Why Do Graphics Cards Cost So Much?

Tamor writes "As an avid PC games player I'm locked into the perpetual hardware upgrade cycle like everyone else, but one thing really irks me. While other hardware has come down in price, graphics card pricing has spiralled beyond belief. Not only are graphics cards usually the single most expensive item in a gaming PC, they don't seem to be subject to the usual market forces. Instead of new generation cards forcing down the price of old cards, the old cards are simply phased out, and the likes of nVidia have a range wide enough to keep the high-end cards at the same prices for the forseeable future.

Why is this? Why does a top of the range graphics card cost so much more than an entire PS2 or X-Box system? Is it the lack of competition in the market following the demise of 3DFX or are there other forces at work. What do slashdotters thing about this pricing?"

Comments

not true...

[dotgod]

of new generation cards forcing down the price of old cards, the old cards are simply phased out

Wrong...check out PriceWatch. You can still get old stuff from some suppliers for a decent price. For example, there's a GF3 TI200 for 70 bucks and A GF2 TI for 50 bucks. Even the prices on some of the newer GF4's are reasonable.

Because people pay for them. : )

[nelsonal]

They cost significantly more to manufacture than the graphics subsystems in a console, for several reasons. First, due to lower sales figures. I have seen some market share data that suggested that high end cards (priced above 300 USD) have less than 1% of the market, but I don't know if that is revenue or units, if its units that is only about 1 million chips/year, its even less if dollars. One design will go into many consoles (Sony recently announced that sales of PS 2s reached 40 million) over a very long period of time, so you can spread your fixed costs over quite a few more chips. Also, consoles are used at very low resolutions so they are not at technically rigorus as PC cards. I think the XBox video system is similar in fill rates to a Gforce 4 MX, but has better AA. Even a three year old card will play new games pretty well at 640x480. The cards do have pretty rigorous AA especially the X-Box.
Finally, Sony and Microsoft are bigger buyers than you and I are, and they get lower prices for buying in volume.

Ask Slashdot == Crackhead Form

[bellings]

What do slashdotters thing about this pricing?

Frankly, I think that you are smoking waaaaay too much crack.

The price on the high end of the consumer market has slowly crept up in the last five years, from about $200 for the top-of-the-line 3dfx Voodoo when it came out, to about $300 for the top-of-the-line nVidia GForce 4 today.

But on the low end, the prices are as cheap as ever, while the performance on the low end is simply incredible. A GeForce4MX for $75 today is going to be faster than the best $250 card you could buy two years ago.

There are two reason why you can't walk into BestBuy and get an old TNT2 Ultra for $35. First, because just handling quality control and returns makes it not worth their time to sell you a card that cheap. Second, because despite the fact that the TNT2 was fair to decent two years ago, it is just butt-slow by comparison today. The only people buying boxed 3D cards are gamers, and they're just too smart to do something that stupid.

If you want to see how performance has improved in the last few years, check out this Tom's Hardware guide to VGA cards. And you're asking why someone wouldn't sell you one of the cards near the bottom of the chart? The question you should be asking is what kind of moron would be stupid enough to buy one of them?

nForce

[Apreche]

Graphics cards are expensive because they don't sell in large quantities. The supply of high-end video cards is low so price is high. The supply is low because demand is low. Very few people other than a few gamers per town has a geforce 4. Most people with dells and gateways have whatever old card comes in there. And a whole crapload of pre-built machines come with on-board video. And for the needs of the vast majority of people a TNT2 is more than they will ever need.

My current PC is a Pentium III 450mhz with a TNT2 32MB video card. I bought this machine when the TNT2 first came out. There have been 4 geforce cards since then. And the only games that don't run on my computer are the new UT and America's Army. Every other 3D game runs just fine on my machine.
I plan to buy a new PC soon. So I can encode movies faster and play Doom3. But I'm probably going to buy a motherboard that has the nforce2 chipset. Sure it's a crummy built in video card. But it's a geForce 4 built in. Even though the board probably wont be as fast as a KT400 with DDR400 and a video card in the AGP slot, it's a deal you can't beat. Motherboard, sound card, ethernet card, and video card for the price of just a motherboard. I probably wont use the built in sound card often, but all the operating systems I use fully support having 2 sound cards and using them simultanously, so I dont' see where I can go wrong.
To read more about the nforce2 chipset check out
Nvida or
anandtech

It wont make the fastest gaming machine, but it will still make a good enough one, for a low low price.

Look at what goes into it

[Raetsel]

First, the (GeForce 4 Ti | Radeon 9700 | Matrox Parhelia) chip is very complex. The Pentium 4 has about 55 million transistors on it. Compare that with (approximate numbers, of course):

• 63 Million -- (GeForce 4 Ti)
• 80 Million -- (Parhelia)
• 110 Million -- (Radeon 9700)

Damn hard chips to make, even if they're not running at GHz speeds.

Now, about that memory... It's at least DDR in most cases (like my GeForce 4 Ti 4200), and runs at much higher speeds than motherboard RAM. 300 MHz (actual!), or "600 MHz DDR" in some cases. That's special stuff -- and expensive.

You're putting 128 MB of that on an add-in card, as much memory for video as I had in my entire computer last year! (Damn...)

Now, about those prices. A mid-range P-4 (2.4 GHz, 133 MHz QDR FSB) runs about $190. Top-of-the-line DDR memory isn't that bad, figure $75 for that part.

190 + 75 = $ 265

No, I don't think modern video card prices are out of line. As (enthusiasts | gamers) we're on the cutting edge, and it costs to be there.

The scary part is that I'm very seriously considering an All-in-Wonder Radeon 9700 for the new computer I'm building my wife. I keep waiting to see what becomes of nVidia's NV30... but if I don't see anything by early December, I'm going with ATI.

