News OEMs Target Miners with RTX 2060 12GB, But Gamers Need It More

[helper800]

The total revenue for the gaming industry is of no importance because of how broad the market is. The console market is currently booming. While the GPU shortage may be negatively impacting PC gaming, it is definitely boosting console gaming. So the gaming industry isn't seeing a drop in revenue, just a shift in where the money is being spent. As far as fab cost increases go, even without Covid and mining, the worthwhile $150 dGPU is pretty much dead. iGPU's have been eating away at the bottom end dGPU market for years. If the market ever returns to "normal," worthwhile entry level dGPU's are going to be creeping up to $200. If the price to produce GPU's doubles or triples, it isn't going to be possible to cover those costs with volume increases of sub $200 GPU's. Prices have to go up, and pretty significantly to cover those costs.

The total revenue is important, in my opinion, because it shows the collective leverage, if push came to shove, that they have over the underlying hardware manufacturers. I do understand what you are trying to say though. Since the games industry is not unified in what hardware they use, any given part of it is weaker than the sum of it potential power. I still see it as a losing hand to ignore the plights of gamers, be it the games industry themselves or the dGPU and iGPU manufactures.

 

[Endymio]

I do not feel like the games industry is so small as to fall into obscurity as I believe you suggested

Don't misrepresent my remarks to make a point. I stated no more than that the gaming industry is not large enough to in itself support the GPU market.[/quote]

How big is the dGPU industry? I do not know. It is not something easy to find data on. It is almost certainly close to or above 100b+ a year though.

Nowhere near that figure. NVidia has a 70% market share, and their entire revenue for 2021 is less than $17B.

 

[Endymio]

Supply and demand has nothing to do with where prices currently are. Miners are simply doing math to determine how much they are willing to pay for cards

Supply and demand, in this situation as in all others, has everything to do with where prices are. A freely floating price always settles at the price point that balances supply with demand. Always.

The point you're missing is that the miners' demand curve is, like all such demand curves, dynamic. As the number of cards devoted to mining increases, the per-card profitability drops. Even were graphics cards given free to miners, demand would not be infinite; their marginal profit analysis would then simply be conducted on the basis of electricity costs alone.

 

[helper800]

Don't misrepresent my remarks to make a point. I stated no more than that the gaming industry is not large enough to in itself support the GPU market.

Nowhere near that figure. NVidia has a 70% market share, and their entire revenue for 2021 is less than $17B.
[/QUOTE]

You said previously, "Rather than this temporary situation, gamers should be more concerned about the inevitable maturation of the GPU industry. The days of selling new games based simply on more triangles/sec are numbered," which implies what I said. I also left room for correction by saying "as I believe you suggested." I am not trying to misrepresent you nor am I trying to eliminate the context of your statement. It has been said by you that the semiconductor industry is growing faster than the games industry can support it, and because of this they "must sell to a wider market." If this trend continues there is the possibility of the games industry "falling into obscurity" as I said before.

For your second point I believe you were only considering consumer dGPUs. When I said the entire dGPU market, I meant consumer and enterprise cards. Since data on consumer dGPUs is available that tends to be all that you see, when in reality their enterprise dGPUs and GPUs (same silicon) bring in at a minimum the same as the consumer graphics market. So its at least 40b in revenue.

 

[spongiemaster]

Supply and demand, in this situation as in all others, has everything to do with where prices are. A freely floating price always settles at the price point that balances supply with demand. Always.

I'm not talking about textbook theory. I'm talking about what we're actually seeing in the current market. If Nvidia decided to stop selling gaming cards tomorrow or instantly doubled their production, then supply and demand would take hold. But neither of those extremes are going to happen. What we're actually seeing is single digit to very low double digit percentage changes in production from quarter to quarter. Those changes in supply whether positive or negative are not having any impact on market pricing. Again, miners are determining their price by profitability predictions. How many GPU's Nvidia can produce has no impact on that calculation. Nvidia can drop their production in half, and miners are still not going to pay any more than their original max price.

The point you're missing is that the miners' demand curve is, like all such demand curves, dynamic. As the number of cards devoted to mining increases, the per-card profitability drops. Even were graphics cards given free to miners, demand would not be infinite; their marginal profit analysis would then simply be conducted on the basis of electricity costs alone.

