Why has capitalism failed in the video card industry?

[imported_zenwhen]

When I woke up this morning, i checked the shipping status of my eVGA 6800nu. I bought this card because I am unwilling to pay 400 dollars for a 6800GT, or get on Outpost.com's whacky Russian Roulette waiting list for a $350 one.

I started wondering at what point the video card companies thought they charge $400-$600 for a GAMING card. The hardware surely isn't worth such a price. The 20 FPS over the midrange certainly isn't worth the price.

Why do we, the consumers, buy cards at this ridiculous price? Why do we, as consumers, allow such a high price point to be set? Have we forgotten that we are the ones who should be setting these price points?

Why can't we sit one generation out? We could just forget about retarded benchmarks like 3DMARK, and sit out one generation. All of us would buy the midrange, and make a statement that we aren't willing to pay over $300 for high end gaming performance.

You can bet your ass that prices would shift within six months if would could get the Counterstrike ?gotta have 600FPS? and the 3DMARK ?gotta gave the highest score? kids to calm down for half a year and put a hurting on the pocketbooks of Nvidia and ATi.

Is there ANY hope that we could take back our rights as consumers and start paying non-inflated prices for hardware again?

 

[CaiNaM]

failed? it's a perfect example of working properly.

you had a choice, and you bought the midrange card. be happy

 

[reallyscrued]

umm alll the questions u asked are ethical questions. the point is, if people have money to spend, they will spend it. and if card manufacterers can sell cards at such high prices and still have people buy them, then they will continue to do so. so consider urself lucky that u figured it out and are sticking with midrange, but dont ask questions that have common sensed answers. i also bought a 6800NU and am pleased with it for the money i spent.

 

[kylebisme]

I got my xt-pe for $417 shiped, so capitalism did me good.

 

[imported_zenwhen]

When consumers become willing to pay inflated prices, capitalism fails. When consumers make a stand, everyone wins, and capitalism succeeds.

 

[fsstrike]

If price points on the 6800U and X800XTPE were around 300, then I dont thinnk thy would even exist. It costs them to much to manufacture these cards, and it just wouldnt be worthit to produce them. You get what you pay for, if you only want midrange, then buy midrange.

 

[imported_zenwhen]

Perhaps common sense economic theories are lost on the ears and eyes of gamers.

 

[gururu]

you could just buy an xbox...

 

[imported_zenwhen]

The price of the hardware in question isn't what it is because the hardware cost forces the pricepoint. The 9800 Pro was 400 dollars when it came out. It is 200 dollars now and still in production. The hardware didn't magically become cheaper.

Demand decides price. When demand becomes based on epenis instead of actual need, prices become inflated.

If consumers were to make a statement that they were not going to put up with the initial price gouging and paper launches that create these "shortages", they would stop.

 

[Somniferum]

Originally posted by: zenwhen
When consumers become willing to pay inflated prices, capitalism fails. When consumers make a stand, everyone wins, and capitalism succeeds.

It's not a question of capitalism failing or succeeding. It's just the reality of the market.

Personally I won't pay more than ~200 bucks for a video card. That means I never have the fastest possible machine at any given moment, but it's still plenty fast for my purposes. I can play all the newest games at decent resolutions and reasonable framerates, which is good enough for me.

I know people who are willing to pay $400+ for a video card, and others who won't spend over $100. Everyone has their price point.

The technology continues to improve over time, and with each new generation the previous generation gets cheaper. $200 today will buy you a card that's 10x faster than the card you could get with the same money a couple years ago. Capitalism is working just fine.

 

[kylebisme]

Originally posted by: zenwhen
The price of the hardware in question isn't what it is because the hardware cost forces the pricepoint. The 9800 Pro was 400 dollars when it came out. It is 200 dollars now and still in production. The hardware didn't magically become cheaper.

Demand decides price. When demand becomes based on epenis instead of actual need, prices become inflated.

If consumers were to make a statement that they were not going to put up with the initial price gouging and paper launches that create these "shortages", they would stop.

there are also research and design expenses to consider, as well as losses in other attempted products which must be accounted for. Also, hardware does get cheaper over time; not magiclly but very practicaly as yeilds improve and the tooling costs are recooped.

 

[imported_zenwhen]

The question isn't the current reality of the market, but who is deciding that reality. We are allowing the producer and not the consumer to decide the prices we will pay for hardware.

I suppose after seeing the response here, I have to just realize that people will defend their video card vendor's right to rape them to the end.

