Are Nvidia and AMD in bed together to make for no competition or price wars?

[happy medium]

Seems a whole heap of trouble was bought down on some chip companies for price fixing.

http://www.brightsideofnews.com/news/2010/5/22/controlling-where-the-chip-prices-fall.aspx

Me and a few other members were talking about how perfectly the price/ performance is lined up with the Nvidia /ATI lineup.

We seem to paying the absolute highest amount possible for video cards latley, and every Nvidia card that gets released seems to fall right in line with the price performance of its ATI counterpart.

What do you think?

 

[OILFIELDTRASH]

If that's what price fixing is then I believe they are. Hell getting a ati card for original msrp would be a deal.

 

[Idontcare]

Lol yes, so too are all the gas stations and grocery stores in my town. And AMD and Intel. And the car deale...everywhere I look the price of cars just seems to magically line up as if they were intentionally priced to compete at a given pricepoint...its just so weird man...

 

[ThorofThunder]

It's pretty much guaranteed.

The opposite is what should be considered odd. That is, when competing companies are NOT in bed with each other in some fashion.

Capitalism. It has its ups, and it has its downs.

 

[GaiaHunter]

Of course we only say this because the price points are high.

If the 5970 was $500, the 480 was $300, the 5870 was $200, the 470 $150, the 5850 $100, the AMD and NVIDIA products would still be just in line in price and performance, but would we be complaining then?

The facts are that there was production problems on both camps, even if for different reasons, and AMD doesn't seem to be in any kind of pressure to drop prices since according to reports it has been gaining marketshare.

 

[happy medium]

Lol yes, so too are all the gas stations and grocery stores in my town. And AMD and Intel. And the car deale...everywhere I look the price of cars just seems to magically line up as if they were intentionally priced to compete at a given pricepoint...its just so weird man...

Thats a good point, but doesn't competition usually bring prices down?

It seems if my corner store has eggs for 1.00$ the supermarket would want your business and sell them for .95. Right?

It seems to me Ati raised there prices and Nvidia stuck there products right in between the spaces?

This way eveyone ,akes a larger profit and we pay more.
Can you give me an instance where this has happened before?

 

[HumblePie]

Thats a good point, but doesn't competition usually bring prices down?

Yes, and when prices are brought down they are magically in sync again.

I think what you are upset about, and I do not begrudge you this, is the fact that there has not been any price drops for a long time like there used to be. Eight months with out a price drop does suck for the consumer.

 

[MagickMan]

Demand is still high so prices are still high, makes sense to me. NV has seen ATI's lineup for a long time, makes sense that they would design theirs to fit in the "gaps" instead of fighting head-to-head again. They know they'll make more money this way.

 

[BD231]

Top end GFX cards will cost you about the same as a PS3 and an XBox combined; while you see top end last gen parts going for sub $100 range and still competing.

DX11 parts are a joke right now.

 

[SlowSpyder]

I highly doubt it. After the price wars from last gen I think both AMD and Nvidia are looking to avoid something similar this time around, that's all.

AMD's parts had been out for a while, they were a known factor. Nvidia launched their parts in price and performance spaces between AMD's cards.

Nvidia could have launched the GTX470 50MHz slower and priced them closer to 5850's, but what would that do for them, especially with their larger more complicated part? AMD could start droping their prices, but what good would that do for them, seeing as the 5850 and 5870 are already cheaper and slower than the GTX470 and GTX480?

I'm sure they are both watching to see if the other flinches, than prices might start falling. But I have no doubt that AMD and Nvidia are happy as things are... hell, for AMD their MSRP has gone up on some of their parts over the last seven months. I don't believe there is any dirty pricing conspiracy in action, just two companies that are happy where their offerings are in the marketplace.

 

[Idontcare]

I'm sure they are both watching to see if the other flinches, than prices might start falling. But I have no doubt that AMD and Nvidia are happy as things are... hell, for AMD their MSRP has gone up on some of their parts over the last seven months. I don't believe there is any dirty pricing conspiracy in action, just two companies that are happy where their offerings are in the marketplace.

I think that is the nuts of it...in a duopoly like the discreet graphics market there is no incentive to drive prices down (and thus gross margins) unless either company is seeking to maximize gross profits and is not supply constrained.

Usually price drops are intended to boost demand, there is no purpose to boosting demand if you lack supply. If you have supply there may still be a purpose served in not boosting demand by dropping price (diamonds anyone?).

However if you have more supply than your competitor and the desire to extract more gross profits from the market then you would seek to reduce price as a means to boost demand for your product (and hence subsequently reduce your supply).

That said, in a duopoly the opportunity for collusion is all the more present...no doubt this is sitting in someones inbox at the FTC already. Whether they feel it is worthy to pursue...

 

[DefRef]

I love how the liberal education establishment has so poisoned young ignorant minds against capitalism that the mere thought of a company making a...GASP!!!...profit is enough to send them rushing to teh Intarwebz to scream that price-fixing is going on and it's a traveshamockery!!! Please. Take an ECON101 class from someone without a Mao poster in the classroom and learn something about opportunity cost and competitive pricing. Sheesh.

 

[Nemesis 1]

I think that is the nuts of it...in a duopoly like the discreet graphics market there is no incentive to drive prices down (and thus gross margins) unless either company is seeking to maximize gross profits and is not supply constrained.

Usually price drops are intended to boost demand, there is no purpose to boosting demand if you lack supply. If you have supply there may still be a purpose served in not boosting demand by dropping price (diamonds anyone?).

However if you have more supply than your competitor and the desire to extract more gross profits from the market then you would seek to reduce price as a means to boost demand for your product (and hence subsequently reduce your supply).