God, I'm a nut. Oh well, it drives the economy.

Re:Look at what goes into it

[lewp]

You won't be seeing the NV30 until next spring. Last I heard there were (NVIDIA acknowledged) problems with moving to the smaller manufacturing process on the new chip and they are/were getting pretty low yields. ATI made a smart decision (or perhaps just got lucky with timing on their release) by putting this off until the 9700 was out. Now they've got the top dog and plenty of time to milk it while at the same time preparing to make a similar process change on their next part.

Most are predicting that even when it arrives the NV30 won't be a compelling upgrade over a Radeon 9700. Add in the fact that by the time it comes out ATI should have no problem bringing out a refresh of the 9700 that would at least keep it dead even with NV30 and ATI is sitting pretty.

This isn't anything too bad or unexpected, though. The same thing happened to Intel for a while. They ran out of steam on the P3 and had to take a back seat performance-wise to the Athlon while they worked on getting their next gen part out. Now they've got the P4 that seems like it can scale to the moon and the current Athlon (XP|MP) series seems to be almost tapped out.

You should just go ahead and get the Radeon if you're going to be upgrading or building a new system anytime soon. Besides, using your wallet to establish a true competitor to NVIDIA in the high end gaming arena (something they haven't had since well before the end of 3dfx) could only be a good thing down the road. We'll see more and faster innovation (perhaps part of the reason NVIDIA slipped from its legendary 6mo product cycle because it was too cocky in its dominance) and perhaps even lower prices.

Re:Are you looking hard enough?

[IpalindromeI]

GeForce2 MX200 32MB for $60? Please tell me you're joking. I can get a GeForce2 Ti 64MB for ten bucks less than that right now. Your "local little chain store" is eating your wallet for a lunch.

Re:Because people pay for them. : )

[FortKnox]

Geez... why is this only score:3?

Basic economics, here. Supply and Demand.

You're ticked that it costs so much, but you own one, right?

There's your answer.

Re:Are you looking hard enough?

[Chanc_Gorkon]

Local chain store eating your wallet? I don't think so. I actualy sat and figured out the cost of buying a part from a place on pricewatch and from Compusa.....guess what? They were about the same by the time you add shipping.

I always buy the boxed product mostly because sometimes the boxed product has some perks with it. Sure, it may be an old game or something, but it's still a perk. Plus I have never felt that comfortable buying a board in a bag from joe blows computer store in a town I have never heard of. Also, if you never spend a dime at CompUSA or any other local computer store, they will eventually pack it in if enough people do it. Then when your in a dire need and can't wait for a product to ship they are not there. I almost never buy any computer part mail order. I personally like sinking my dollar as much as I can anyway into places that are here. It's kind of my insurance that I have a nice store locally that I can go to any time instead of having to wait for a part or item to get to me. I personally also HATE having to wait when I know I ma getting a new toy. I have waited long enough in some cases why should I wait longer? :)

Re:hmmm

[Anonymous Coward]

You're mixing £ and $, dude.

Do you want to live in a society where you have to measure your money in pounds?

Graphics cards aren't too expensive

[WIAKywbfatw]

There is more silicon on an average graphics card nowadays (and has been for the last five years) than there is on the average CPU - comparing the price of the two it's clear that if anything, graphics cards are comparitively underpriced, not overpriced.

The original poster seems to have made several assumptions and ignored a few basic truths.

First of all, consoles are of fixed specification - today's PS2s are no more or no less powerful than the first units that shipped over two years ago. This lack of development gives the console makers three advantages:

1. No further research and development costs.

Develop a single product one year, reap the
benefits for the next five. Try doing that with a graphics chipset. Five years ago, the 3dfx Voodoo chipset was the hottest thing out there; seen any system builders using that graphics engine recently?

Even the R&D costs for the graphics engine isn't something that the console makers truly have to worry about, as those are borne by the chipset manufacturers - who then fall over each other trying to secure supply agreements with Sony, etc.

2. Better fabrication and higher yields lead to lower costs.

Over time, graphics chips (and all other silicon) becomes cheaper to make, thanks to better fab plants and higher yields. A factory that initially churns out x chips a month might well be churning out 10x chips a month a year down the line, and at little extra cost. A newer factory will improve on that too.

3. The console makers don't have to worry about compatibility issues.

Every product that's aimed at the PC market space has to be thoroughly tested with a wide range of hardware and software to make sure that it works error-free. They will even need third party approval before they can ship (Microsoft Windows approved certification, FCC, CE testing, etc). Graphics cards are no exception to this rule.

Additionally, consoles are a lot easier to support.

If FIFA 2003 doesn't work in your PS2, then either your CD is faulty or your machine is, and it's not going to take more than five minutes to work out which is the problem. But if FIFA 2003 doesn't work out of the box on your PC then you've got a whole lot of work ahead of you before you can safely say what's at fault. Grahpics card (and other hardware and software) manufacturers have to support users in this situation - Sony, etc do not. Support costs money.

Also, early adoption has its price. Buy a PS2 as soon as it's launched and you know that it will cost you more than it would a year or even six months later. The same is true of state of the art graphics cards. PS2s cost less than half of what they did originally. But so do the graphics cards that shipped at the same time as the PS2 was launched.

Lastly, graphics card manufacturers have to turn a profit on every card they make. Console manufacturers don't have that issue - they'll happily loose money on the hardware and make it back on the software you'll be buying.

If you buy FIFA 2003 on the PC then EA makes money but nVidia, ATi, etc do not. If you buy FIFA 2003 on the PS2 then Sony, the people who make the console but don't make the game, do make a profit. It's a entirely different business model - something that you've failed to appreciate.