Doesn't matter. The market price of an Ethereum coin is not directly tide to the mining difficulty. An increase in coin value can offset the loss in card profitability due to mining difficult increases. You need to stop with the infinite anything. I don't care what textbook theory says, only what is realistically possible in the current market.

 

[Endymio]

You said previously, "Rather than this temporary situation, gamers should be more concerned about the inevitable maturation of the GPU industry. The days of selling new games based simply on more triangles/sec are numbered," which implies what I said.

Only if you misunderstood one or more words in my post. My point was that the days of the gaming industry being able to sell games simply by bootstrapping off increased graphical quality are numbered.

For your second point I believe you were only considering consumer dGPUs. When I said the entire dGPU market, I meant consumer and enterprise cards.

My figure included the entirety of NVidia's revenue. Considered strictly in terms of consumer dGPU sales, the figure is less than half that -- it may even be less than 30% of that in recent months.

 

[helper800]

I'm not talking about textbook theory. I'm talking about what we're actually seeing in the current market. If Nvidia decided to stop selling gaming cards tomorrow or instantly doubled their production, then supply and demand would take hold. But neither of those extremes are going to happen. What we're actually seeing is single digit to very low double digit percentage changes in production from quarter to quarter. Those changes in supply whether positive or negative are not having any impact on market pricing. Again, miners are determining their price by profitability predictions. How many GPU's Nvidia can produce has no impact on that calculation. Nvidia can drop their production in half, and miners are still not going to pay any more than their original max price.


Doesn't matter. The market price of an Ethereum coin is not directly tide to the mining difficulty. An increase in coin value can offset the loss in card profitability due to mining difficult increases. You need to stop with the infinite anything. I don't care what textbook theory says, only what is realistically possible in the current market.

You seem to be looking at it from the micro-economic real-world perspective, where as @Endymio seems to be fully focused on the macro economics theory and applying it.

 

[helper800]

Only if you misunderstood one or more words in my post. My point was that the days of the gaming industry being able to sell games simply by bootstrapping off increased graphical quality are numbered.

My figure included the entirety of NVidia's revenue. Considered strictly in terms of consumer dGPU sales, the figure is less than half that -- it may even be less than 30% of that in recent months.

I did not misunderstand any of what you said. I even laid out the logic for you. Your point was effectively the falling into obscurity of the games industry, as I said, because they are reliant on what you just said to continue to differentiate themselves in the games market. Without this, they begin a spiral of ambiguation with no way to differentiate their products from others.

You and not including the entire consumer dGPU and enterprise dGPU (same silicon GPU) market revenue.

 

[Endymio]

I'm not talking about textbook theory. I'm talking about what we're actually seeing in the current market ... Changes in supply whether positive or negative are not having any impact on market pricing. Again, miners are determining their price by profitability predictions.

Sigh, no, no, and no. "Textbook" theory is generated by analysis of decades of market data. And yes, miners determine their price ceiling through marginal profit analysis. But you miss two points. First of all, every miner's analysis is different, at least slightly. Differing assumptions, different costs of electricity, differing tolerance of risk, etc. Collate all those price ceilings and you get a gaussian distribution. When the area under the graph equals total supply, you have an equilibrium price. ANY increase in supply results in a lower price.

The second point you miss is that miners, like all businesses, are revenue-limited in expansion rate. If a miner's marginal profit analysis results in a price of $1200/card and you offer him ten thousand cards at only $1100, he doesn't purchase all 10,000 cards. He purchases until he exhausts his funds available for expansion. Can he borrow additional funds? Sure -- but that changes his marginal analysis ... and the more he borrows, the greater his expenses are, and the less profitable the cards become.

As for the ridiculous assertion that, were producers to cut their production in half without impacting prices, I can't believe you seriously meant to suggest something so obviously inaccurate. There are potential purchasers out there willing to pay far higher prices than what scalpers are presently charging. If you cut supply in half, you service a much smaller segment of the bell curve, and prices rise astronomically.

 

[Endymio]

I did not misunderstand any of what you said. I even laid out the logic for you. Your point was effectively the falling into obscurity of the games industry, as I said, because they are reliant on what you just said to continue to differentiate themselves in the games market. Without this, they begin a spiral of ambiguation with no way to differentiate their products from others.

