General Discussions

[kingfish]

Almost a year on from our look into why graphics card prices often seem to be higher than their manufacturer suggested retail pricing (MSRP), it’s happening again in much more dramatic fashion. Once again, availability and the ever-present fluctuations of supply and demand are the cause, but this time demand has skyrocketed because of graphics card-powered cryptocurrency mining.

It’s been years since graphics cards were used en masse for Bitcoin mining, because the hardware arms race meant that specialized application-specific integrated chip (ASIC) mining hardware quickly overtook them. Ethereum mining, however, as with other digital currencies, doesn’t benefit in the same way from specialized hardware, so graphics cards are a great solution for mining them, and that’s leading to stock shortages and price hikes.

On Friday, Nvidia stated that it was not happy with the current rising prices of GPUs, however, and requested that retailers take action to ensure the needs of gamers were met before cryptocurrency miners.

“For NVIDIA, gamers come first,” the company wrote in a comment to German website Computerbase.de. “All activities related to our GeForce product line are targeted at our main audience. To ensure that GeForce gamers continue to have good GeForce graphics card availability in the current situation, we recommend that our trading partners make the appropriate arrangements to meet gamers’ needs as usual.”

Here are a current list of graphics card prices at a few different retailers. These are the lowest prices we could find for these cards which are in stock and ready to ship, but many go for substantially more.

MSRP prices are for non-Founders Edition, stock cards.

	MSRP	Newegg	Amazon	Tiger Direct
Nvidia GTX 1080 Ti	$700	$700	$700	$762
Nvidia GTX 1080	$550	$530	$500	$582
Nvidia GTX 1070	$380	$658	$700	$500
Nvidia GTX 1060 6GB	$250	$400	$400	$375
Nvidia GTX 1060 3GB	$200	$357	$243	$230
AMD RX 580	$230	$600	$700	Out of Stock
AMD RX 570	$170	$500	$650	No listing
AMD RX 560	$100	$100	$110	$117

It’s important to point out that not all of the price rises you see are because of unscrupulous gouging. Supplies of base-model cards are almost nonexistent, so only the superclocked, water-cooled, fancy RGB lighting versions of these cards are still available. The cheapest GTX 1070 at Newegg, for example, was the MSI Sea Hawk version that ships from Canada. Other, much cheaper versions just weren’t in stock.

But these were still the cheapest versions we could find. Some stretched even further. We saw one GTX 1070 selling for as much as $850, which would be enough to buy you a far more powerful (for gaming) 1080 Ti and still save money. Miners have wrecked the pricing on the GTX 1060 too, making an extra $100 for the GTX 1080 seem like a far more reasonable purchase.

AMD’s cards were hit far worse, however. Following increased knowledge that they were some of the best cards for GPU mining, their prices have been steadily rising over the past few months, culminating in stock problems around the world. Those show no signs of abating, though we may have finally reached a point where people aren’t willing to pay three times the MSRP for them.

It’s reached such ridiculous heights that the current price for the RX 580 on Newegg is identical to the same card bundled with an AMD Ryzen 7 1700X CPU.

In some cases this price explosion has only been stopped by the cards being out of stock entirely. Tiger Direct has no AMD RX 580s available despite the cards only debuting a few months ago, and doesn’t even have a listing for the RX 570.

While this problem doesn’t appear to have extended to the very top-end cards, that’s more of a problem than it might seem, because most people can’t afford those cards. While it now seems like you can get a “better” deal by opting for a high-end graphics card than one of the more midrange options, that’s not how it’s supposed to be. The middle-of-the-road cards are supposed to offer the most bang for buck, but in a market accosted by mining rig builders, that’s no longer the case.

It’s not clear what can solve this problem, though increasing the number of cards manufactured would be a good place to start. Perhaps we’ll see purchasing limits introduced, as Nvidia does with some of its high-end graphics cards, but it would be a surprise to see either AMD or Nvidia look to clamp down on purchases. Ultimately, a sale is a sale, whether the cards are rendering pixels or crunching cryptocurrency algorithms.

