Updates to this story
Nvidia is to gamble millions as it drops the price of one of its best-selling and most well-received graphics cards, the GTX 460, the first step in a price war with rival AMD.
KitGuru reports that Jay Puri, Executive Vice President of Worldwide Sales at Nvidia, and Jen-Hsun Huang, CEO and co-founder of the chip manufacturer, are considering a significant price drop for the GTX 460, just before the launch of Nvidia's latest card, the GTS 450.
Initial indications suggested a $20 drop in price, but more recent reports see a further $10 drop, to a total of $30.
It is not clear if this drop applies to both models of the GTX 460, the 768MB and 1GB versions, but with the lower memory GTX 460 selling for around $180, a $30 discount is pretty substantial, putting the card at a very reasonable $150.
The somewhat more expensive 1GB version ranges from around $220 to $260, so the discount puts the cheapest of those at $190, which is just enough below the $200 mark to encourage more buyers.
So, what has prompted this move? Well, Nvidia's newest card, the GTS 450, is expected to retail for between $129 and $149 (or between £99 and £129 in the UK). While it is a much less beefier piece of kit than the GTX 460, the price is low enough for some people to consider dual-SLIing two GTS 450s instead of having just a single GTX 460.
Cue the price cut, which will either see Nvidia lose millions or make several million more. Some people think the drop will mean multiplying $30 by the number of sales and writing it off as a loss, but the market doesn't work like that. Nvidia would not consider a $20 drop, let alone a $30 one, if it did not believe it would increase sales, and increased sales mean more profit, even if each individual unit pulls in a smaller amount than previous.
With new cards on the horizon, Nvidia needs to give consumers an extra incentive to buy its older models, even if they are technically superior to some of the newer ones it's offering. A price cut is one of the most effective incentives available.
While it's unclear what this means for Nvidia, and whether or not AMD will follow suit, sparking a price slashing war, one thing is for sure: the GTX 460 will now be even more bang for your buck.
Ah, they actually sold one of 'em, did they? Be rather unique for a Fermi card, an actual sale.
Oh, wait, they have their insignificant huddle of anxious fanbois. Okay, two card sold, then.
I'm quite willing to buy very cheap G92s to upgrade the network, as nVidia drivers are easier to work with, and since they are second hand and cheap, if they die it doesn't disturb me.
I don't think anyone said that. However, if NVIDIA's partners currently have GTX 460s in stock, which they obviously do, then NVIDIA needs to give them $30 back, or offer discounts on the next purchase, otherwise the partners get screwed and lose money on the final sale if they apply the new $150 MSRP. In practice, a $30 drop in MSRP may just be due to a $20~25 drop in NVIDIA's bulk prices, the ones that apply for their partners, but still.
"Nvidia would not consider a $20 drop, let alone a $30 one, if it did not believe it would increase sales"
Obviously.
"and increased sales mean more profit, even if each individual unit pulls in a smaller amount than previous."
Not necessarily, otherwise hardware vendors would just keep cutting prices all the time. It's all about hitting the right balance. If you want to increase profits, then you need to sell a LOT more cards while keeping healthy margins.
In this case, NVIDIA is probably just trying to protect their market share. Remember that GF104 is quite a big chip (367mm²) with presumably less than ideal yields (hence the 48 disabled shaders, and the 768MB versions with disabled ROPs) so at $150, NVIDIA can't be making a whole lot of money on it.
But hey, you know what they say, a fool and his money....
Oh, wait, they have their insignificant huddle of anxious fanbois. Okay, two card sold, then.
you say others are fanboy when YOU are the fanboy. not everyone has the same need and budget. nvidia and ATI has pros and cons. these day (with the latest generation), if you want to go sli, its nvidia or nothing. but if you want a cheap but powerful single gpu, its ATI. You said all of that without seeing gtx 460 sli benchmark hu? hey ¨anxious fanboy¨, return to your cave.