Hd5870 - $299

[Piotrsama]

So? They sold a ton of cards, made money and were still able to slash prices when the HD4800-series was released. Even to this day the majority of Nvidia 200-series cards outsell the ATI competition. IMO, they thought right and hit the nail on the head when it came to their bottom line.

Releasing a new GPU so far in advance of the competition is always a very risky move as you are forced to price it according to where you THINK the competition may be when it comes to price / performance. Last time, Nvidia bet too high and ended up having to take a hit when it came to compensating all the whining early adopters. This could be a reason for ATI to price their card according to where they think it will land in the current generation's performance spectrum.

You contradicted yourself.

I think that it would be GOOD for AMD to have a higher price than the rumored $300 for the 5870.

[SKYMTL]

You contradicted yourself.

Maybe I should have made myself clearer.

It was BECAUSE they made a ton of money (profit) up until the HD4800-series release that they were able to reimburse customers. Their board partners were able to look like white knights riding in for the rescue. I remember well the posts on here and other forums at the time; EVGA, XFX and others were made to look like heroes and positive press followed. It was a brilliant move and it won a lot of people's support thereafter. Without that initial profit, none of that would have happened.

Considering AMD's financial situation, if they get into a situation like Nvidia did, do you really think they would be able to offer the same if they priced their cards with very little margin for real profit? No. Which is why they have to hedge their bets and make as much money as possible before Nvidia hits back. That way they can make the most out of their lead and put some of that profit back into development of future products.

[bill_d]

Maybe I should have made myself clearer.

It was BECAUSE they made a ton of money (profit) up until the HD4800-series release that they were able to reimburse customers. Their board partners were able to look like white knights riding in for the rescue. I remember well the posts on here and other forums at the time; EVGA, XFX and others were made to look like heroes and positive press followed. It was a brilliant move and it won a lot of people's support thereafter. Without that initial profit, none of that would have happened.

Considering AMD's financial situation, if they get into a situation like Nvidia did, do you really think they would be able to offer the same if they priced their cards with very little margin for real profit? No. Which is why they have to hedge their bets and make as much money as possible before Nvidia hits back. That way they can make the most out of their lead and put some of that profit back into development of future products.

so you want the to price their cards at a higher price that makes it more likely that nv can put them in that situation

[SKYMTL]

so you want the to price their cards at a higher price that makes it more likely that nv can put them in that situation

No. I am saying that ATI needs to protect themselves in case Nvidia is able to beat their price / performance ratio. It is better for them as a company to give themselves more room to maneuver price-wise when Nvidia comes out with their new cards.

Let's put it this way. Yes, it simplifies the way the supply chain works and assumes profit but it's for clarity's sake:

ATI releases a $299 card and they make $15/unit.

Nvidia then releases their next gen card and prices one of the SKUs at $299. That SKU is able to beat the ATI card in the price / performance category.

ATI can now cut the price of their card by at most $15 before they start loosing money on every card sold.


Now, supplement that $299 with say $349 and suddenly ATI has much more wiggle room when it comes to matching Nvidia's next move.

[Stukov]

No. I am saying that ATI needs to protect themselves in case Nvidia is able to beat their price / performance ratio. It is better for them as a company to give themselves more room to maneuver price-wise when Nvidia comes out with their new cards.

Let's put it this way. Yes, it simplifies the way the supply chain works and assumes profit but it's for clarity's sake:

ATI releases a $299 card and they make $15/unit.

Nvidia then releases their next gen card and prices one of the SKUs at $299. That SKU is able to beat the ATI card in the price / performance category.

ATI can now cut the price of their card by at most $15 before they start loosing money on every card sold.


Now, supplement that $299 with say $349 and suddenly ATI has much more wiggle room when it comes to matching Nvidia's next move.

I am going to have to disagree as I just posted something similar on the guru3d forums I'm just going to copy and paste it.
--------------------------------------
I'm going to try to explain this the way I am about 90% sure AMD does it's business.

When AMD bought the ATI graphics division, they changed how they do business. Instead of introducing new models and pricing them compared to current models (which over a period of years lead to 800 dollar video cards). AMD I think is smart enough to realize that this kind of model of business will eventually burn itself out.

The majority of consumers aren't going to spend that much on a single piece of equipment (enthusiasts are small number of people), having such expensive hardware makes PC gaming to be a niche market.

AMD can't survive on only catering to a niche market, neither can PC gaming. PC gaming would have probably died if not for AMD buying ATI and changing the dynamic of how they do business.

AMD changed by instead of pricing a new product based on previous products (such as companys own lineup and that of it's competitor), they select pricing tiers and then design cards that will give the most performance per dollar/watt/temp.

Each design cycle is designed around producing a new product at the 199, 249, 299 price points (or 499/549 for enthusiast) and as time goes on or competition occurs the prices will drop lower. I don't work for AMD but I forsee that the launch price of 199-299 is going to be what AMD designs their GPUs for, for the next few years if not more.

They aim to also provide more value at even lower price points in order to provide every customer with the ability to get into PC gaming without having to break the bank. When going against the consoles, PCs have several advantages.

