Price war coming?

[Dribble]

http://www.fudzilla.com/graphics/graphics/nvidia-preparing-to-lose-millions

Sounds good to me

 

[Leyawiin]

Nvidia is striking while the iron is hot. The more upper/mid buyers it can entice with the GTX 460 prior to SI's release the smaller the market for AMD once it does come out.

 

[ModestGamer]

Nvidia is striking while the iron is hot. The more upper/mid buyers it can entice with the GTX 460 prior to SI's release the smaller the market for AMD once it does come out.

Little johnny wants a ne video card for christmas. Little johnny gets the brand new just released wahzoo bang up card from WGAF. Little johnny tells all his friends his WGAF card is awesome. They go talk to mommy and daddy who then buy them WGAF cards.

The real issue for nvidia isn't always performance. Its release timming. One of the best times of year to drop new hardware is just before thanksgiving. Coupled with favorable benchmarks its easier to sell hardware that time of year providing more market penetration.

Nvidias current summer release schedule is making the competitve issues they have that much worse.

 

[evolucion8]

http://vr-zone.com/articles/nvidia-geforce-gtx-460-prices-cut/9760.html

"Unfortunately, the GeForce GTX 460 hasn't been as much of a hit as expected, with supply outstripping demand. As a result, prices for the already bargain priced GTX 460 are dropping across the board. The GTX 460 768 MB, previously priced at $200, can now be had for as little as $180. The GTX 460 1 GB, has also dropped to $220.

Of course, this comes as no surprise, as it was expected and rumoured at the time of the price cuts to GTX 470 and GTX 480. Reference GeForce GTX 460 768 MB are now available between $179-$189 across a variety of AICs on Newegg and Tigerdirect, down from $199. The best deal, however, is the EVGA GTX 460 768MB Superclocked, which features an impressive 13% higher clock speed. Amazingly, this card is available for $189 at Newegg, with a mail-in rebate bringing it to $179!"

Seems that's the price war already started.

 

[DominionSeraph]

Price drops for the 5000 series would be due. The 5750, 5770, 5830, and 5850 are all in bad spots.

The 5750 and 5770 get outperformed by the $105 4870.
5830 is slower, hotter, and louder than the GTX 460 768MB which is within $10 of it.

Then they have nothing from ~$180 to ~$280, where the 1GB GTX 460 lies.
The 5850 certainly doesn't warrant a $60 price premium over the 1GB GTX 460.

Since the GTX 470 dropped $80, it can now be had at the same price as a 5850. It outperforms the 5850 by a greater margin than the 5850 outperforms the 1GB 460. On that even price level, I'd say its greater performance (and avoidance of ATi drivers) largely negates that it uses 90 watts more under load and that it's a bit louder. (Although if I was given $280 under the condition that I had to spend all of it on one card, it would be the 5850. [an 8800 GTS will noticeably increase the room temperature in my unairconditioned computer room. An additional ~120 watts over that card that a 470 represents would be unacceptable.])

 

[PingviN]

Nvidia probably wants to saturate the market as much as they can before S.I (or is it N.I - I don't know anymore).

 

[3DVagabond]

There are a few typical reasons for what nVidia is doing. One is cash flow. Someone in another thread was equating cash flow with profit. One has absolutely nothing to do with the other.

Cash flow is what meets your monthly (or daily, if you prefer) expenses. If you have a payable acct. for $100.00. You need $100.00. It doesn't matter if you made profit while you acquired that $100.00. You just need a hundred bucks. You can acquire it simply by liquidating assets. It will meet the purpose of paying the bills.

If nVidia (or some other fictitious company if it pains you to look at nVidia this way. ) has $100K in fixed expenses per month, just to apply a nice round figure, then they must somehow come up with that money each and every month. This is before they concern themselves with making a profit.

