Because Die size is the primary determinate of production costs, and in the end, retail pricing.
Disagree. Consumer demand and it's relationship to price elasticity is what ultimately determines retail pricing. It doesn't matter what your production costs are if no one will pay for it.
BTW, you still didn't answer my question. I already acknowledged your reasoning in my post but you still didn't say why I should care, as a consumer, how big Nvidia wants to make their die if it doesn't give me any benefit in perf/$.
Look at right now, with falling GTX 1080 prices. Have Vega 64 prices followed?
GTX 1080 cards have better performance, are from the leading company (mindshare) and are selling for less.
Why haven't competitive pressure dropped Vega 64 prices?
Everything from a consumer perspective says they should be selling for less than GTX 1080. But they aren't.
GTX 20xx line hasn't launched yet so there's no need for AMD to drop prices yet. I'm sure Nvidia and partners want to clear as much inventory before the 20xx series launches as possible, hence the price cuts. AMD doesn't have inventory to clear, they have no new cards coming out, so they'll keep the cards at their price as long as possible (i.e. when the RTX series becomes readily available). Additionally, Vega cards were the last cards miners were buying for their farms as the crypto crash happened, so the demand might still be trailing off from that.
You have to look beyond the consumer perspective, to understand why, and it's the production cost, driven primarily by die size economics.
Not necessarily as I explained above. You're also completely ignoring the "fixed" costs that have built up leading to the release of a product. All the R&D expenses are a very significant cost of a product. The mask set is also significantly more expensive than an actual wafer run. Both of these costs are "fixed" going into production, are orders of magnitude higher than the cost of the actual die, and must be amortized over the lifetime of selling the product.
It isn't economically viable to sell that big chip card for the price of the small chip competitor.
Sure it is, your margins will take a hit, but it's certainly viable at current costs. But again, why should I as a consumer be concerned with a company having lower margins?
Ultimately they may be forced to sell remaining stock cheaper, but that will be at a loss, which isn't economically viable. They will probably soon end production of Vega consumer cards (if it already hasn't ended).
When dies get larger, production costs increase, and production cost increases are normally passed on to the consumer.
Once again, depends on the market conditions and demand. Production cost means nothing to the demand of a product, performance does. You're basically arguing that we should want Nvidia to have as high of margins as possible. That, to me, is an insane perspective as a consumer, it's a consumer consciousness equivalent of the meme, "thank you sir, may I have another." (google it for those who may not know the reference).
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