While a console may cost 300-400 dollars (more on launch) you need that full price (and more for controllers cables, etc) to play the games. PC advantage is that most people ALREADY have a computer, so you can drop in 100-175 dollar video card maybe spend 30 bucks on some more ram and you can have a better experience than on a console for the most part.

This is AMD's goal, at least I think it is, as in order for PC gaming (thus video card/CPU companies) to survive is to overwhelm the console systems. So that consoles fade away, but at least PC gaming can be fully cemented as an industry.

But hey, that is just my humble opinion. AMD is going to release their 5870 at the 299 price point and the 5850 at either 199 or 249 depending on specs.
----------------------

AMD is dictating the market by leading and designing products for a lower price point, which allows them to reduce price in response to competition. Just like last round, AMD's costs are far lower than Nvidia, no matter how much more powerful Nvidia's GPUs are - they are bigger and more expensive to produce (including PCB).

AMD has positioned themselves to be able to be more flexible and to dictate market price and style. Nvidia is sort of caught in a poorer place excepting design cycles around larger and larger more powerful GPUs trying to "out do" ATI by going bigger and better.

AMD came along and changed the tempo and fubared Nvidia's mojo. Until probably GT300's successor or later, the trend will probably continue for how AMD leads the market tempo. AMD/Nvidia will have cards priced and performance nearly equal - but AMD's costs will be lower until Nvidia can design a smaller GPU from the ground up.

[villa1n]

I am going to have to disagree as I just posted something similar on the guru3d forums I'm just going to copy and paste it.
--------------------------------------
I'm going to try to explain this the way I am about 90% sure AMD does it's business.

When AMD bought the ATI graphics division, they changed how they do business. Instead of introducing new models and pricing them compared to current models (which over a period of years lead to 800 dollar video cards). AMD I think is smart enough to realize that this kind of model of business will eventually burn itself out.

The majority of consumers aren't going to spend that much on a single piece of equipment (enthusiasts are small number of people), having such expensive hardware makes PC gaming to be a niche market.

AMD can't survive on only catering to a niche market, neither can PC gaming. PC gaming would have probably died if not for AMD buying ATI and changing the dynamic of how they do business.

AMD changed by instead of pricing a new product based on previous products (such as companys own lineup and that of it's competitor), they select pricing tiers and then design cards that will give the most performance per dollar/watt/temp.

Each design cycle is designed around producing a new product at the 199, 249, 299 price points (or 499/549 for enthusiast) and as time goes on or competition occurs the prices will drop lower. I don't work for AMD but I forsee that the launch price of 199-299 is going to be what AMD designs their GPUs for, for the next few years if not more.

They aim to also provide more value at even lower price points in order to provide every customer with the ability to get into PC gaming without having to break the bank. When going against the consoles, PCs have several advantages.

While a console may cost 300-400 dollars (more on launch) you need that full price (and more for controllers cables, etc) to play the games. PC advantage is that most people ALREADY have a computer, so you can drop in 100-175 dollar video card maybe spend 30 bucks on some more ram and you can have a better experience than on a console for the most part.

This is AMD's goal, at least I think it is, as in order for PC gaming (thus video card/CPU companies) to survive is to overwhelm the console systems. So that consoles fade away, but at least PC gaming can be fully cemented as an industry.

But hey, that is just my humble opinion. AMD is going to release their 5870 at the 299 price point and the 5850 at either 199 or 249 depending on specs.
----------------------

AMD is dictating the market by leading and designing products for a lower price point, which allows them to reduce price in response to competition. Just like last round, AMD's costs are far lower than Nvidia, no matter how much more powerful Nvidia's GPUs are - they are bigger and more expensive to produce (including PCB).

AMD has positioned themselves to be able to be more flexible and to dictate market price and style. Nvidia is sort of caught in a poorer place excepting design cycles around larger and larger more powerful GPUs trying to "out do" ATI by going bigger and better.

AMD came along and changed the tempo and fubared Nvidia's mojo. Until probably GT300's successor or later, the trend will probably continue for how AMD leads the market tempo. AMD/Nvidia will have cards priced and performance nearly equal - but AMD's costs will be lower until Nvidia can design a smaller GPU from the ground up.

Extremely good logic here... They have to look at the big picture and realize to survive and propagate a computer gaming ecosystem, they have to take out consoles.

[Stukov]

Extremely good logic here... They have to look at the big picture and realize to survive and propagate a computer gaming ecosystem, they have to take out consoles.

Also dictating pricing points allows them to design for them. That way they can make a product that does the same at a lower cost to them, which allows for quicker reduction in price over time or in competition.

As well as increase market penetration.

[Talonman]

Maybe I should have made myself clearer.

It was BECAUSE they made a ton of money (profit) up until the HD4800-series release that they were able to reimburse customers. Their board partners were able to look like white knights riding in for the rescue. I remember well the posts on here and other forums at the time; EVGA, XFX and others were made to look like heroes and positive press followed. It was a brilliant move and it won a lot of people's support thereafter. Without that initial profit, none of that would have happened.

I also remember the cheers of praise on the refund...

I don't think many companies would do that. It was a PR+ for sure.

[bill_d]

I also remember the cheers or praise on the refund...

I don't think many companies would do that. It was a PR+ for sure.

having to do a refund because your over priced is not good pr, but pressure

[Talonman]

For sure, and it came from ATI... No doubt!