The big rumor is that both companies are working on releasing mining-focused graphics cards which would ship with a slightly lower price tag and no video connectors. That would make them useless for running a gaming PC, but perfect for mining rigs, and could go some way to stem this tide of GPU purchasing that is leaving hardware enthusiasts and gamers with few options when it comes to their next upgrade.

Nvidia speaks out against rising price of GPUs due to cryptocurrency mining

[3dfxgpu]

AMD please do something as i personally learn and want to become game graphics designer for games in far future and because of those miners most people cannot even afford RX 570 that has good mid range performance. 220+ is normal shop price for card like RX 470 but now all market is mess. Miners need to be eliminated or redirected from gaming and graphics market somehow.

[leyvin]

3dfxgpu, the AMD Radeon Pro (Fire Pro) Market has been essentially unaffected by Low Supply, Higher Production Costs and Mining Demand.

While sure it is slightly more expensive to get something like a WX 5100 (£320) instead of an RX 570 (£175 MSRP / £360 ARP) ... these prices have remained absolutely static the past 12 months.

These aren't Gaming Cards., they tend to have ~10-15% Lower Overall Performance, especially in DirectX but as far as Production workloads go they're noticeably more capable hardware.

...

This aside the main issue with Miners isn't actually specifically their increased demand on the Graphics Card Market itself.

As it stands MOST Retailers aren't actually selling that far above MSRP.

RX 570 / 580 have risen from £190 / 220 to £240 / 280 ... sure this is a noticeable increase over MSRP (£50 / 60 respectively) but given the rise in Memory Prices at the Component Level (£11 / GB to £16 / GB for GDDR5 over the past 12 months)., this has a noticeable impact on the MSRP.

So the 4GB / 8GB on the RX 570/580 has risen from £44/88 to £64/128 (Cost) ... this is an increase of £20 / 40 respectively in production Costs.

Keep in mind that Graphics Cards typically have 5% Profit Margin (AIB / IHV) and 8% Profit Margin Retail., minus the VAT.

i.e. £220 for an RX 480., meant £180 (w/o VAT) ... £165 (Retail Cost) ... £153 (Production Cost / Shipping Removed)

£88 of that is for just the VRAM (£65 for the GPU and Reference Board Production).

Keep in mind these are just rough estimate values., but still we're not talking about big margins for these products.

Now we can also estimate the rough cost per die (GPU), as each is 9:7 (232mm-sq / 19.58mm x 11.85mm) ... this equates to ~97 Die Per Wafer (8") based on the production cost increases from the 1978 - 1995 Data (5.6% APR) then we can estimate approx. $8,400 / 150mm Wafer, now it's more common to use 200mm (8") Wafers which results in a 15% Decrease in MfG ($7,143/200mm) or $73.64 / Die (£52.88 / Die)., leaving ~£12 for the rest of the PCB, Components and Manufacturing.

As noted realistically the DRAM prices play a substantial role in regards to the final price point of any given GPU., so as these prices fluctuate / increase, so too will the MSRP of Graphics Products (albeit on a 3 Month / Quarterly) Delay.

Miners are affecting these prices as Cloud / Blockchain Servers become more popularised, increasing the demand for DRAM but given this is not a sustainable market (i.e. it's impossible to predict the Rise and Fall of the Market Demand over 6 months and minimum 18 months sustained) this makes it difficult to actually compensate or even justify increasing production (which could result in A LOT of unsold stock, which is a problem in an industry that has 18 month obsolescence) to abate these wide swings that occur with Mining Uptake Trends ... which have been proven to actually be quite fleeting in Business Terms.

Yes, this is frustrating as we (Consumers) are often hit the hardest with the immediate effects., but keep in mind while IHV might have immediate Profitability (people believe IHV are happy about this because Short-Term Profits increase) the reality is that Long-Term Profitability is actually harmed by this behaviour.

