DF Direct Weekly: Is next-gen GPU pricing out of control?
Welcome to 2023 and the return of DF Direct Weekly! After a brief absence – we actually missed a week – the team returns to discuss the latest gaming and technology news. The year kicked off with the Consumer Electronics Show – CES – and on this week’s show, myself, John Linneman and Alex Battaglia discuss keynotes from Nvidia, AMD and Sony, including our first look at Gran Turismo 7 on PSVR2, while we dig into the latest Concerns about thermal throttling on the RX 7900 XTX reference board as well as new innovations coming to OLED TVs this year.
It’s also time to consider the perhaps inevitable backlash to Nvidia’s GeForce RTX 4070 Ti. Given the extreme reactions, I wanted to offer some more detailed thoughts on why I thought the product was “OK” versus the total disaster that many think it is. There are a number of factors that determine how the RTX 4070 Ti has performed, and of course questions remain about the prospects for the GPU market going forward.
The arguments against the 4070 Ti are pretty simple: it’s the most expensive ’70s product Nvidia has ever shipped, and its specs pale in comparison to previous ’70s products. In terms of relative performance, the 4070 Ti is broadly comparable to the top-end results of the RTX 3000 generation, when the RTX 3070 did the same versus the $499 RTX 2080 Ti. All of this is true and the prospects for PC graphics seem bleak. At first glance, Nvidia and AMD do not help because of the prices of the products seen so far.
- 00:00:00 introduction
- 00:01:25 News 01: Sony at CES 2023: PS VR2 and Gran Turismo
- 00:15:37 News 02: Nvidia debuts RTX 4000 laptop GPUs and RTX video upscaling at CES
- 00:50:27 News 03: AMD announces new CPUs and discrete RDNA 3 laptop GPUs during CES demonstration
- 01:01:02 News 04: Upcoming OLED TVs will receive a boost in brightness
- 01:06:42 DF Contributors Q1: Can modders add shader precompilation to a game?
- 01:09:09 DF Supporter Q2: Are path trace remakes of classic games feasible on consoles?
- 01:11:22 DF contributor Q3: Would DF produce a video about ray tracing games on the S series?
- 01:12:39 DF Supporter Q4: What do you think DF has done right over the years to survive – and continue to grow?
That’s a pretty damning set of allegations, but while the case against the RTX 4080 is straightforward, the 4070 Ti is more complex. First off, the lack of a Founders Edition card to set prices at $799/£799 is a disappointment – especially considering how oversized the products are and how overpriced many third-party boards are. However, I’m looking at Scan right now, it’s still possible to get the card for the recommended £799 – and I’d still take it over the RTX 3080, which continues to sell for £700 or more if bought new. More memory, DLSS3 and improved efficiency are worth the extra money.
The lack of a game-changing generation-on-gen increase in performance for the money is an issue, but it’s not the first time this has happened: RTX 2080 launched with performance similar to GTX 1080 Ti and no support for their new features for the same $699 . The GTX 980 was cheaper than the outgoing GTX 780 Ti, but out-of-the-box performance wasn’t much better. With the RTX 4070 Ti, we’re looking at two factors here: First, not every generation delivers a gene-on-gen “slam dunk” and value in the same way as the RTX 3000. Second, the economic outlook isn’t generally good – the Prices are rising everywhere – while the situation for semiconductors is particularly problematic.
To get an idea of these issues, look at the cost of the new processing nodes compared to the 7nm nodes used for current-gen consoles 60 percent increase per wafer for 5nm and it gets worse with 3nm, where the wafer price doubles over 7nm. That’s why the Xbox Series S exists. According to our 2020 legacy interview with systems architect Andrew Goossen, over time Microsoft didn’t see a real way to lower the cost of the Xbox Series X and instead produced a console with lesser hardware power consumption. And even with existing 7nm/6nm consoles, Sony has increased prices and Microsoft continues to lose money on every machine it makes – but at least the Xbox team have given us explanations why They made the Series S in the first place. Neither AMD nor Nvidia has spent much time explaining why their products are increasing in price despite sourcing their chips from the same manufacturer – TSMC.
Factoring in the increased cost across the board – and particularly at the core semiconductor level – the 4070 Ti arrives as a kind of “side step”, a replacement for the RTX 3080 if you will. Costs then went up, but what about Nvidia’s profit margin? It’s the perceived “greed factor” that horrifies many. No doubt there will be a healthy margin in the mix as the RTX 4070 Ti was originally the RTX 4080 12GB with a base price of $899. Nvidia kicked off $100 and presumably compensated third-party board manufacturers for discarding their packaging and creating replacement boxes — which can’t have been cheap. Despite this, it’s also hard to believe that the company is still not making decent money from the product. Should Nvidia have cut its profit margin even further?
This is where the market – the gamers – have the final say, and this is the only factor likely to cause a rethink in GPU pricing. If the value isn’t there, the product won’t sell and graphics manufacturers will be forced to cut their margins and offer the card at a discount. It surprises me that almost a week after launch it’s possible to buy an RTX 4070 Ti at base price, which suggests demand isn’t as high as expected. What’s more surprising to me, though, is that over two years after its debut, it’s impossible to buy a brand new RTX 3080 at its launch price of £649 in the UK. Some of that will come from currency fluctuations against the US dollar, but still – remarkably – £699 is the UK base price for an RTX 3080, while used prices remain robust. Will we see cheaper RTX 4070 Ti cards? It seems unlikely in the short term – I would expect there to be some movement on the RTX 4080 where its performance promise made no sense versus the RTX 4090 and even less sense versus the RTX 4070 Ti.
Things may change when groundbreaking competition emerges – and who knows AMD’s RX 7800 XT will deliver – but the stark reality at the moment is that if you bought a GTX 1080 Ti or RTX 2080 for £699 back then, there are only two real alternatives at the same price level: RTX 4070 Ti and RX 7900 XT. Given the choice between the two, the features, RT performance, and perceived lower price of the Nvidia card resonate for me, but those less interested in AI features or ray tracing might prefer the AMD alternative, which in general is quicker to rasterize and one has a lot more memory.
At the moment, the unfortunate reality is that they’ll both cost more than £699 (although 2017’s £699 is over £850 today adjusted for inflation), but on the plus side you’re still getting an improvement in day and night performance (4070 Ti is anything from 2x to 2.7x faster than 1080 Ti based on various rasterization benchmarks), efficiency and features. Today’s xx70 class product is more expensive than any we’ve seen before, but I would rather believe that consumers are making more choices based on best performance for their budget than on a specific product’s name/classification.
One final thought: All of the new GPUs we’ve seen so far are aimed at the high-end enthusiastic gamer. We’ve yet to see where the prices will land for AMD’s and Nvidia’s offerings in the more affordable price brackets. The question, of course, is how far the generation-to-generation price jumps will continue once we break through the $500/£500 barrier. At the moment an RTX 3060 12GB starts at £330 – which is reasonable value – and that’s the target to beat, if not the inevitable 4060 then definitely the 4050.
https://www.eurogamer.net/digitalfoundry-2023-df-direct-weekly-is-next-gen-gpu-pricing-out-of-control DF Direct Weekly: Is next-gen GPU pricing out of control?
