GPU manufacturers have been riding on a crypto-driven wave of high for quite a few years and its starting to get ugly. Gamers have been neglected for the past few years as graphics card MSRPs became a figment of imagination and actual selling prices existed in multiples; and looks like they are about to get their comeuppance. The first-hand GPU market has seen its biggest quarterly crash since the financial crisis of 2009 - something that shows just how much MSRPs are becoming detached with market forces.
The crypto-driven roaring 20s are truly over for the new-GPU market, and NVIDIA, AMD, Intel better pay attention
The GPU crash seems to have particularly affected AMD the most, with NVIDIA also consuming some of the hurt (but likely protected by robust RTX 4090 sales) and Intel coming out on top as the winner (with the lowest exposure to the discrete GPU market). Here are the gory details:
- Intel: Market share increased by 10.3 percentage points, shipments increased by 4.7 %.
- AMD: 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 discrete GPU market (add in cards) decreased by 33% and overall GPU shipment units decreased by 10.3% quarter over quarter.
“All the companies gave various and sometimes similar reasons for the downturn: the shutdown of crypto mining, headwinds from China’s zero-tolerance rules and rolling shutdowns, sanctions by the US, user situation from the purchasing run-up during Covid, the Osborne effect on AMD while gamers wait for the new AIBs, inflation and the higher prices of AIBs, overhang inventory run-down, and a bad moon out tonight......Generally, the feeling is Q4 shipments will be down, but ASPs will be up, supply will be fine, and everyone will have a happy holiday,” - Jon Peddie
- The GPU’s overall attach rate (which includes integrated and discrete GPUs, desktop, notebook, and workstations) to PCs for the quarter was 115%, down -6.0% from last quarter.
- The overall PC CPU market decreased by -5.7% quarter to quarter and decreased -by 18.6% from year to year.
- Desktop graphics add-in boards (AIBs that use discrete GPUs) decreased by -33.5% from the last quarter.
- This quarter saw 0.5% change in tablet shipments from last quarter.
Source: Jon Peddie Research
While the first-hand GPU market might be in a collapse, the second-hand GPU market is alive and booming as mining GPUs flood the market bring down average selling prices of previous generation cards to extremely attractive performance per dollar figures. For eg, you can used a pre-mined RTX 3060 XC Gaming 12 GB for $99.
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 these for the most part (the RTX 4090 is actually quite well for the consumers that want the absolute best without looking at the price tag but the RTX 4080 is suffering the effects of stagnating demand).
Speaking from a supply and demand perspective, there are a ton of GPUs available that can offer very decent performance per dollar to gamers - which is the audience that has always been around for the major IHVs - so there is no real 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.) that could encourage consumers to cross that bridge but its reach is fairly limited as DLSS 2.0 and FSR 1.0/2.0 based alternatives are not too far behind.
This ties in well to the advisory we have published time and time again as NVIDIA, AMD and Intel can either wait out the flood of cheap GPUs on the market or lower their MSRPs a bit to make their products more competitive with the wider second-hand market.