DF Direct Weekly: is next-gen GPU pricing out of control?

Welcome to 2023 and the return of DF Direct Weekly! After a short period of absence – we missed a week, in fact – the team returns to discuss the latest gaming and tech news. The year kicked off with the Consumer Electronics Show – CES – and on this week’s show myself, John Linneman and Alex Battaglia discuss keynotes from Nvidia, AMD and Sony, including our first look at Gran Turismo 7 on PSVR2, while addressing the latest thermal throttling concerns on the RX 7900 XTX reference card as well as new innovations coming this year for OLED TVs.

It’s also time to reflect on the backlash from Nvidia’s GeForce RTX 4070 Ti, which was perhaps unavoidable. With the extreme reactions in mind, I wanted to weigh in with some more detailed thoughts on why I thought the product was “OK” as opposed to the total disaster that many think it is. There are a series of factors that define how the RTX 4070 Ti fared the way it did and clearly, questions remain about the GPU market outlook going forward.

The arguments against the 4070 Ti are pretty straightforward: it’s the most expensive Class 70 product Nvidia has ever shipped, and its specs pale in comparison to previous Class 70 products. In terms of relative performance, the 4070 Ti is broadly comparable to the high-end results of the RTX 3000 generation, where the RTX 3070 did the same against the $499 RTX 2080 Ti. This is all true and the outlook looks bleak for PC graphics. On the face of it, Nvidia and AMD aren’t helping matters based on the prices of the products seen so far.

DF Direct Weekly #93 is hosted and curated by Rich Leadbetter, Alex Battaglia and John Linneman.

00:00:00 Introduction

00:01:25 News 01: Sony at CES 2023: PS VR2 and Gran Turismo

00:15:37 News 02: Nvidia launches RTX 4000 laptop GPUs, RTX video upscaling at CES

00:50:27 News 03: AMD Announces New CPUs and Discrete GPUs for RDNA 3 Laptops at CES Showcase

01:01:02 News 04: The next OLED televisions gain brightness

01:06:42 DF Supporter Q1: Could modders add shader precompilation to a game?

01:09:09 DF Supporter Q2: Are path-tracing remakes of classic games doable on consoles?

01:11:22 DF Supporter Q3: Would DF produce a video covering ray tracing games on the S-series?

01:12:39 DF Supporter Q4: What do you think DF has done over the years to survive – and continue to grow?

It’s a pretty damning series of accusations, but while the case against the RTX 4080 is simple, the 4070 Ti is more complex. Firstly, the lack of a Founders Edition card to price it at its $799/£799 is a disappointment – ​​especially given the excessive size of the products and the excessive price of many third-party boards. However, watching Scan right nowHowever, it’s still possible to get the card at its recommended price of £799 – and I’d still take it over the RTX 3080, which continues to sell for £700 or more buying new. More memory, DLSS3 and improved efficiency are worth the extra money.

The lack of generation-to-gen performance improvements for the money is a problem, but it’s not the first time it’s happened: the RTX 2080 launched with similar performance to the GTX 1080 Ti and no support for its new features for the same $699. The GTX 980 was cheaper than the outgoing GTX 780 Ti, but out-of-the-box performance wasn’t all that much better. With the RTX 4070 Ti, we’re looking at two factors here: First, not all generations offer gen-on-gen and slam dunk value gain in the same way as the RTX 3000. Second, the outlook economics are generally not good – prices are rising everywhere – while the situation for semiconductors is particularly problematic.

Due to the year-end holidays, we haven’t blogged on our Year-End Direct, which you can watch here.

To get an idea of ​​these issues, check out the costs of the new Process Nodes versus the 7nm node used for current-gen consoles – we’re looking at a 60% increase per wafer for 5 nm and expected to worsen with 3 nm, where the price of the wafer doubles more than 7 nm. This is why the Xbox Series S exists, according to our legacy 2020 interview with system architect Andrew Goossen, Microsoft saw no real way to reduce the costs of the Xbox Series X over time, so it produced a less powerful console instead. And even with existing 7nm/6nm consoles, Sony has raised prices and Microsoft continues to lose money on every machine it makes – but at least the Xbox team has given us some explanation as to why they created the S series in the first place. Neither AMD nor Nvidia have spent much time explaining why their products are increasing in price, even though they source from the same manufacturer – TSMC.

Factoring in rising costs across the board – and especially at the core semiconductor level – the 4070 Ti arrives as a kind of ‘side step’, a replacement RTX 3080 if you will. Costs went up then, but what about Nvidia’s profit margin? It’s the perceived “greed factor” that scares many. Undoubtedly, there will be a fair amount of headroom in the mix, as the RTX 4070 Ti was initially the RTX 4080 12GB with a base price of $899. Nvidia cut $100 and presumably compensated third-party card makers for eliminating their packaging and creating replacement boxes – which couldn’t be cheap. Even so, it’s also hard to believe that the company still isn’t making decent money on the product. Should Nvidia have reduced its profit margin even further?

This is when the market – the gamers – have the final say and this is the only factor likely to cause GPU pricing to rethink. If the value isn’t there, the product won’t sell and the graphics makers will be forced to cut their margins and offer the card at a discount. I’m surprised that almost a week after launch it’s possible to buy an RTX 4070 Ti at its base price, which suggests that demand isn’t as high as expected. However, it is more surprising to me that more than two years after its debut, it is impossible to buy a brand new RTX 3080 at its launch price of £649 in the UK. Some of that will be due to currency swings against the US dollar, but even so – remarkably – £699 is the UK base price for an RTX 3080 while bargain prices remain robust. Will we see cheaper RTX 4070 Ti cards? This seems unlikely in the short term – I would expect to see a move on the RTX 4080, where its value proposition didn’t make sense compared to the RTX 4090 and even less sense compared to the RTX 4070 Ti.

A unique performance snapshot, showing A Plague Tale Requiem analyzed on PS5 and with exact PS5 equivalent settings on RTX 4070 Ti, RTX 2080 and GTX 1080 Ti. Yesterday’s £699 GPUs versus today’s £799 GPUs, with added console interest.

Things may change if game-changing competition emerges – and who knows AMD’s RX 7800 XT will be up to snuff – but the harsh reality right now is that if you bought a GTX 1080 Ti or RTX 2080 at At the time at £699, there are only two real alternatives to consider in the same price bracket: RTX 4070 Ti and RX 7900 XT. Given the choice between the two, the Nvidia card’s features, RT performance, and theoretically lower price tip it over for me, but those less interested in AI features or ray tracing may prefer the AMD alternative , which is generally faster in rasterization and has a lot more memory.

Right now the sad reality is that both will set you back over £699 (although £699 in 2017 is over £850 today, adjusted for inflation), but on the plus side you benefit always improving performance day and night. (4070 Ti is something 2x to 2.7x faster than 1080 Ti based on various rasterization benchmarks), efficiency and features. Today’s xx70 class product is more expensive than anything we’ve seen before, but I’d be inclined to believe consumers are going for the best performance for their budget more than a product’s name/rating given.

One final thought: All of the new GPUs we’ve seen so far have been aimed at high-end avid gamers. We’ve yet to see where the prices will land for AMD and Nvidia’s offerings in the lower price ranges. The question is, of course, how much gen-on-gen price increases will continue as we break through the $500/£500 barrier. Right now an RTX 3060 12GB starts at £330 – which is a reasonable value – and that’s the target to beat, if not for the inevitable 4060, then definitely the 4050.

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