The latest GPUs are still out of reach for the mass consumer, and even older models of graphics cards are still holding on to a hefty price tag.
Gamers have always lamented the high price of graphics cards, and everyone is thrilled to know that cryptocurrency mining is a thing of the past, and that GPU prices will eventually cool down. However, the latest GPUs are still out of reach for the mainstream consumer, and even older models of graphics cards are still holding on to a hefty price tag.
If you haven’t noticed, today’s tech industry is going through a massive crisis. The leaders of companies struggled to find ways to save every penny by laying off employees, among other solutions to please investors. One of the “other solutions” is to limit the supply of products.
During an investor call Tuesday night, AMD CEO Lisa Su tried to assuage investor anxiety by pointing out that the company has and will continue to support GPUs to “balance by supply and demand”. Of course, that’s just another way of saying, “we’ll keep prices up by reducing the number of products sold”.
“We reduced supply in the third and fourth quarters,” Su told investors. “We will continue to reduce supply, but not as strongly as before, in the first quarter of this year.”
Many hardware companies are used to the high demand caused by the pandemic and the crypto boom. Now, with both driving factors on the decline, companies are finding themselves with large inventories and are looking for ways to balance supply and demand.
The laws of economics force them to lower their prices to push their products as quickly as possible. However, that also means sacrificing huge profit margins. AMD’s non-GAAP gross margin surged to 51% last quarter – if that number fell, investors would see it as a loss.
Selling the product at a normal price will not make the producer lose money. This has only short-term effects – reflected in the quarterly results. However, it has a big impact on investors’ portfolios – which is why companies are constantly under pressure to ensure positive growth.
The price of graphics cards at the moment is still very high (Photo: Tech Spot)
But AMD isn’t the only company looking to “prevent” a couple of bad quarters. Sony has also been spotted doing the same thing in the past week.
On Tuesday, multiple leaks said that Sony has cut the number of PS VR2 orders shipped by 50%. Last year, the company announced to investors that it would ship 2 million PS VR2 in the first quarter of 2023. But now, they claim that it cannot exceed 2 million units until the end of 2023 or early 2024.
However, AMD or Sony cannot compare with Nvidia. Last November, CFO Colette Kress told investors that the company was responding to a drop in demand by reducing supply.
“We still see the gaming market as a good growth, and will continue to see sell-through rates every day,” Kress said. “Therefore, we have decided to reduce the number of factory orders. This time we have reduced the number of orders related to the game segment so that we can adjust the inventory.”
That’s why we still have to buy GPUs with retail prices up to 800 – 1,200 USD – the price that cryptocurrency “miners” are willing to pay. These companies need to achieve success in the NASDAQ to make them realize that the price is too high for the average consumer.
And the solution here is quite simple. Don’t let your money fall into the hands of the aforementioned companies. Gradually they will find this is a tough market. In particular, gamers need to firmly say “no” for a few quarters, through which manufacturers will realize that their tricks no longer work.
