GPU makers have been riding a cryptocurrency-led rally for several years now and it’s starting to get ugly. Gamers have been overlooked in recent years as graphics card MSRPs became a figment of the imagination and actual retail prices existed in multiples; and it looks like they are about to get their comeuppance. The first-hand GPU market saw its biggest quarterly slump since the 2009 financial crisis, something that shows how MSRP is detaching itself from market forces.
The cryptocurrency-led Roaring 20s is really over for the new GPU market and NVIDIA, AMD, Intel should pay attention
The GPU crash appears to have particularly affected AMD, with NVIDIA also eating some of the damage (but likely protected by robust RTX 4090 sales) and Intel coming out as the winners (with the least exposure to the discrete GPU market). Here are the gory details:
- Information: Market share increased by 10.3 percentage points, shipments increased by 4.7%.
- AMDs: Market share decreased by 8.5 percentage points, shipments decreased by 47.6%.
- Nvidia: Market share decreased by 1.87 percentage points, shipments decreased by 19.7%.
Overall, the market for discrete GPUs (add-in cards) was down 33% and overall GPU shipping units were down 10.3% quarter over quarter.
“All companies have given different and sometimes similar reasons for the downturn: the halting of cryptocurrency mining, headwinds from China’s zero-tolerance rules and rolling shutdowns, sanctions from the US, user plight from the race to buys during Covid, the Osborne effect on AMD as gamers wait for new AIBs, inflation and higher AIB prices, excess stock depletion and a bad moon tonight…Overall, the feeling is that Q4 shipments will be down, but ASPs will be up, supply will be fine, and everyone will have a happy holiday,” – Jon Peddie
- Overall GPU link speed (which includes integrated and discrete GPUs, desktops, notebooks and workstations) to PCs for the quarter was 115%, down -6.0% from last quarter.
- The overall PC CPU market declined -5.7% quarter-over-quarter and decreased -18.6% year-over-year.
- Desktop add-in graphics cards (AIBs using discrete GPUs) were down -33.5% from last quarter.
- This quarter saw a 0.5% change in tablet shipments compared to last quarter.
Source: Jon Peddie research
While the first-hand GPU market may be collapsing, the second-hand GPU market is alive and booming as mining GPUs flood the market, driving average selling prices of previous generation cards down to extremely attractive numbers. for dollar benefits. For example, you can use a pre-mined RTX 3080 Ti for $481 and an RTX 3070 Ti for just $202.
The RTX 4080 meanwhile starts at $1200, and the RTX 4090 will set users back $1600. While these MSRPs would have been perfectly reasonable in the crypto boom days, gamers are no longer able to stomach them for the most part ( the RTX 4090 is actually good enough for consumers who want the absolute best without looking at the price but the RTX 4080 is feeling the effects of stagnant demand).
Speaking from a supply and demand perspective, there are a ton of GPUs out there that can offer very decent performance per dollar to gamers – which is the audience that has always been hanging around major IHVs – so there’s no really need to upgrade to extremely expensive GPUs. Technologies like DLSS 3.0 and FSR 3.0 are working to offer a killer app (Frame Generation etc) which could encourage consumers to cross that bridge but its reach is quite limited as DLSS 2.0 and FSR 1.0/2.0 based alternatives I’m not far behind.
This ties in nicely with the advisory we’ve been issuing over and over that NVIDIA, AMD, and Intel can either wait for the wave of cheap GPUs on the market to end or lower their MSRPs a bit to make their products more competitive with the used wider. market.