Why has capitalism failed in the video card industry?

[BenSkywalker]

Supply versus demand.

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

Stop buying mid range products then, that is where the inflated prices are. As of now between yield considerations and the type of RAM they are shipping on high end parts we are lucky the highest end parts are *only* $500(as odd as that may sound). $200 for the x700 and 6600GT is where nV and ATi are making the real money(check their financial breakout). With how quickly the highest end parts are selling out we are rather fortunate that the retailers have been so poor with their capitalistic skills.

I for one am extremely pleased people are willing to shell out massive amounts of cash for vid cards- I just wish they were on the sound end of the spectrum too so we could see the kind of enormous leaps on that front that we do on the vid card side(get out of the antiquated pregenerated sounds with some reverb effects to real dynamic sound generation). If the money moved out of vid cards so to would the R&D to keep up the extremely rapid level of development.

Capitalism at its core is survival of the fittest and individualistic, certainly not the collectivist/Utopian/Marxist system that you seem to want it to be.

 

[ronnn]

Its not capitalism that is at fault. It is all the money being spent on useless wars - is wrecking everyone's ecconomy. Oil will be $80.00 a barrell soon and we will be freezing in the dark.

 

[JeremiahTheGreat]

Obviously then, its time for war!

Anyway, I think video card prices are outrageous! Which is why is why i'm not going to buy one, just turn the texture quality to 0, 640x480, low everything, and you can still make it work

 

[Reliant1]

It is capitalism... Supply and demand. If they weren't selling like hotcakes they wouldn't still be as expensive as they're now.

 

[Keysplayr]

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.

Why in the world would you think that ATI or Nvidia would care if they never sold a single high end part?
The mainstream and value segments are both companies bread and butter. There are no ethics in big business. Capitalism is working out just fine, if your wealthy. Just like buying a car. If you cant afford a porsche, you don't get one and you pick up a Hyundai. Poor and middle class folks always get the hurtin put on them. We always have to settle or break our asses to get what we truly desire.

The hardware did not become magically cheaper, of course. The market made it cheaper. All technology becomes cheaper with time, even for the manufacturers. After their R&D overhead has been compensated for, the prices can drop.

 

[nRollo]

Capitalism hasn't failed, consumers have failed. Supply/demand sets the price, and if so many people didn't think their existence hung on being able to run at the same settings as the guy with the fastest system, video cards would be much cheaper.
If people didn't have trying to get the highest 3dmark as their hobby, something that's totally meaningless, video cards would be cheaper.

Every year we shell out $400 or $500 to jack it up one resolution notch and one one AA/AF notch. As long as we do so, we'll create the market for $400-$500 video cards. (if not more)

 

[Keysplayr]

Exactly. NV45 and R-whatever will easily debut at over 500.00. More than likely closer to six. And that is if it is available in quantity.

 

[Aries64]

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?

Right on. Does anyone remember the Quantum 3D Obsidian X24 add-in card. It combined 2 Voodoo2 chipsets on a single card for the original SLI (Scan Line Interleave) iteration. It sold for $600.00 AND IT WAS 3D ONLY. You still needed a (primary) 2D card!!! I still have one in my old dual 200MHz/512K Pentium Pro system collecting dust.

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.

Why in the world would you think that ATI or Nvidia would care if they never sold a single high end part?

Well put. And finally:

Capitalism is also known as the "free enterprise system". A manufacturer is free to sell it's products at whatever it deems fit - and consumers are free to buy it or not. Supply and demand, no matter how great or sh$%ty a product is, no matter what it is, that product is worth whatever a buyer is willing to pay - period.

 

[Zebo]

You think a 5900U or 9800pro for $200's a good deal?

What cards are a good deal to you?

I can prove to you these $400 cards are a good deal once you answer.

They are right in-line with price/performance curves consumers use.

It's not like throwing you money away on a FX-53. A item only 5% faster than a A64 3400 newcastle but costs 400% more money.

 

[Zebo]

Another thing to keep in mind, is everything, is paid what it's worth. Proof is someone paid for it.

 

[Acanthus]

Originally posted by: TheSnowman
I got my xt-pe for $417 shiped, so capitalism did me good.