Word salad. However one chooses to parse it, it's not what I said.

I'll be more clear. Throughout the gaming industry's existence, they've always been able to rely that a major selling point of a new release was that its graphical quality would far exceed that of any game released more than a year or two previously, by simple virtue of the evolution of graphical hardware. That era is ending. The industry will have to evolve accordingly.

 

[Endymio]

You seem to be looking at it from the micro-economic real-world perspective, where as @Endymio seems to be fully focused on the macro economics theory and applying it.

You're confused as to the definitions of these terms. My analysis is textbook micro economics.

 

[helper800]

Word salad. However one chooses to parse it, it's not what I said.

I'll be more clear. Throughout the gaming industry's existence, they've always been able to rely that a major selling point of a new release was that its graphical quality would far exceed that of any game released more than a year or two previously, by simple virtue of the evolution of graphical hardware. That era is ending. The industry will have to evolve accordingly.

That is exactly what I said. I said what I said and left room for you to insert your direct opinion. Instead I was accused on misrepresenting you, which was not the case. Your opinion is as you have said above, evolve or die. I hope for the former rather than the latter.

 

[Endymio]

That is exactly what I said

Yes it is. However, before saying it, you claimed I said something entirely different, that the industry was "doomed to obscurity". In reality, you simply paraphrased my original remark.

 

[helper800]

You're confused as to the definitions of these terms. My analysis is textbook micro economics.

I am not confused, you are just being pedantic.

 

[helper800]

Yes it is. However, before saying it, you claimed I said something entirely different, that the industry was "doomed to obscurity". In reality, you simply paraphrased my original remark.

I said that is what you were implying and gave room to then insert your opinion on the matter. Instead of commenting on the content of what I said you accused me of misrepresenting you. Implication and saying you said something you didn't are two completely different things. Anyways, have a good one.

 

[Endymio]

I am not confused, you are just being pedantic.

I gave a classic microeconomic analysis. You claimed it was a macro analysis. How is correcting that "being pendantic", especially when you were troubling to distinguish between the two?

I said that is what you were implying and gave room to then insert your opinion on the matter.

But I had already given my opinion, and it was nowhere near what you claimed.

 

[spongiemaster]

Sigh, no, no, and no. "Textbook" theory is generated by analysis of decades of market data. And yes, miners determine their price ceiling through marginal profit analysis. But you miss two points. First of all, every miner's analysis is different, at least slightly. Differing assumptions, different costs of electricity, differing tolerance of risk, etc. Collate all those price ceilings and you get a gaussian distribution. When the area under the graph equals total supply, you have an equilibrium price. ANY increase in supply results in a lower price.

The second point you miss is that miners, like all businesses, are revenue-limited in expansion rate. If a miner's marginal profit analysis results in a price of $1200/card and you offer him ten thousand cards at only $1100, he doesn't purchase all 10,000 cards. He purchases until he exhausts his funds available for expansion. Can he borrow additional funds? Sure -- but that changes his marginal analysis ... and the more he borrows, the greater his expenses are, and the less profitable the cards become.

As for the ridiculous assertion that, were producers to cut their production in half without impacting prices, I can't believe you seriously meant to suggest something so obviously inaccurate. There are potential purchasers out there willing to pay far higher prices than what scalpers are presently charging. If you cut supply in half, you service a much smaller segment of the bell curve, and prices rise astronomically.

Are you intentionally misinterpreting/misrepresenting what I said so you can quote your economics 101 textbook? You're not countering any point I was making.

 

[Endymio]

You're not countering any point I was making.

You stated that changes in supply would not influence pricing. I demonstrated why that is not the case. Was there another point you were attempting to make?

 

[-Fran-]

No matter what you all argue about economics, the fact nVidia saw re-launching the RTX 2060 as a 12GB with absolutely no incentive to promote it says all we need to know about the market conditions and nVidia's stance on the subject.

Be it miners, gamers or your dogs, if you're desperate enough you'll still buy it, reasons be damned.

