Nvidia's RTX 4090 is about to be launched. The company revealed this today at the GeForce Beyond event at GTC 2022. It promises two to four times the performance of the RTX 3090 Ti, which will make it one of the biggest performance leaps we’ve seen between generations.
price increase offset performance improvement
In the past, newer GPU has better results than older GPUs, at least if you're just comparing MSRP. You can usually expect 30% or more performance per dollar for each new generation, and some products are worth 50% or even 70% more than the previous generation. For example, the GTX 1080 Ti is about 70% faster than the GTX 980 Ti and is only about $50 more expensive; the huge value of the 1080 Ti is one of the reasons it became the legendary Nvidia GPU. However, it is clear that Nvidia does not provide intergenerational value improvements as it did in the past. We saw it in the RTX 20 series and in the RTX 30 series, which is just a partial improvement to its predecessor. The
RTX 40 series is no exception. Even though we take Nvidia's own numbers as face value (the lower limit of that range anyway), the RTX 4080 16GB is about twice as good as the RTX 3080, but the price is almost doubled. In fact, the 16GB 4080 needs to be 2.3 times faster than the 3080 to get a cost-effective performance of more than 30%. Of course, the 40 Series has better ray tracing performance and more Tensor cores than the 30 Series, but we still haven’t reached the point where that technology really becomes standard.
There are other reasons to care about the price even if it is worth the money. First, the cheapest RTX 40 card released is the RTX 4080 12GB, which has less memory and core than the RTX 4080 16GB. It really should be called the RTX 4070, but maybe Nvidia doesn't want to call it that, as it costs $899, even higher than the RTX 3080. It’s obvious that these GPUs are unaffordable for the vast majority of people, even those who have ever purchased Nvidia flagships like the 1080 Ti.
Of course, Nvidia will launch a lower-priced low-end GPU, which reminds me of the second point. Because we can see how expensive the high-end 40 series models are, it's hard to see Nvidia not raising the price of the entire stack. Typically, we only see that prices between each GPU in the entire product stack may be only $50 to $100, so it seems unlikely that the RTX 4070 will be launched at $499 like the RTX 3070. Instead, we may see the MSRP of the 4070 at $699 or more. Will there be a 40 Series card for less than $300?
Nvidia wants to eat cake and also want to own it
In addition to Nvidia wants to increase its profit margins and profits, the high price tag of the RTX 40 series may also be driven by the oversupply of 30 series graphics cards on the market, especially high-end graphics cards from RTX 3080 to RTX 3090 Ti. The prices of these cards have been falling due to lower demand, which is not good for Nvidia's profits. If Nvidia lowers pricing for the RTX 40 series, that could push the price of its old flagship even further.
This is a problem with Nvidia, and in the past when Nvidia or AMD made too many GPUs, they had to pack it up. For example, after the launch of the RTX 20 series, Nvidia enjoyed a record quarter of revenue and profit, and subsequently caused a year-long downturn as there was still an oversupply of GTX 10 series cards on the market.
Nvidia may be very clear about this and don't want it to happen again (though in fact it's responsible for making too many GPUs in the first place), so the company's solution is simple and consumers will have to pay more for the new RTX 40 series cards or buy an old RTX 30 series cards at a price that is still higher than they should be. Given that the world is not entirely in a boom period, this is certainly a bold stance.
For Nvidia, this is actually only one of two ways. In one case, Nvidia got what it wanted, and everyone accepted the price of the RTX 30 and 40 series GPUs.Nvidia does not have to bear losses or lower than expected profits for the RTX 30, and the RTX 40 sells a high margin. In another case, people are hesitant about prices and sales of new and old cards are barely at the level they need, which is worse than if Nvidia allowed prices to fall to increase demand.
We also cannot forget AMD, which will release its RX 7000 series GPU on November 3. AMD has been following Nvidia's price increase in recent years. The next-generation RX 7000 series adopts TSMC's cutting-edge and expensive 5nm process, which is almost the same as the 4nm process used by TSMC's RTX 40 series. AMD has every reason not to price the RX 7000 particularly competitively, so Nvidia might consider its strategy fairly safe. However, it does have the ability to price the RX 7000 at a competitive price if AMD wants to, and doing so will be disastrous for Nvidia. Setting such a high price is certainly risky in many ways.
is disappointing but predictable
Personally, I'm not surprised by the price of Nvidia's new GPU. In August, I detailed the deterioration of CPUs, especially GPUs, in terms of value improvements every year, and that it is not just because of COVID or supply shortages. The RTX 40 series is just the next step in the multi-year trend.
This trend is likely to continue in the next few years, and it may really hurt the tabletop game. We always see reports that desktops are dying and the show is over, and those reports are always wrong in the end.
