GPU prices could come ‘crashing down’ with scalpers getting burned
Graphics card prices are likely to come “crashing down” from their inflated price tags in the future, according to a new report from an analyst.
Jon Peddie, who heads up Jon Peddie Research (JPR), shared his latest thoughts on the graphics market, and in particular desktop cards for PCs, in an article for Graphic Speak (spotted by Tom’s Hardware).
The report includes an interesting analysis of the average selling price of AIBs (meaning add-in boards, a fancy term for PC graphics cards), complete with a graph which shows pricing has been rising gradually since 2014, but really shot up during 2020 and 2021.
In the US from 2014 through to 2019, we saw the desktop GPU go from an average price tag of about $270 to around $440, but in 2020 the average selling price leapt to over $650, and further to about $780 in 2021. Which is, of course, ridiculous, but we all know the reasons why, and Peddie goes on to underline them.
Peddie observes: “PC gaming and mining AIBs have increased in price by at least 2x, maybe 3x, over PC notebook GPUs. So, supply shortage has to be ruled out as the reason for the surge in PC AIB pricing. That leaves miners, speculators, and gougers. This is no joke.”
He continues: “Who is benefitting? The channel organizations like Amazon, NewEgg, BestBuy, and others, while the speculators sell AIBs on eBay at prices 2x to 3x more than the manufacturer’s suggested retail price (MSRP).”
The article concludes optimistically though, with the assertion that “there’s a good probability that these inflated prices will come crashing down as gamers just say no”, leaving the price gougers with graphics cards they can’t sell (or rather they’ll be forced to sell them at a loss – what a shame that’d be).
Analysis: Are GPU prices really going to crash?
We’d broadly agree with Jon Peddie here, and certainly as we’ve already said, pricing has clearly got ridiculous, particularly around mid-2021 when certain Nvidia graphics cards were costing triple their MSRP in some cases.
Where to place the blame is equally clear, with the pressures of crypto and Ethereum mining causing demand, taking cards out of the hands of gamers, while the pandemic-related supply problems worsened everything – and then caused the third factor, namely scalpers looking to buy that scarce inventory to resell for big profits.
As to whether GPU pricing will ‘crash’ as Peddie hints that there’s a good chance of happening – well, we’re not so sure on that. True, there are a lot of signs of late that availability of graphics cards is strengthening, albeit with prices drifting down and normalizing slowly rather than in any hurry.
But the theory has always been that the second half of 2022 will see more of a recovery from the component shortage for both AMD and Nvidia, with new Arc cards coming to market from Intel as well to bolster supply levels further. It’s a promising sounding mix of positive steps forward, for sure, and so there’s certainly reason to hope that the GPU market will see prices dropping at more of a speed akin to a stone than a feather.
On balance, it certainly seems like pulling the trigger on a GPU purchase this month would be rash, and the best bet is to wait and keep an eye on those price tags which are only heading in one direction right now (with the other eye on potential market developments that could muddy any recovery, like further lockdowns in China for example).
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