As it puts off consumers from investing in New Products and will ultimately lead to a flood in the Resale Market., which hurts the sales of Next Generation Products that Companies rely on for their Profitability.

Gamers for example can be guaranteed to always want to purchase the Latest and Greatest with Brand Loyalty ... where-as Business' are not, given their focus is entirely on ROI Potential, which is always in-flux.

Yet if Gamers are presented with a substantial market of cheap Resale Hardware without a big enough performance increase between Generations (which is getting more difficult to achieve) or new Features (which take up ward of 18 months to be Software adopted and thus actually worthwhile from the Consumer perspective) ... then this means more will be tempted to Cheap Last Gen Hardware that floods the market (at this point will primarily be AMD) as opposed to Current Gen.

AMD already operates within Slim Profit Margins., but this will also hit NVIDIA pretty damn hard... neither IHV or AIB see return profitability from Resale, which happens outside of the Retail Market, although does commonly occur on Retail Stores (i.e. Newegg / Amazon / eBay / etc.).

These are just some things to keep in mind in all of this and what the ACTUAL position and concerns of IHV and AIB is right now.

The damage Mining is causing isn't that it's burning their Current Market., but rather it's burning the chance for Future Sales.

[black_zion]

Oh it's clear what will solve the problem, more governments banning cryptocurrency exchanges and prohibiting their listing on the stock markets. Neither AMD nor nVidia will do anything to prohibit the sales to miners, evidenced by their continuing work to increase mining performance, and AMD is in no position to discriminate who purchases their GPUs.

[redteam6]

^^ 100% this. The U.S. Gov needs to ban crypto currency or tax the ever living @#$% out of it.

[black_zion]

No, they need to ban it. The last thing this country needs is investment firms putting money into cryptocurrency futures, it's the next sub prime bubble, and when it bursts, there's not even going to be toxic assets left, there will be no assets.

[redteam6]

totally

[kingfish]

If this turns out to be true, which I believe is probable, AMD could decide to manufacturer them. Sell them direct.  'AMD Reference Crypto Cards'. It would not conflict, IMO, with any of their customers as they sell only video cards. Pick up a few extra bucks along the way.

The big rumor is that both companies are working on releasing mining-focused graphics cards which would ship with a slightly lower price tag and no video connectors. That would make them useless for running a gaming PC, but perfect for mining rigs, and could go some way to stem this tide of GPU purchasing that is leaving hardware enthusiasts and gamers with few options when it comes to their next upgrade.

[black_zion]

If you remember ASUS and a couple other companies were supposed to be making special mining edition cards. I don't remember seeing any of them on the market. Re: What has cryptocurrency brought us: ASUS Special "mining" edition cards, rig with 8 mining editi...​

[redteam6]

the problem with this is the miners will still buy gamer cards for resale value.

[pokester]

Exactly! Because they literally are reselling their cards after 6 months of 24/7  100% workload usage to unsuspecting buyers on ebay for more than they paid for them. Why on Earth would they ever choose to stop?

This reply to black_zion: My XFX has a hardware bios switch that sets it to the bios for mining. So yes you are right, it's already happening, but my bet is more will take the XFX path and offer 1 card with 2 setups. Not sure how you change things here, aside from mining becoming unpopular.

[3dfxgpu]

I really hope this rumor is true. Current price for middle class GPU-s is damaging and most of gaming falls in that range and only small percent of people can only afford hi-end cards. AMD especially been known for low price versus performance but now it is not.

[redteam6]

Yeah i do hw reviews and I cant even get one to sample. This hurts more than gamers.

[warpfact0r10]

The reality is there is nothing Nvidia can really do to prevent card sales to miners. So they put out this statement regarding their *recommendation*. That's great, but it won't make a lick of difference. Savvy PR though.

[black_zion]

It'll work as well as overclockers.co.uk pricing their Vega cards $300 above SEP and issuing a $300 code on their gaming forums to protect against miners.

That is to say, it won't.