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Nvidia won, we all lost

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977 points todsacerdoti | 6 comments | | HN request time: 1.492s | source | bottom
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strictnein ◴[] No.44469082[source]
This really makes no sense:

> This in turn sparked rumors about NVIDIA purposefully keeping stock low to make it look like the cards are in high demand to drive prices. And sure enough, on secondary markets, the cards go way above MSRP

Nvidia doesn't earn more money when cards are sold above MSRP, but they get almost all the hate for it. Why would they set themselves up for that?

Scalpers are a retail wide problem. Acting like Nvidia has the insight or ability to prevent them is just silly. People may not believe this, but retailers hate it as well and spend millions of dollars trying to combat it. They would have sold the product either way, but scalping results in the retailer's customers being mad and becoming some other company's customers, which are both major negatives.

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kbolino ◴[] No.44469212[source]
Scalping and MSRP-baiting have been around for far too many years for nVidia to claim innocence. The death of EVGA's GPU line also revealed that nVidia holds most of the cards in the relationship with its "partners". Sure, Micro Center and Amazon can only do so much, and nVidia isn't a retailer, but they know what's going on and their behavior shows that they actually like this situation.
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amatecha ◴[] No.44470514[source]
Yeah wait, what happened with EVGA? (guess I can search it up, of course) I was browsing gaming PC hardware recently and noticed none of the GPUs were from EVGA .. I used to buy their cards because they had such a good warranty policy (in my experience)... :\
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izacus ◴[] No.44470590[source]
EVGA was angry because nVidia wouldn't pay them for attempts at scalping which failed.
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kbolino ◴[] No.44473088[source]
I've never seen this accusation before. I want to give the benefit of the doubt but I suspect it's confusing scalping with MSRP-baiting.

It's important to note that nVidia mostly doesn't sell or even make finished consumer-grade GPUs. They own and develop the IP cores, and they contract with TSMC and others to make the chips, and they do make limited runs of "Founders Edition" cards, but most cards that are available to consumers undergo final assembly and retail boxing according to the specs of the partner -- ASUS, GIGABYTE, MSI, formerly EVGA, etc.

MSRP-baiting is what happens when nVidia sets the MSRP without consulting any of its partners and then those partners go and assemble the graphics cards and have to charge more than that to make a reasonable profit. This has been going on for many GPU generations now, but it's not scalping. We can question why this "partnership" model even exists in the first place, since these middlemen offer very little unique value vs any of their competitors anymore, but again nVidia has the upper hand here and thus the lion's share of the blame.

Scalping is when somebody who's ostensibly outside of the industry buys up a bunch of GPUs at retail prices, causing a supply shortage, so that they can resell the cards at higher prices. While nVidia doesn't have direct control over this (though I wouldn't be too surprised if it came out that there was some insider involvement), they also never do very much to address it either. Getting all the hate for this without directly reaping the monetary benefit sounds irrational at first, but artificial scarcity and luxury goods mentality are real business tactics.

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izacus ◴[] No.44475158[source]
Then you didn't follow the situation, since majority of EVGA anger was because nVidia wouldn't buy back their chips after EVGA failed to sell cards at hugely inflated price point.

Then they tried to weaponize PR to beat nVidia into buying back their unsold cores they thought they'll massively profit off with inflated crypto hype prices.

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1. kbolino ◴[] No.44475383[source]
Ok, this seems to be based entirely on speculation. It could very well be accurate but there's no statements I can find from either nVidia or EVGA corroborating it. Since it's done by the manufacturer themselves, it's more like gouging rather than scalping.

But more to the point, there's still a trail of blame going back to nVidia here. If EVGA could buy the cores at an inflated price, then nVidia should have raised its advertised MSRP to match. The reason I call it MSRP-baiting is not because I care about EVGA or any of these other rent-seekers, it's because it's a calculated lie weaponized against the consumer.

As I kind of implied already, it's probably for the best if this "partner" arrangement ends. There's no good reason nVidia can't sell all of its desktop GPUs directly to the consumer. EVGA may have bet big and lost from their own folly, but everybody else was in on it too (except video gamers, who got shafted).

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2. Tijdreiziger ◴[] No.44476170[source]
NVIDIA doesn’t make a lot of finished cards for the same reason Intel doesn’t make a lot of motherboards, presumably.
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3. kbolino ◴[] No.44476790[source]
Maybe, but that's not a great analogy. The standardized, user-accessible sockets mean many different CPUs can be paired with many different motherboards. There's also a wide variety of sizes and features in motherboards, plus they have buses for connecting various kinds of peripherals. GPUs have none of this flexibility or extensibility.
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4. Tijdreiziger ◴[] No.44484276{3}[source]
Yeah, but you’re missing the specialization angle.

NVIDIA and Intel as companies are specialized in the design (and in the latter case, manufacturing) of chips. Board OEMs are specialized in making a consumer-ready product, maintaining worldwide sales and distribution channels, and consumer relations.

Of course, it wouldn’t be impossible for NVIDIA to start doing these things on their own (see Apple, who designs chips, designs computers around those chips, and operates retail stores where those computers are sold), but presumably NVIDIA prefers the current arrangement, where they can just focus on the chips and leave the rest to OEMs.

See also Intel under Gelsinger, who sold off the NUC and server lines (finished products) to focus on the core business (x86 chips).

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5. kbolino ◴[] No.44485576{4}[source]
Ironically, Intel's GPU business seems to be entirely in-house. Though maybe it too will get spun off in whole or in part.

As far as nVidia is concerned, they lost the privilege to be treated like a small fabless startup. They are regularly ranked as the highest valued company on the U.S. stock market. They clearly can make and sell the whole card themselves, so having GIGABYTE, ASUS, and co. hang around and take the heat for their business decisions feels pretty scummy. It's also clearly bad for the consumer, as Founders Edition cards actually do sell for MSRP. This partner crap is all an obsolete relic of a bygone era, being drawn out well past its prime.

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6. Tijdreiziger ◴[] No.44486463{5}[source]
They can, but do they care to?

They’re making an overwhelming share of their revenue on ‘data center’, so I doubt they’re desperate to shake up their gaming business.