Quote Originally Posted by Stukov View Post
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.