"
People keep asking if I'm back and I haven't really had an answer. But now, yeah, I'm thinkin' I'm back.
Posted on Reply
#8
dj-electric
"Mindweaver said:
I'm sure they made more than enough profit when they were selling them 3x their MSRP. Plus, I haven't seen a 1060 6gb card for $270. Cheapest I've seen is $309.99 which in my opinion is still way overpriced. I would be hard-pressed to pay $270 for such an outdated card.
Psst.

https://www.amazon.com/EVGA-GeForce-GAMING-Support-06G-P4-6161-KR/dp/B01IPVSGEC/ref=sr_1_1?s=pc&ie=UTF8&qid=1529498917&sr=1-1&keywords=GTX+1060+6GB&refinements=p_n_feature_four_browse-bin%3A6066317011
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#9
ppn
the unrealistic prices are yet to fall on their face.
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#11
TheMailMan78
Big Member
"Mindweaver said:
I'm sure they made more than enough profit when they were selling them 3x their MSRP. Plus, I haven't seen a 1060 6gb card for $270. Cheapest I've seen is $309.99 which in my opinion is still way overpriced. I would be hard-pressed to pay $270 for such an outdated card.
Thats not how economics or capitalism works. Its about charging whatever the market will pay. Just because you made a higher margin last week doesnt mean out of the good of your heart you make less the next week because.....why exactly? Yeah these are GPU's not insulin. If the market will pay six times what a product is worth. Its worth that six times. Example: cars.
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#14
Mindweaver
Moderato®™
"TheMailMan78 said:
Thats not how economics or capitalism works. Its about charging whatever the market will pay. Just because you made a higher margin last week doesnt mean out of the good of your heart you make less the next week because.....why exactly? Yeah these are GPU's not insulin. If the market will pay six times what a product is worth. Its worth that six times. Example: cars.
No economics does work that way. If I feel it's overpriced then I won't buy it. It goes both ways. Most people just tend to forget that part of economics and pay the inflated prices.

"dj-electric said:
There's nothing "gimped" about this card. Its cooler is simple, but effective. It would reach the 99th percentile performance of any other GTX 1060 6GB in the market.
It may not be gimped to the average person, but I tend to push my card and I don't see a lot of push out of that cooler. I'm mean; am I saying it's a bad card for the average gamer? No.. I just want a better cooler and not a screaming overworked cooler. They clearly cut the price of the card by putting a single fan on the cooler. So, that's how they are making their money back.

EDIT: I have done all the research I need to do on that card. I never plan to buy that card it still falls into being overpriced IMHO, buddy. I don't spewing claims, I give cold hard facts.
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#15
TheMailMan78
Big Member
"Mindweaver said:
No economics does work that way. If I feel it's overpriced then I won't buy it. It goes both ways. Most people just tend to forget that part of economics and pay the inflated prices.



It may not be gimped to the average person, but I tend to push my card and I don't see a lot of push out of that cooler. I'm mean; am I saying it's a bad card for the average gamer? No.. I just want a better cooler and not a screaming overworked cooler. They clearly cut the price of the card by putting a single fan on the cooler. So, that's how they are making their money back.
Thats exactly how the market works. If you "feel" its over priced then great dont spend your money. Thats your share of the market. If the REST of the market doesnt "feel" like you and pays the inflated prices then guess what. They will happily lose your sale as the market dictates its worth that price. If the entire market "feels" like you THEN they will do two things. 1. Lower the price. OR 2. Stop selling the product. Basic economics here.

"altcapwn said:
Jesus, why the prices are still so high in Canada?

For a GTX 1060 6GB,
390$ CAD vs 250$ USD.

250$ USD to CAD == 335$

What the fudge?
Your currency is based off commodity (Oil). Since said commodity is worth jack so is your money. Sprinkle on all the wondrous taxes and BOOM you aint buying anything.
Posted on Reply
#16
dj-electric
"Mindweaver said:
No.. I just want a better cooler and not a screaming overworked cooler. They clearly cut the price of the card by putting a single fan on the cooler. So, that's how they are making their money back.

EDIT: I have done all the research I need to do on that card. I never plan to buy that card it still falls into being overpriced IMHO, buddy. I don't spewing claims, I give cold hard facts.
Facts are the temps are great, and the card is quiet. The superclocked version used to cost only 10$ more but 249$ is a great price for it. It is not overpriced in any way.
I don't get the 'triggered, ultra offended' mode i'm spectating from you now. Chill out.

