One of the problems with graphics card manufacturers is that they are out of touch with reality, because they don’t want to admit, due to some weird complex, that their biggest buyers aren’t dedicated professionals, but are devices for playful utility. Although they can be used in some markets, sacrificing the PC gaming market to customers with more capital is a mistake. And it is that many users are already making the leap to consoles as a reaction to the bad policies of NVIDIA and AMD with the price of their graphics cards.
PlayStation, Xbox and Nintendo are selling below the real price
Video game consoles are often sold at a “loss” because they make money from gaming royalties. That is, for every game we buy, whether in physical format or purchased online. This allows the price of the video game console to be much lower. The level of subsidy on the real price? Well, it depends on the material, but we can count between 100$ and 200$, even if we don’t really know the exact figure.
Of course, a video game console includes more things than a graphics card, among other things it must be taken into account that a console is a complete computer, while a graphics card is not. Although the latter have larger GPU chips and performance capability. If we take into account the rest of the elements that a console has and not a graphics card, then the difference in cost ends up being compensated and the dedicated video game system ends up having a higher cost for the manufacturer and that’s where that we get in the big problem. . In other words, greed breaks the bag.
Why are the price of graphics cards so high?
In the price of graphics cards, several participants end up affecting their final cost.
- On the one hand, the designers that are AMD, Intel or NVIDIA. They design the chip, but do not manufacture it.
- The foundry or chip factory, which can be TSMC, Samsung, and even Intel. What they do is make the chip and sell it to the designer.
- The graphics memory provider.
- The card assembler, which are brands like ASUS, GIGABYTE, etc. Who are responsible for mounting the graphics card with all its components.
Each of them and not counting wholesalers and retailers, must take their share of the share and it will not be exactly small. The problem is that NVIDIA, Intel or AMD do not sell you the graphics card, but rather sell the components to assemble it to assemblers, so there is an additional overhead. Suppose we are ASUS and we want to build an RTX 4070, because NVIDIA is going to sell us a PCB that will include the GPU and VRAM at whatever price they want.
Simply put, when you buy a GeForce or Radeon, you pay for the brand of graphics card, except for things like NVIDIA’s Founder Edition. If you add to that that neither party has the ability to subsidize the hardware like it happens in consoles, it’s normal for the cost to go up.
The dark secret of console prices
So far good, but hardware funding through games and services is not the only secret behind video game consoles, but the fact that the cost structure is different. If you think about it, console makers should be the equivalent of assemblers, but what happens is they’re paying for an exclusive design, for which AMD or NVIDIA or AMD will take a royalty per unit sold, but it will be their own console builder asking to build the chip.
Let’s see, a comparison with the real world:
- The chip designer would be the architect.
- The GPU and memory makers would be the builders and contractors.
- The final assembler would be responsible for putting the finishing touches on and selling the house.
The difference would be that in the consoles the architect sells the plans to the manufacturer of the console and he takes care of hiring the people to build the house. On the other hand, in PC we have that the architect is also a manufacturer and sells the components of the graphics card to the assembler. Causing a huge increase in the final price of it.
The trick to driving up the price of graphics cards
It can take days, weeks, or even months for a store to sell a graphics card, but until it sells, it will continue to be a liability to their accounts. What happens when two generations of graphics cards coincide in time and you can’t reduce the price of the old one? Well, whoever is younger is going to have a much higher price due to their performance, which sets a dangerous precedent.
Quite simply, there is a lack of control between the launch of new models and what exists in the market, which serves as a ruse to launch more and more expensive hardware. The problem is that this is a ruse to keep the price of graphics cards as high as possible and we must not forget that the end user has purchasing power and video game consoles compete the interest of the end user. They are not the best products, but the public does not go every weekend to the most expensive restaurant in the city and it is not for nothing.
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