Monday, September 9th 2024

AMD Confirms Retreat from the Enthusiast GPU Segment, to Focus on Gaining Market-Share

Sep 9th, 2024 00:04 Discuss (272 Comments)

AMD in an interview with Tom's Hardware, confirmed that its next generation of gaming GPUs based on the RDNA 4 graphics architecture will not target the enthusiast graphics segment. Speaking with Paul Alcorn, AMD's Computing and Graphics Business Group head Jack Huynh, said that with its next generation, AMD will focus on gaining market share in the PC gaming graphics market, which means winning price-performance battles against NVIDIA in key mainstream- and performance segments, similar to what it did with the Radeon RX 5000 series based on the original RDNA graphics architecture, and not get into the enthusiast segment that's low-margin with the kind of die-sizes at play, and move low volumes. AMD currently only holds 12% of the gaming discrete GPU market, something it sorely needs to turn around, given that its graphics IP is contemporary.

On a pointed question on whether AMD will continue to address the enthusiast GPU market, given that allocation for cutting-edge wafers are better spent on data-center GPUs, Huynh replied: "I am looking at scale, and AMD is in a different place right now. We have this debate quite a bit at AMD, right? So the question I ask is, the PlayStation 5, do you think that's hurting us? It's $499. So, I ask, is it fun to go King of the Hill? Again, I'm looking for scale. Because when we get scale, then I bring developers with us. So, my number one priority right now is to build scale, to get us to 40 to 50 percent of the market faster. Do I want to go after 10% of the TAM [Total Addressable Market] or 80%? I'm an 80% kind of guy because I don't want AMD to be the company that only people who can afford Porsches and Ferraris can buy. We want to build gaming systems for millions of users. Yes, we will have great, great, great products. But we tried that strategy [King of the Hill]—it hasn't really grown. ATI has tried this King of the Hill strategy, and the market share has kind of been...the market share. I want to build the best products at the right system price point. So, think about price point-wise; we'll have leadership."

Alcorn pressed: "Price point-wise, you have leadership, but you won't go after the flagship market?," to which Huynh replied: "One day, we may. But my priority right now is to build scale for AMD. Because without scale right now, I can't get the developers. If I tell developers, 'I'm just going for 10 percent of the market share,' they just say, 'Jack, I wish you well, but we have to go with Nvidia.' So, I have to show them a plan that says, 'Hey, we can get to 40% market share with this strategy.' Then they say, 'I'm with you now, Jack. Now I'll optimize on AMD.' Once we get that, then we can go after the top."

The exchange seems to confirm that AMD's decision to withdraw from the enthusiast segment is driven mainly by the low volumes it is seeing for the kind of engineering effort and large wafer costs spent building enthusiast-segment GPUs. The company saw great success with its Radeon RX 6800 series and RX 6900 series mainly because the RDNA 2 generation benefited from the GPU-accelerated cryptomining craze, where high-end GPUs were in demand. This demand disappeared by the time AMD rolled out its next-generation Radeon RX 7900 series powered by RDNA 3, and the lack of performance leadership compared to the GeForce RTX 4090 and RTX 4080 with ray tracing enabled, hurt the company's prospects. News of AMD focusing on the performance segment (and below), aligns with the rumors that with RDNA 4, AMD is making a concerted effort to improving its ray tracing performance, to reduce the performance impact of enabling ray tracing. This, raster performance, and efficiency, could be the company's play in gaining market share.

The grand assumption AMD is making here, is that it has a product problem, and not a distribution problem, and that with a product that strikes the right performance/Watt and performance/price equations, it will gain market-share.

Catch the full interview in the source link below.

Source: Tom's Hardware

Add your own comment

272 Comments on AMD Confirms Retreat from the Enthusiast GPU Segment, to Focus on Gaining Market-Share

#226

gffermari

AusWolfSame here. :)

As for the original topic, I'll be willing to buy Nvidia again if they come down from their high horse and price their products by their performance, not "features" (99% of which are there on AMD as well) again. I don't hate them, I just don't feel the "premium feel" that people are on about when they choose Nvidia instead of AMD. It's a damn GPU, it plays games, what else is there to it? :D

What we have had the last couple of gpu gens, is plenty of raster performance that doesn't even need to increase in the future and not even close enough RT performance, no matter what lithography we use or how much advanced we are capable to make our architecture.
So practically, it's all about features now because it's the only way to play a game that doesn't look like an Assassins Creed.
If you don't have the features, you don't play the games as they supposed to run as next gen ones. You can play them without having the features, but you see a previous gen game (I'm exaggerating since RT implementation is not always done at meaningful scale).