"Thanks for the tip DJ, according to benchmarks this card is great for gamers. Its silent and cool. I would personally want a higher end model for my own reasons". Extremely hard. I know.
Posted on Reply
#17
Mindweaver
Moderato®™
"dj-electric said:
Facts are the temps are great, and the card is quiet. The superclocked version used to cost only 10$ more but 249$ is a great price for it. It is not overpriced in any way.
I don't get the 'triggered, ultra offended' mode i'm spectating from you now. Chill out.

"Thanks for the tip DJ, according to benchmarks this card is great for gamers. Its silent and cool. I would personally want a higher end model for my own reasons". Extremely hard. I know.
I"m not triggered, buddy. When I said gimped I was speaking of the cooler. I'm sure the reviewer tested the card and found it cooled will in the short time they had it. The card might be great for the average person, but I still feel that it's overpriced at $249. That's really all I have to say about this card. Thanks for showing me that there is still hope for better GPU prices. I'm just waiting it out a bit longer. :toast:
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#18
Vya Domus
"Mindweaver said:
That's a gimped card and you won't be able to overclock it
That's just not true , or rather it means nothing. I got a blower style card from ASUS which has board as basic as it gets most likely and it clocks as high as 2151 Mhz if I keep the fan speed high enough which isn't even close to 100%.
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#19
Parn
Despite the cool down for mining, the price of graphics cards is still at its all-time high because of manufacturers' greed. Well, f*ck this shit. I won't be upgrading until the price is back to how it was before the mining boom.
Posted on Reply
#20
Vayra86
"Mindweaver said:
No economics does work that way. If I feel it's overpriced then I won't buy it. It goes both ways. Most people just tend to forget that part of economics and pay the inflated prices.



It may not be gimped to the average person, but I tend to push my card and I don't see a lot of push out of that cooler. I'm mean; am I saying it's a bad card for the average gamer? No.. I just want a better cooler and not a screaming overworked cooler. They clearly cut the price of the card by putting a single fan on the cooler. So, that's how they are making their money back.

EDIT: I have done all the research I need to do on that card. I never plan to buy that card it still falls into being overpriced IMHO, buddy. I don't spewing claims, I give cold hard facts.
Sorry but it still is a weird statement to say 'gimped card' when the reality is all Pascal cards clock within a 5-7% clock range on OC regardless of cooler. And none of them succeed in keeping Pascal under 75 C on air with full voltage. So 'gimped'? No. Your perception of things is just off. And if you want maximum performance and then buy a 1060... well. You're not special when you say 'I tend to push the card' - all Pascal cards are BIOS locked anyway.
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#21
TheOne
I worry about how this will effect the next generation of graphics cards.
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#22
Xaled
Lawl..2 nightmare years for us..
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#23
Casecutter
Here's the thing at this point in any of these mainstream GPU product cycles such cards would have dropped well below MRSP. Now sure there's the premium for GDDR memory, but that's not all the influence. As when a GTX 1060 6Gb came to market it used a small piece of silicone with 6Gb memory, and was priced at $300 MSRP upon release in July 2016. Consider that a not just 3 week earlier AMD had released the Polaris RX 480 8Gb it was 15% large than the coming Pascal part that countered it and an extra 2Gb of GDDR; although the MSRP was just $240. Today I would say they trade blows in performance and in some cases the now RX 580 is ever so slightly in a better position as it shown to have the right stuff for long-term seeing DX12, Vulkan and extra memory.

So, where does that leave use today, honestly I see some coordination on all sides... AMD, Nvidia and there AIB's in hoping to keep pricing propped-up by curtailing supply, and sure there's some truth to GDDR supply and prices but that's not all of it! They're all trying to push what had been a "mainstream" parts well above the $300 threshold. Such cards where considered the mainstay at 1080p, but now as 1080p is and has been the baseline for the past years, the whole consortium of gaming hardware (including the monitor companies) are look to bump the price of our next mainstream gamer outlay.

Today looking at the long held trends of price degradation for such "long in the tooth" technology and some adjustment give GDDR supply I'd stipulate prices for such standard/generic built offerings should be at perhaps; $220-230 for a GTX 1060 6Gb, while a RX 580 8Gb at $240-250, such prices might entail rebates.
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#24
Fx
"However, producers of graphics cards obviously don't want to give away their record-high profits in their entirety; and they're showing some reluctance, some "pricing memory" on their graphics cards, maintaining gross margins in the 20% area, double that of pre-mining pricing."

They can keep that memory longer for all I care. I can continue to get by on my 980Ti for much longer until they align their pricing closer to the market demand.
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#25
Divide Overflow
Demand is down, supply is up and prices remain high. :banghead:
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