That said, in a duopoly the opportunity for collusion is all the more present...no doubt this is sitting in someones inbox at the FTC already. Whether they feel it is worthy to pursue...

I agree . For the very reasons you gave we are watching AMDs chipset and M/B pricies as AMD chipsets are in short supply. Therefore we expect AMD M/B pricies to rise . I am betting they don't . Than all hell will break loose. Intel M/B should sell cheaper than AMD .80% Intel market share means 80 % of all M/B are Intel chipsets . That makws Intel M/Bs a high demand big supply product . Where As AMDs only has 20% share which makes AMD M/Bs a low supply lowdemand market. Which should translate to higher pricies for AMD M/Bs . If this doesn't change soon were going to bring Action against Asus and Others . This pricing goes against everthing we have learned over the past 150 years . Supply and demand . Higher demand= lower manufactotring cost. Its easily proved .

 

[MrK6]

If anyone read the marketshare report posted in a couple of the current threads, sales this last quarter were up some 40% compared to last year; that's why prices are what they are. When cards aren't flying off the shelves/selling like hot cakes/choose your idiom, then you'll see the prices come down.

 

[Lonyo]

Thats a good point, but doesn't competition usually bring prices down?

It seems if my corner store has eggs for 1.00$ the supermarket would want your business and sell them for .95. Right?

It seems to me Ati raised there prices and Nvidia stuck there products right in between the spaces?

This way eveyone ,akes a larger profit and we pay more.
Can you give me an instance where this has happened before?

Where's the competition when TSMC is the sole provider of chips, and can't make enough?
There is no competition when ATI and NV aren't particularly free to do what they want.
They can see every chip they get (both claim), so why would they lower prices?
The only reason prices are as they are is because of TSMC/supply issues.

 

[yh125d]

I love how the liberal education establishment has so poisoned young ignorant minds against capitalism that the mere thought of a company making a...GASP!!!...profit is enough to send them rushing to teh Intarwebz to scream that price-fixing is going on and it's a traveshamockery!!! Please. Take an ECON101 class from someone without a Mao poster in the classroom and learn something about opportunity cost and competitive pricing. Sheesh.

Oh get down from your soapbox. Plenty of profit was made all around last gen without consumers eating 9 mos. of stagnating prices

 

[Idontcare]

The only reason prices are as they are is because of TSMC/supply issues.

(and because the products themselves are in such demand meaning they both made GPU's worth upgrading to...please no captain obvious retorts )

 

[pitz]

Prices high? Lol. I paid $600 for my 4mb Matrox Millenium back in 1996. Today, you get what for $600, some crazy 2gb card X2?

Gotta keep it all in perspective. Even if AMD and Nvidia are conspiring, its not exactly detrimental to the consumer. In fact, if AMD and Nvidia don't start making money sustainably, then the consumer will suffer from a reduction in innovation and poorer selection in terms of new products.

 

[MagickMan]

I think people were spoiled by the last generation, present prices are more in-line with what has historically been the norm.

 

[BD231]

I think people were spoiled by the last generation, present prices are more in-line with what has historically been the norm.

Or they're just smart enough to stay away from a perfectly terrible rate of depreciation when they see it.

 

[MagickMan]

Or they're just smart enough to stay away from a perfectly terrible rate of depreciation when they see it.

I wouldn't say that, my card is worth more now than when I bought it.

 

[pmv]

Is it not mostly just down to the fact that nvidia have really been struggling to compete recently? Over here in Europe they aren't competing _at all_. Not just 'slotting into the gaps', but charging silly prices that to me say they simply don't care whether anyone buys any of their cards. I guess their reasoning is that if people actually _buy_ their cards they'll have to go to all the trouble of making new ones. Far easier to just make a few and let them sit on the shelves indefinitely. Much less work.

I do wish there was a third major card maker though. Whatever happened to the Glaze3d guys? No chance of Matrox making a comeback? Resurrecting 3dfx? No, thought not. Oh well.

If the cards are still selling well compared to previous years though, who is buying them all, who didn't in previous years? Hasn't everyone already got a good-enough card by now? Is there a big increase in demand from China or something?

 

[SparkyJJO]

The problem is nvidia's lack of delivery more than anything... ATI hasn't had much of a reason to lower prices. And they still seem to be selling enough. If they weren't, and sales were slipping, they'd be dropping the price some until sales pick up again.

Also remember that ATI and nvidia may set the MSRP, but that doesn't mean that the card makers and the retailers have to follow it.

 

[VirtualLarry]

Hasn't everyone already got a good-enough card by now? Is there a big increase in demand from China or something?

I believe that is indeed true.

 

[BenSkywalker]

Plenty of profit was made all around last gen without consumers eating 9 mos. of stagnating prices

Although people always seem to get upset when they are pointed to, the financials don't agree with you. For several quarters last generation AMD and nV were posting losses- not lower profits- they lost money.

I guess their reasoning is that if people actually _buy_ their cards they'll have to go to all the trouble of making new ones.

nV's sales are up a bit over 40% year over year- ATi's are up ~90% year over year. They are supply limited- dropping prices when you can't produce enough parts is flat out stupid.

I do wish there was a third major card maker though. Whatever happened to the Glaze3d guys? No chance of Matrox making a comeback? Resurrecting 3dfx? No, thought not. Oh well.

Glaze never amounted to anything, Matrox is far too small to play in this market now(Intel failed with billions, Matrox doesn't have close to that) and nV owns all of 3dfx's IP. PowerVR and/or Intel are the only companies that have a chance of slugging it out with ATi/nV and in all honesty it is a very slim chance for either of them.