Let's say that on avg. nVidia grosses $100 on each card they sell. In the end this gets them $20 gross profit on each card. Well, the first thing they need to do is sell 1000 of them just to pay the bills. They haven't actually made anything off of the cards yet, but they've paid the bills. (There is a point where they actually make ~$20 off of each card, but the math pains me to think about it right now. IIRC it's at about 100K cards, but don't ask me to prove that number.)

Now let's assume that nVidia isn't selling 1000 cards a month. They can't pay the bills. Even if those cards cost them nothing, they still haven't generated enough cash flow to pay the bills. Suppose they drop them to $50 a card and sell 50K cards? They lost $30 on each card but paid the bills with $150K capital left over. In the short term, this could be a positive thing to do. It gives them working capital. Now, you can't do this indefinitely, but sometimes it is a smart business move.

Another reason is just to get rid of something at a loss now instead of waiting because it's value is going to drop dramatically before you could sell it at a profitable price.

There's also end of fiscal year (or quarters) antics and balances of assets to expenses and inventory to inventory turns, etc... September is the end of an important quarter. You need to have your business in good financial shape for the forth quarter of the calender year. For the Christmas season. nVidia screwed up last Christmas. They don't want to do it again. They don't seem to be too well set this year either, product wise anyway. They need to do whatever they can to take advantage of Christmas and hopefully align themselves to stay viable until they do get back up to speed with their technology.

 

[Idontcare]

cash flow – The cash flow in a business plan is the change in the cash balance. For example, the cash flow for a month would be a positive $10,000 if the balance was $10,000 at the beginning of the month and $20,000 at the end of the month. It is important to distinguish cash flow, which is the change in the balance, from cash or cash balance, which is the resulting ending balance. More formally, cash flow is an assessment and understanding of cash coming into and flowing out of the venture in specific periods of time. This can be based on projections or actual cash flow.

Read more: http://articles.bplans.com/business-term-glossary/business-terms-c#ixzz0ywYJXukC

 

[Leyawiin]

Since the GTX 470 dropped $80, it can now be had at the same price as a 5850. It outperforms the 5850 by a greater margin than the 5850 outperforms the 1GB 460. On that even price level, I'd say its greater performance (and avoidance of ATi drivers) largely negates that it uses 90 watts more under load and that it's a bit louder. (Although if I was given $280 under the condition that I had to spend all of it on one card, it would be the 5850. [an 8800 GTS will noticeably increase the room temperature in my unairconditioned computer room. An additional ~120 watts over that card that a 470 represents would be unacceptable.])

This is exactly the situation I found myself in. I have a Sapphire Vapor-X HD 5850 arriving today. Yes, I paid about $300 for it. Thing is, I wanted the coolest running higher performance card I could get in the smallish Lian-Li case and office room I keep my PC in. I tried a MSI GTX 465 1GB flashed to a GTX 470 and the heat it belched into the room while gaming was unacceptable - much worse than my OC'd 8800 GTX. To match the Vapor-X @ 735 Mhz a GTX 460 1GB would need to be OC'd a fair amount (models like an EVGA Superclock or MSI Hawk). Again, a good bit more power usage and heat than the HD 5850.

Sometimes it depends on your particular situation what card is best. Factoring in heat/power usage vs. performance and fan noise the Vapor-X was the best choice for me (even at a price premium).

 

[Phynaz]

Nvidia is striking while the iron is hot.

You don't lower the price of a hot product. You lower the price of a cold product.

 

[nyker96]

http://www.fudzilla.com/graphics/graphics/nvidia-preparing-to-lose-millions

Sounds good to me

Oh definitely, I already feeling it's upon us, they were selling 798mb version of 460 for $145 a piece with free games at chief.com, almost pulled the trigger. now they are selling 5770hd for 135 a piece at newegg. these prices would be insane only a months ago. but now they are becoming the norm. this new 460 release is definitely good for all of us. Love it, this is one WAR I can love! being it on!!

 

[Leyawiin]

You don't lower the price of a hot product. You lower the price of a cold product.

