GPUs are on sale again. Since the GPU shortage, graphics cards have not been selling well, but a recent report from John Peddie Research shows that trend is changing. The report shows that GPU shipments have increased by 16.8% compared to the previous quarter, which is a positive sign. Still, I can’t help but be concerned about what this might mean for GPU prices.
Both AMD and Nvidia came out of the peak of the pandemic with new series of graphics cards. Nvidia set the standard with higher pricing than ever before, and AMD quickly followed suit, pricing their cards low enough to be considered a value by comparison. This has made the cost of building a new gaming PC higher than ever.
However, in the past year, it has been difficult for AMD and Nvidia to keep prices up. AMD released its RX 7900 recently due to the sanctions imposed on China by the US.
With shipments increasing again, I’m concerned that Nvidia and AMD will make these pricing changes. This is problematic considering cards of this generation are almost universally priced higher depending on their performance.
For this reason the prices have fallen significantly. As you can read in our RTX 4080 review, for example, it’s a great GPU if you ignore the fact that it’s $500 more expensive than the card it was replacing (for the RTX 3080 $700 compared to $1,200). AMD’s RX 7900 are both solid cards in the Void, but they seem downright pathetic when you consider how expensive they are.
The cards still sold, but probably not at the rate that Nvidia and AMD had hoped. As John Peddie writes in the report: “Over the last three quarters, add-in boards were sold, not in normal volumes, and with complaints about prices, but sold nonetheless.”
However, there is another important factor at work here, which basically guarantees that GPU prices will not drop any further.
Nvidia has reportedly stopped production of the RTX 4070 Ti and RTX 4080 to make room for the rumored super refresh coming at CES 2024 in January. If these super cards are genuine, the price reductions over the past several months were probably intended to clear the way for them to arrive at the same list prices.
It’s great that GPU shipments are improving, but it could also mean that overall prices will rise again. It seems that desktop GPUs are also driving this growth. The report shows that shipments overall increased by 16.8% compared to the previous quarter, but desktop graphics cards increased by 37.4% compared to the previous quarter. Desktop GPUs are the driving factor here.
However, this doesn’t mean that graphics cards will start going above list price. The main concern here is that the low prices we’ve seen over the past several months will disappear and GPUs will go back to list price. It is important to keep in mind a longer historical context. The report said that, although GPU shipments increased for the quarter, they were still down 5.1% compared to last year.
Peddie sees this as an improvement, writing, “This return…is to be highly praised when it reflects the cleanup and improvement of the distribution channel on a large scale.” I would also be remiss to omit Peddie’s warning about these reports: “The mistake is the constant pursuit of sensationalism. It’s tiring.”
At the risk of diving into sensationalism, the biggest risk at the moment is that GPUs will go back to list price, lest we suddenly be in a position to sell GPUs for two or three times their value. This is still cause for concern when the improvements we have seen in pricing on many GPUs are in danger of disappearing.