If you honestly believe prices couldn't drop on initial hardware releases I feel very sorry for you, and regret that there are always going to be people who will pay whatever price is shoved their way.

TheSnowman:

I agree with you, but there isn't a 200 dollar difference per unit to be had in the factors you offered.

 

[Somniferum]

If vendors had to charge the same price for a new card with better technology as the old card, or close to it, what would be the incentive to innovate?

 

[imported_zenwhen]

People will stop buying the old card, thus they will have to innovate to keep the customer buying.

Wow, the customer would control the market. How nice.

 

[Somniferum]

People are still buying the old cards though, even now.

99% of video cards sold are probably those crappy MX-type cards that come in DELL and Gateway systems, or worse yet, onboard video.

 

[kylebisme]

Originally posted by: zenwhen
I agree with you, but there isn't a 200 dollar difference per unit to be had in the factors you offered.

Yet the manufacture isn't geting all of that $400 or $200 either as the distributors and retailers also get their chunk. Then there is marketing and customer relations costs that have to be considered. Furthermore, How much did R&D cost? How much did tooling the line cost? How many chips/cards did they sell before droping the price? Without knowing all that and more, you really aren't in any postion to make any claims as to what the dollar difference per unit is.

 

[imported_zenwhen]

I suppose I am idealistic in thinking that consumers as a whole would ever work to stamp out the initial price gouging.

I was simply wondering. Thanks for confirming this for me.

I'll let this die.

 

[CaiNaM]

the funny part about all this is all the replies...

capitalism has nothing to do with the price of a video card.


it's either a politcal system and/or ideal.

economincs based on this social/political system (capitalism) determine the costs/pricing of items...

or an economic system in which the means of production and distribution are privately or corporately owned.

 

[kylebisme]

Originally posted by: CaiNaM


the funny part about all this is all the replies...

capitalism has nothing to do with the price of a video card.


it's either a politcal system and/or ideal.

economincs based on this social/political system (capitalism) determine the costs/pricing of items...

or an economic system in which the means of production and distribution are privately or corporately owned.

Your reply is the funny one, I think you need to go back to the books for a while.

 

[klah]

The market has worked perfectly to bring buyers and sellers together. Is there any product sitting stagnant in the channel where willing buyers can not locate it?

I started wondering at what point the video card companies thought they charge $400-$600 for a GAMING card. The hardware surely isn't worth such a price.

It is worth whatever consumers are willing to pay. Same as a diamond, Ferrari or beer.

Video cards have not gotten more expensive over the years. The GF2 Ultra had a MSRP of $500 when it launched in 2000.

http://www.anandtech.com/showdoc.html?i=1298&p=15

At a $500 price point the GeForce2 Ultra...

Why can't we sit one generation out? We could just forget about retarded benchmarks like 3DMARK, and sit out one generation. All of us would buy the midrange, and make a statement that we aren't willing to pay over $300 for high end gaming performance.

What incentive would manufacturers have to spend hundreds of millions of dollars designing better products if there were no market for the current high-end products?

 

[DrBosk]

I know the original poster said he was going to let this die, but I figured I had to put in my 2 cents.

The reason prices start so high is a result of two pricing methods. 1) Price skimming - Technology starts at a high price and then drops to recoup some of the cost of R&D. Production price starts high but then drops, and quantities are limited at inital release. 2)Price discrimination - The price starts high because people are willing to buy at that price. Then the price is dropped over time to get each additional person to buy that wouldn't have bought at the higher price. This reduces the "Oh, I would have paid more for that!" effect. Basically, as long as people are willing to pay higher prices, they will charge higher prices, thus, it is a price dictated by consumers.

 

[Garuda]

You people are n00bs. Video cards - on average - are much cheaper now than they were before. And $600 top of the line video solutions are not a new concept. Voodoo 2 back in 1997 cost that much when you put two of them together. Besides you don't need a $600 video card to play games. Maybe you're just pissed that you can't afford it. Don't blame it on capitalism.

 

[MercenaryForHire]

/bought a 9500Pro just recently



- M4H

 

[LeoMael]

and STILL using mine

 

[Mday]

You dont seem to understand what capitalism is if you are making that type of statement. Capitalism has nothing to do with the consumer. It has nothing to do with offering superior products. Capitalism is an economic system where by regulation is done by the industry in terms of pricing and distribution. You as the consumer, only contribute by paying.