Thursday, August 24th 2017
Retailers are Buying AMD RX Vega 64 at $675 Each
The Radeon RX Vega series launch has been particularly disappointing for gamers and PC enthusiasts because their otherwise interesting price-performance ratios at $499 for the RX Vega 64 and $399 for the RX Vega 56, were quickly stripped away by dwindling stock and sky-rocketing prices, with the RX Vega 64 even going above $1k in some places. We are not even sure if the miners are to blame or whether supplier-level pricing has been adjusted after the launch to a higher price point that makes AMD's promised pricing impossible to achieve.
It turns out that retailers might not be the ones making a quick buck at this madness. Leaked invoices show that distributors (entities that supply inventory to retailers) have inflated prices even at their level. A San Jose-based distributor, Ma Laboratories Inc., is quoting USD $675 per unit of a reference-design (not Limited Edition), Radeon RX Vega 64 SKU to a computer store. The $499 price AMD launched the RX Vega 64 at, is supposed to be the end-user price (minus government taxes). The retailer we're in touch with confirmed that they were offered no volume pricing discount due to low stock at the distributor itself. A distributor should ideally sell the product to a retailer at a much lesser price than $499, so the retailer can make their margin. The higher up the supply-chain, the more control AMD gets. The company is in a better position to rein in on distributors than retailers. If distributors are inflating prices with apparent impunity, it wouldn't surprise us if this goes even higher up.
Can AMD do anything about this? It can work with AIB partners to significantly increase production to bring down prices. But that would be a huge gamble, which will either work, putting cards in the hands of gamers at the prices they were promised; or won't, by creating more miners; or worse still, end up as bankruptcy-causing unsold inventories, if the mining craze were to somehow subside.
There is another option AMD can try, in our opinion. It can re-launch RX Vega 64 and RX Vega 56 as new SKUs which come with crippled cypto-currency mining abilities (a special BIOS or something driver-level, or even something at the silicon-level), and discontinue the RX Vega 56 and RX Vega 64. The new SKUs could be clearly advertised as not being meant for crypto-currency mining (so as to deter false-marketing lawsuits). This is important for AMD, because the Radeon brand is under threat.
The more overpriced Radeon cards end up in the hands of miners, the fewer cards end up in the hands of gamers at the prices AMD promised; and conversely the lesser game developers are inclined to optimize their games for AMD Radeon, because fewer gamers use Radeon. NVIDIA can accelerate brand Radeon's demise by doubling down on game developer relations and pushing the next-generation of Game Works.
It turns out that retailers might not be the ones making a quick buck at this madness. Leaked invoices show that distributors (entities that supply inventory to retailers) have inflated prices even at their level. A San Jose-based distributor, Ma Laboratories Inc., is quoting USD $675 per unit of a reference-design (not Limited Edition), Radeon RX Vega 64 SKU to a computer store. The $499 price AMD launched the RX Vega 64 at, is supposed to be the end-user price (minus government taxes). The retailer we're in touch with confirmed that they were offered no volume pricing discount due to low stock at the distributor itself. A distributor should ideally sell the product to a retailer at a much lesser price than $499, so the retailer can make their margin. The higher up the supply-chain, the more control AMD gets. The company is in a better position to rein in on distributors than retailers. If distributors are inflating prices with apparent impunity, it wouldn't surprise us if this goes even higher up.
There is another option AMD can try, in our opinion. It can re-launch RX Vega 64 and RX Vega 56 as new SKUs which come with crippled cypto-currency mining abilities (a special BIOS or something driver-level, or even something at the silicon-level), and discontinue the RX Vega 56 and RX Vega 64. The new SKUs could be clearly advertised as not being meant for crypto-currency mining (so as to deter false-marketing lawsuits). This is important for AMD, because the Radeon brand is under threat.
The more overpriced Radeon cards end up in the hands of miners, the fewer cards end up in the hands of gamers at the prices AMD promised; and conversely the lesser game developers are inclined to optimize their games for AMD Radeon, because fewer gamers use Radeon. NVIDIA can accelerate brand Radeon's demise by doubling down on game developer relations and pushing the next-generation of Game Works.
135 Comments on Retailers are Buying AMD RX Vega 64 at $675 Each
I mean, they have to make a clear decision, are they going to supply their GRAPHICS cards to gamers to enjoy better GRAPHICS or they'll just release them for general compute aka cryptomining garbage? Because with price inflating, EVERYONE is getting rich, just not AMD. They still supply them at the designated initial price and then everyone sells it for 1/3 more. AMD doesn't get anything from it, they just get that tiny chunk and the rest is taken by retailers.
From what I've read, those actually running crypto farms don't even change graphic cards, they run them till they die. What really craps on supply of new cards are the opportunistic regular Joe's who see it as a quick buck for a month or two and then they sell it all. "Oh, the cards are good for mining, lets make some quick buck" and every such idiot grabs I don't know 10 cards. And you have bunch of these idiots who suck up the inventories dry. And then saturate second hand market, making new cards even harder to sell for AMD. In the end, everyone is making profit, except AMD.
Why not the PowerColor one as well and this was on launch date too.
There was no source for the photo posted.
They are shipping them to themselves. CA SJ corperate dis to NJ branch. Unless I'm reading the receipt wrong.
Then someone bought from the NJ branch and bought 2 Sapphires but there is no source as to who or for what?
Even if AMD could stop the mining, why would they? Nvidia has already announced it's ambitions for mining. Are you saying AMD should just give Nvidia free money?
AMD is still making money on the sale of graphics cards either way. The only difference is that miners don't contribute to the AMD brand and they don't represent a future sale. They will buy whatever works for them.
If you ask me, the one thing AMD should have done a long time ago is make operating the cards 24/7 void the warranty. It is easy to tell a card has been mined to death and the cost of replacements for miners is very costly for card partners. Consumer level cards were never designed to be run all day every day.
they made their own bed, now sleep in it! I won't shed any tears
Some people want a flexible card that they can game/work/mine or whatever they want with it.
Firstly, Vega 64/56 are already two of the worst cards going for mining performance compared to price and power consumption. Secondly, it's not miners buying them it's gamers and professional users. Thirdly, crippling the cards compute performance would make it useless for anything but games, so there go the professional sales that are currently keeping the ship afloat (and there's no guarantee that would drive those sales to the Vega FE and not the Titan).
I think my thoughts can be perfectly described by this quote from TweakTown:The reason why Vega prices are so high and supply is so low, is all 100% AMDs own fault:
* They've delayed Vega "to ensure that the supply is there, and miners don't disrupt it"
* They've promised an MSRP of $399/$499, so that "it stays affordable for normal people"
* They failed to deliver the promised supply, which got the entire supply chain very nervous
* The supply chain bumped prices at every step along the way, because they know Vega supply is very short. They cannot commit to smaller margins at higher volume, because there is no volume!
In my country there are zero Vega cards in stores right now. Our largest online electronics retailer haven't even bothered to list Vega cards on their website, even though RX400/500 series and GTX10 series were listed ahead of time and were in stock at release date. That's the same greedy store, which was not afraid of selling a regular GTX1080 (not FE and not Ti) for over $1000 not too long ago.
and also false is "399$" and "499$" - none of Vegas ever seen that price tag. so stop saying that Vega in ideal conditions is comeptitive or decent product...
RIP Vega for good. I hope Amd gets their $ from miners so they can invest in next gen and much more decent architecture.
I just don't buy it. If this is the case, then nobody can make profit out of them, and there is no reason for a retailer to stock the card at the first place.
If a retailer buys them for 675$, the selling price including profit would be too high to be competitive.