And a point about "market caps"; what nVidia/AMD/Intel make out of "gaming" products is just a fraction of all the money involved in that market. It's like saying the automobile industry's market cap is what Ford/Toyota makes in a year because they're the top seller. There's way more to the "gaming" market than the hardware. While cryptos are soaring due to reasons, the gaming market is bigger still due to just how much money it moves around. Keep in mind EA is about $35B alone. That's a lot of microtransactions that depend on people's hardware running the games they produce. Not that they need to make games that run on the latest and greatest, but there's always a balance to strike. If people can't run their games or have no incentive to move onto "the next big AAA game", then they'll definitely have a word with hardware manufacturers (as they already do). It is all interwined, specially since Publishers are pushing Dev houses to capitalize on NFTs and I'm sure they'll try to capitalize on Crypto soon.

Regards.

 

[King_V]

Incorrect. The point you fail to grasp is that the price manufacturers need to set to balance supply and demand is lower than that extractable via scalping, as manufacturers service both ends of a "bell curve" gaussian distribution, whereas scalpers service only one. Scalper transactions additionally have a certain amount of deadweight loss which is avoidable in a direct transaction. Thus, the price manufacturers would be required to charge to balance supply and demand would be significantly lower .

Balderdash . . or, basically, you're asking us to believe a fantasy.

• A "balanced price" set by the manufacturers would have to be at or very near what the current market allows the scalper price to be, otherwise, by your own definition, it wouldn't be "balanced."
• This claim of "deadweight loss" for scalpers is an absurd exaggeration. You're starting from the conclusion you want, and trying to come up with (flawed) reasoning to support that conclusion.

 

[Endymio]

There's way more to the "gaming" market than the hardware.

Yes, but hardware research, development, and production costs can only be supported by hardware sales. Not from the other sources you cite.

 

[Endymio]

a "balanced price" set by the manufacturers would have to be at or very near what the current market allows the scalper price to be, otherwise, by your own definition, it wouldn't be "balanced."

You haven't read carefully. Floating prices balance supply and demand. A price set by the manufacturer can act against the the entire market, whereas a scalper's price works only against those unable to get a card directly.

This claim of "deadweight loss" for scalpers is an absurd exaggeration.

You seriously cannot be attempting to refute such a basic point. Every middleman between producer and end-user adds a certain overhead to the process. Scalpers have overhead also, even if no more than one additional shipping cost, along with some slight additional expectation of risk.

 

[-Fran-]

Yes, but hardware research, development, and production costs can only be supported by hardware sales. Not from the other sources you cite.

What does that have to do with the "gaming market cap"?

Also, keep in mind nVidia does have GeForce Now, so not quite. At least nVidia taps more into the services and software side than AMD and Intel, so there's that as well. No idea about sizes, but kind of invalidates your rebuttal. More to the point, nVidia and AMD have active programs that involve Developers using their specific hardware solutions, so even more interwined with how big the gaming industry is. You can argue all you want about what % it is for them, but it's not insignificant (specially for nVidia) to ignore and let someone else profit out of it. Same with the mining market cap. There's way more than just Bitcoin and Etherium.

Regards.

 

[Endymio]

What does that have to do with the "gaming market cap"?

Absolutely nothing. That was my point.: the prior poster was using an inapplicable figure. When discussing the ecosystem necessary to support hardware development, it is the size of the gpu market which matters, not the entire gaming market.

No idea about sizes, but kind of invalidates your rebuttal....You can argue all you want about what % it is for them, but it's not insignificant

Only if you incorrectly assume my rebuttal was that the gaming market was "insignificant". It obviously is not. It's merely no longer large enough to exclusvely support the entire gpu industry.

 

[-Fran-]

Absolutely nothing. That was my point.: the prior poster was using an inapplicable figure. When discussing the ecosystem necessary to support hardware development, it is the size of the gpu market which matters, not the entire gaming market.

Only if you incorrectly assume my rebuttal was that the gaming market was "insignificant". It obviously is not. It's merely no longer large enough to exclusvely support the entire gpu industry.

Fair points and I do agree to a big extent. Seems like the point of contention was how significant it was vs the other types of income for nVidia/AMD/Intel the GPU market (total cap: pro, gaming, AI, HPC and... mining? XD) is. We can only speculate here, so...

What I can say though, and this is not a trivial point to make, looks like the "gaming GPU market" is big enough that Intel has finally gone all in. Sure, it's also for HPC and the other markets, but they could have chosen to just skip it entirely, but they're not. That does tell you something about it: it is big enough to actually spend the shekles for R&D.

Regards.