Under most circumstances, but this isn't most circumstances. Think of all the glowing reviews, think of all the posts from people who've bought one or are contemplating buying one. Nvidia is trying to move as many as it can because its a window of opportunity, not because the GTX 460 is "cold".

Even Honda had regular clearances even though its cars were selling well. Sometimes its about volume.

 

[Skott]

I recently bought a GTX460 so I'm good for a while. We can always use a good price war though. Its time the GPU prices come down from their lofty prices.

 

[Phynaz]

Under most circumstances, but this isn't most circumstances. Think of all the glowing reviews, think of all the posts from people who've bought one or are contemplating buying one. Nvidia is trying to move as many as it can because its a window of opportunity, not because the GTX 460 is "cold".

Even Honda had regular clearances even though its cars were selling well. Sometimes its about volume.

With all those glowing reviews you don't devalue your product and your brand by cutting its price if it is selling well.

 

[tweakboy]

Im in no need for a video card but the 480 GTX can be priced at 250 dollars. That would get them big time sales. Thanks

 

[lopri]

It came already. I've been eyeing at GTX 460 and the drops are pretty big at least for 768 MB versions.

http://www.evga.com/products/moreinf...namitedata.com

http://www.microcenter.com/shopping_...?action=delete

 

[evolucion8]

Its coming close to HD 5770 territory where there's not card that can compete with the GTX 460 768MB

 

[HurleyBird]

Will be a pretty short price war. Look for AMD to increase prices again for HD6xxx and keep them there throughout the entire product generation (again) because Nvidia has next to nothing.

 

[RussianSensation]

There are a few typical reasons for what nVidia is doing. One is cash flow. Someone in another thread was equating cash flow with profit. One has absolutely nothing to do with the other.

Cash flow is what meets your monthly (or daily, if you prefer) expenses. If you have a payable acct.

Absolutely Incorrect.

Step 1: Revenue - Cost of Goods Sold = Gross Profit

Step 2:
Gross Profit
- Selling, General and Administrative expenses (SG&A)
= Earnings Before Interest and Taxes (EBITDA)

Step 3: EBITDA - Depreciation/Amortization = EBIT

Step 4: EBIT - Corporate Income Taxes = EBI

Step 5: EBIT (Cash Flow) after taxes or EBI
+ Tax Depreciation/Amortization
+ Non-recurring/one-time expenses
+ Change in Non-Cash Net Working Capital (Annual Change in Current Assets - Current liabilities)
- CAPEX (capital expenditures)
= Undiscounted Maintainable Free Cash Flow From Operations

Alternatively, you can work backwards:

Net Income Before Taxes
+ Interest Expense
+ Amortization/Depreciation
+ Non-recurring/one-time expenses
+ Change in Non-Cash Net Working Capital (Current Assets - Current liabilities)
- CAPEX (capital expenditures)
= Undiscounted Maintainable Free Cash Flow From Operations.

 

[OVerLoRDI]

Cut prices by HALF?.... that seems a bit extreme and unlikely

 

[bryanW1995]

if amd is really able to dominate the market the way so many seem to hope, they'll price the cards just like any other company in a dominant position would; aka, higher than giraffe *****, er, ears. our best hope is for a strong 6xxx and a quick, competitive follow up from nvidia.

 

[soccerballtux]

regarding the cashflow discussion, guys I don't think that really holds water considering Nvidia has some $X billion in the bank.

 

[Tempered81]

Im in no need for a video card but the 480 GTX can be priced at 250 dollars. That would get them big time sales. Thanks

Hahah!

 

[DominionSeraph]

With all those glowing reviews you don't devalue your product and your brand by cutting its price if it is selling well.

A price cut can get people who weren't going to buy to buy, and get people who were thinking of buying a cheaper item to step up to a higher ticket item.

Sales drive traffic.

 

[Acanthus]

I'll be in the market for a new card for a new rig in a week or so.

The $200 price mark is my target.

The GTX260 1GB @ $180ish would be ideal.