GRAPHICS OUTLOOK

US $100Given the huge bubble in digital coins the number of surplus graphics cards will mean AMD and NVIDIA will find price erosion will be an issue for quite some time to come.

We reported earlier about lots of 10 or more video cards from digital coin miners who have abandoned the efforts with prices down in some cases by as much as 90% over the last 12 months.

Now with a flood of video cards pouring into the resale market this will pressure prices down rapidly. Others will abandon efforts to sell after regretting the loss of capital. Many do not want to sell at very low prices. Unsold cards will simply continue to erode in value looking forward.

Unsold new inventory is an even more difficult problem for the channel where unsold cards are being returned to their respective manufacturers. There are a lot of unsold video cards ranging from the GT 210 and above. The GT 210 with 16 CUDA cores is now below integrated graphics making them almost unsellable as they cannot handle 3820×2160 with the DisplayPort interface.

Extreme cards are a very thin segment of the video card market. For every extreme card sold, about 100 entry level cards are sold. The traffic on our GT 710 games page is a good example of the market realities. The page is one of the most visited here. The GT 710 sells for under $50.

The $50-$100 segment is populated by cards like the GT 720 and GT 730. This is the most hotly contest market segment.

Cards like out GTX 750 originally were in the $100-$150 market segment which is hotly contested by both AMD and nVidia. While fewer cards are sold in this segment compared to the GT 710, the $100-$150 is still a major segment.

Cards like out GTX 260, GTX 660 Ti and RX 470 are all from a much higher price point in the market. These cards are very expensive and while there is a lot of media attention, reality is that most cannot afford such extreme cards. The GTX 260 was over $400 new and the GTX 660 Ti was over $350 new. This is why we focus on the bottom of the line cards which are were most cards are sold.

Earlier today  CNBC had an article calling AMD and nVidia to be a best buy in the chip market. Its true that valuations are lower for the chip makers but we believe the worst is yest to come. 2019 will not a a good year for video cards. There is far too many unsold video cards in the channel from the digital coin mess. The outlook is guarded.