Friday, April 12, 2013

Did NVidia price the GeForce Titan too high?

The recently released NVidia Titan graphics card is the most expensive single GPU graphics card out in the market. US$1000!!! That's in the same ballpark as their flagship dual GPU graphics card, the GTX690. And it is not even faster than the GTX690 except in cases where the 2GB frame buffer (per GPU) comes becomes the bottleneck. That usually happens in multi display setups that work at a huge resolution.
What would have happened if NVidia dropped the prices of the entire lineup and released the Titan at around $700? I know that would open up a whole new opportunities for the consumer but what would have happened to profits of NVidia?
So Titan priced at $700, GTX680 priced at $400, GTX690 priced at $800, and rest of the line up following the same pattern.
Why they should have done it?
  • The chances are that everyone who's got a 1440p screen would settle for one or few Titans instead of GTX680s. High resolution is where the Titan shines because of its 6GB frame buffer.
  • People who are settling for one Titan might even buy two Titans without much hesitation. Or even three. Heck, we even see people running Titans in SLI at the current price.
  • Even people who have previously bought a GTX 680s would upgrade to the Titan. That means NVidia would be able to sell two products in the same generation. That usually never happens. Even I might consider getting a Titan to replace my GTX670. But $700 is still a little too steep for me.
  • NVidia would be able to grab a portion of AMD sales - at least initially. Not because they priced Titan lower, but because they dropped the prices of the entire line up. AMD would have to fight back with more price cuts.

Why I think they priced it correctly (or why they shouldn’t have done it)

  • If the Titan was cheaper than the GTX690, people would never get the GTX690. If the Titan was more expensive than the GTX690, only the people running ultra high resolution, such as multiple displays, would be buying the Titan. Even though GTX690 gives better performance at 1080p, most people are weary of the issues in multi GPU setups. Driver issues such as negative scaling and no scaling at all, and inherent issues such as micro-stuttering have been common place in not only ATI, but NVidia as well - to a lesser degree.
  • Titan is really aimed at people using high resolution displays. 1080p will be the most common resolution for a long time to come and looking at the current games, you don't need anything faster than a GTX680 or a HD7970 to get 60fps in every game out there at 1080p. There are people who buys Titans, even two of them at 1080p - overkill I know - but there are people who do that. Would be beneficial if you have a 120Hz monitor. While 60FPS is enough for casual game play, it is not enough for competitive online multiplayer game play. If two people have the same ping time to a server, and have the same skill level, the difference in FPS could determine who stands alive.
  • If they dropped the prices of the entire 600 series to make room for the Titan to fit into the $700 mark, the sales would not significantly increase because $700 is still pretty expensive for a single GPU card. Besides, more people would settle for the GTX680 than the Titan because Titan gives only about 40% more performance. Why pay almost twice to get 40% more performance. And they would only be losing profits because the manufacturing costs of the GPU is pretty steep. By lowering the price of the card by 30%, they might incur a loss of profits by 50%. They would lose profits from the entire line up! (But IMO, they should kill anything below the GTX650, because Intel's iGPU is quite capable of competing in that low end segment.)
  • If more people bought Titans because it is cheap, they would have a hard time selling their next generation cards which would only be as fast as or slightly faster than the Titan. Heck, GTX780 could even be slower than the Titan. We don't know how fast the next generation is going to be. But I doubt the $500 card would be faster than a Titan. Thus they definitely don't want to cripple the future sales.

From the company's perspective, I believe NVidia have priced the Titan correctly. Hey, they have highly paid economists and sales forecasters in their arsenal. Who are we to doubt their recommendations?

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