$417? I remember when high end cards were $210 (lmao 3 months ago with the 9800 pro)

They are just plain overcharging this time around, its like the Geforce 2 Ultra days.

 

[Marsumane]

How much is the ferarri compared to the average car? Is it really that many times more fast/ reliable / cool looking/ whatever to be worth the percentage increase in the car? What kind of car do u own? Do u own the ferarri or a comparable expensive model? Why not? Cant u afford it? Can others? This is why (im assuming) u dont have one of the faster cars out there. If you cant afford the fastest graphics card, buy a ti4200 for $75 and play any game out there at playable framerates. The 4200, like the geo, will get u from point a (the beginning of a game or your intial starting point) to point b (your destination point or the end of a game). The point is, you can't always afford the best. Also, the graphcis card industry takes years to get stable prices that coordinate with inflation, supply, and demand. Not to mention that due to it being a new market, the price is changing as demand generally increases and competition varies. The system works perfectly. People are actually not able to all buy the most expensive card now and due to supply, which is low, the price is generally kept high to result in similar profit margins.

(sorry about this rant. Im actually quite drunk and have had to type the last few words 34253x to actually get them to make sense and i just realized i typed quite a few different arguments within the same ranting paragraph. I'll be on in the morning and comment further)

 

[CaiNaM]

Originally posted by: TheSnowman

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.

don't think so.

capitalism:
Economic system characterized by the following: private property ownership exists; individuals and companies are allowed to compete for their own economic gain; and free market forces determine the prices of goods and services. Such a system is based on the premise of separating the state and business activities. Capitalists believe that markets are efficient and should thus function without interference, and the role of the state is to regulate and protect.

please explain to how this dictates the cost of a video card? that is the social/political/ideal.

economy:
Activities related to the production and distribution of goods and services in a particular geographic region.

that is the actual activity. the buying and selling which dicatactes pricing. if you price to high, it doesn't sell, etc.

if i was erroneous, it was with the use of the term "economics", which is that actual "sciene" or study of economy.

 

[DrMrLordX]

All I can say is, "oy". If you don't like de price, don't buy eh?

The only problem I see, right now, is a lack of good mid-range cards to buy. So what if ATI and nVidia are making a killing selling 6600s and X700s? They're better buys than the FX5950s and 9800XTs these days, or at least they are in my opinion. Now if only there were AGP versions available! Argh. Hence the lack of good mid-range cards, for most of us, anyway.

 

[rbV5]

What makes you think video cards are any different than any other product. High-end cutting edge costs a premium.

The fact is that you can get a decent performing card that plays every game out with acceptable performance even if you do have to turn down the eye candy for near $100 if you have a relatively modern PC. Seems about right to me. I paid $409 for an AIW 9700pro near 2 years ago which still performs quite well, the same gaming performace would cost you ~ $130 now if you are a careful shopper.

 

[ufbluebomber]

No offense to the original poster, but I have to agree with the people that say you have no idea what you're talking about. Your argument has nothing to do with capitalism. Its actually more along th elines of socialism/communism and your deisre to have equal pricing so that everyone can afford the newest stuff. But we all see where that got them. Maybe its a bit of an extreme example, but hopefully you get my point. Anyways, according to newwegg.com, Im paying almost $700 for my video card. I'm still waiting for my dell 8400 with a PCI-E ATI 256 X800 XT. But its becuase I can afford it and I happen to want the braggin rights...which we'll see if its worth it hopefully in a few days. Sorry bro, but you're wrong on this one.

 

[stnicralisk]

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.

So why did you buy a graphics card? Why didnt you sit this generation out? If you answer these questions you will have the answers to the same questions you are asking others. You wanted it. You had enough money for it. You decided it had enough utility to warrant that money and you bought it. Certainly you didnt NEED it so maybe it was a purchase based on epenis?

On another note - while the 9800 was more expensive before and cheaper now and the hardware didnt magically become cheaper it is worthwhile to note that the R&D has likely become paid for and that putting the card at that price point will no longer force them to sell their lesser hardware at a price which would likely cut off any profits.

