Key Takeaways
1. Rising system memory prices are affecting not just memory modules but also graphics cards (GPUs) due to their dependence on VRAM.
2. Nvidia’s suggested retail prices (MSRP) are unreliable, as actual sales prices often do not reflect these recommendations.
3. Nvidia’s pricing strategy with board partners allows them to transfer increased costs from rising RAM prices to consumers without changing the MSRP.
4. The end of Nvidia’s Observed Pricing Program (OPP) has made it harder for manufacturers to sell GPUs at MSRP, impacting profitability.
5. The shift in focus towards high-end models may lead to reduced availability and increased prices for budget graphics cards.
System memory prices have been rising, which isn’t shocking anymore. However, the so-called RAR crisis is affecting more than just memory modules; it also impacts other parts like graphics cards. This seems reasonable since GPUs depend on RAM, or more specifically, VRAM. In a recent video, German hardware YouTuber der8auer reveals that the recent spike in GPU prices is more complicated than it seems. Titled “Die Nvidia UVP-Lüge” (“The Nvidia MSRP Lie”), he claims that Nvidia’s suggested retail prices are no longer a good guide. Although they promote their entry-level prices, these are seldom seen in actual sales.
Internal Pricing Issues
Der8auer, who is known for his hardware reviews and overclocking content, has over half a million subscribers on YouTube. He points out a significant problem with Nvidia’s MSRP, which lies in its pricing strategy with board partners. Typically, GPUs and VRAM are sold together, so when RAM prices rise, it directly affects what the manufacturers have to pay. This setup helps Nvidia keep its profit margins intact while transferring cost increases to the downstream without officially changing the MSRP. Consequently, board partners take on these extra costs and often pass them along to consumers when they sell the products.
The End of the OPP Program
For a long time, Nvidia’s OPP (Observed Pricing Program) was crucial in keeping graphics card pricing close to the suggested MSRP. Under this program, manufacturers received financial incentives when they sold cards at the recommended price. Der8auer explains that many models would not be profitable without this support. However, now that the program is gone, achieving the MSRP has become even more difficult. While the suggested price still exists in theory, selling at that price is rarely beneficial for retailers. Because of this, der8auer warns that manufacturers might increasingly concentrate on high-end models since lower-tier cards are no longer profitable without subsidies. This change could lead to reduced availability in the budget category and drive prices even higher.
der8auer via YouTube
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