 

[Aries64]

$417? I remember when high end cards were $210 (lmao 3 months ago with the 9800 pro)

What "high end" cards are you talking about? The 9800 Pro 256MB or the GF 5950? Those cards were the LAST high end generation (introduced more than a year ago). Those cards are now more like MAINSTREAM cards. And neither of those cards started out at $210.00. They were about $500.00 each.

And this has been hashed over several times already (by me as well) but I really wish people would stop bitc%^n about overcharging already. If you don't like the price and/or you can't afford it, don't buy it. We are talking about the the "ne plus ultra" (cutting edge) of the PC graphics market, and while the performance increases of the 6800 UF compared to the 6800 GT or the X800 XT PE over the X800 Pro may not be spectacular, if someone can afford the high end and is willing to pay for it, thats their business.

While the introductory prices of the X800 XT PE and 6800 UE are up there, they are no more expensive than the high end cards of 5 years ago or more. And considering that, think about how performance and features have increased (5 or even tenfold?) while the prices have not escalated with the rate of inflation.

Rant over. I'm finished.

 

[PrayForDeath]

Interesting thread, what's R&B anyway?

 

[DAPUNISHER]

Originally posted by: PrayForDeath
Interesting thread, what's R&B anyway?

:music: Rhythm and Blues :music:

 

[Concillian]

My take on this is that the video card market IS where capitalism is making sense.

What single component has the largest change in gaming performance from the bottom of the line to the top of the line? It's not CPUs, it's video cards. This is why the top end cards are hard to keep in stock. As long as they are hard to keep in stock, the prices will remain high.

Would you rather the video card market not make sense like the CPU market? Compare a $200 CPU and a $400 CPU. I think most people would be hard pressed to tell a difference in-game between the two. However, the difference between a $200 and $400 video card is IMMEDIATELY apparent. The $400 can run resolutions and or quality levels that the $200 card cannot. The differences are obvious to anyone not blind.

Part of the issue is that the gaming industry is predominantly young males. Young males have a tendency towards 'upgrading' look at ANYTHING young males tend to be into and you see it... cars? definitely there, stereo/video equipment? no doubt, computers, absolutely, R/C cars? OMG yes. In all these cases we see a tendency for people to spend money on something they may or may not get any actual value out of. It's like the people who pirate software, but never use the software... the entertainment value comes more from the collecting than from the usage.

It's a melding of supply and demand economics with male psychology. Men are competitive, men like to upgrade (potentially to the point of being irrational). Combine that with how available data is about the how much faster someone else's system is than your own and you have a recipe for outrageously priced high end items.

In a market where people will spend twice as much on RAM just to get 2-2-2 timings instead of 2.5-3-3 timings to get an impreceptible performance benefit, it doesn't surprise me at all that people line up to spend $500+ on a video card.

 

[Pandaren]

For an entertaining look at how this thread turned out on Arstechnica, see here.

I've never spent more than $70 on a video card. My last purchase was a Radeon 9100 for $48 - I just need something "good enough." I beat Doom 3 on my Radeon 9100 too

 

[ingenuiti]

In terms of capitalism, the increase in video card prices can be attributed to simple supply and demand and the high barriers to entry.

 

[superkdogg]

Just got my 9800 Pro a month or so ago. Cost less than $200 and outperforms stock XT's @ 435/735. Capitalism is not the issue, as many have said. The market determines the value, not the other way around. So, whether or not it is favorable to the majority of us who would rather not pay $450 for the high-end stuff, that's too bad. When you look closely at the current market conditions, socialism is more the climate. There are less parts available than there are people to buy them, yet the price remains the same and consumers are on waiting lists even though they can afford to make the purchase. That sounds very eastern-block, right?

Also strong agreement to the many who have pointed out that the premium from very good to the best is present in all markets. Cars, homes, shoes, anything. The difference from a brand new Kia to a brand new Chevy Tahoe is only about $30k, or 300%. That's a lot of value considering that the Tahoe gives you virtually everything that a car can, except that it's not the best. To have the best, an H1 will cost you roughly double the Tahoe for no reason except status and the fact that some wealthy people want to buy the very best.

 

[Zebo]

I bet you would have a heart attack paying $26 for a 10" NewYork cheese cake like I did this evening to go at marrie calenders. Now it's in the sewer system...gone. asta la vista.