I understand that you want to pay for performance and not tricks but you realize that in order to increase the raster quality of a game, we just needed to go from 1million calculations to 1.1million (random numbers). The RT requires 100million calcs. So it's either you don't get RT until 2100 or you get it now by using tricks.

These tricks are not easy to be created, so we have to pay for them to R&D them.

#227

Caring1

EasoI think we all will lose on this. Nvidia has no reason to try that much, as long as there is lead they can keep jacking prices up endlessly.

When will people understand it has nothing to do with Nvidia being in the lead, it is because of the consumers that keep paying the asking price.

#228

RUSerious

Icon CharlieHOW in the hell of a company who is supposed to be a high, premier corporation ONLY made a NET profit of 32+ million last quarter after a tax write off from the government?

R&D cost of keeping up with AMD's rivals is very steep. Other than that, you'd have to talk to a corporate finance lawyer to figure out if 'only' showing a profit of $32M US was a good thing that quarter or not. Some, even larger companies, LOSE money in a given quarter - but are still very healthy from a high zoot wall street analyst's perspective. Most companies are playing the game they need to play, not necessarily the one we think they should.

MonkeeDeprioritizing flagship gaming GPUs in favor of gaining market share may ultimately be a detrimental strategy for AMD

I agree. I don't think that will win them many hearts and minds. Given what happened in their Graphics division, AMD may have had no choice but to stay out of high end gaming graphics for RDNA4 and probably RDNA5. After that, we'll see.

I'm not a fan of AMD or NVidia in GFX. I've bought mostly NV because the out off the box graphics drivers were terrible on the last two Radeon products I bought. I have no patience for this - but that's just me. I do favor AMD over Intel in CPUs - though I've owned a fairly equal number of both.

#229

AusWolf

gffermariWhat we have had the last couple of gpu gens, is plenty of raster performance that doesn't even need to increase in the future and not even close enough RT performance, no matter what lithography we use or how much advanced we are capable to make our architecture.
So practically, it's all about features now because it's the only way to play a game that doesn't look like an Assassins Creed.
If you don't have the features, you don't play the games as they supposed to run as next gen ones. You can play them without having the features, but you see a previous gen game (I'm exaggerating since RT implementation is not always done at meaningful scale).

I understand that you want to pay for performance and not tricks but you realize that in order to increase the raster quality of a game, we just needed to go from 1million calculations to 1.1million (random numbers). The RT requires 100million calcs. So it's either you don't get RT until 2100 or you get it now by using tricks.

These tricks are not easy to be created, so we have to pay for them to R&D them.

Except that I don't need those features. RT adds very little to any game, but takes a massive chunk of performance away. I can easily live without it without feeling like I'm losing out on anything, as long as I can turn it off.

Caring1When will people understand it has nothing to do with Nvidia being in the lead, it is because of the consumers that keep paying the asking price.

Exactly! Nvidia is in the lead because people pay up, and not because of whatever they offer (or advertise to offer). There's nothing more to it.

#230

Recus

It's safe to say AMD killed ATi.

#231

csendesmark

RecusIt's safe to say AMD killed ATi.

That is old news :D
www.cnet.com/tech/tech-industry/amd-to-retire-ati-brand/

#232

Icon Charlie

RUSeriousR&D cost of keeping up with AMD's rivals is very steep. Other than that, you'd have to talk to a corporate finance lawyer to figure out if 'only' showing a profit of $32M US was a good thing that quarter or not. Some, even larger companies, LOSE money in a given quarter - but are still very healthy from a high zoot wall street analyst's perspective. Most companies are playing the game they need to play, not necessarily the one we think they should.

I agree. I don't think that will win them many hearts and minds. Given what happened in their Graphics division, AMD may have had no choice but to stay out of high end gaming graphics for RDNA4 and probably RDNA5. After that, we'll see.

I'm not a fan of AMD or NVidia in GFX. I've bought mostly NV because the out off the box graphics drivers were terrible on the last two Radeon products I bought. I have no patience for this - but that's just me. I do favor AMD over Intel in CPUs - though I've owned a fairly equal number of both.

Oh I do I understand R&D costs. My own R&D is at least 5 years of research and I'm in my 2nd year of preproduction work.

Because of my understanding of actual manufacturing costs, distribution and essenually running lean, mean profitable machines, I can certainly express my opinions over what I see are excessive overheads in many of the corporations of today.

This means pretty much lower quality products to the customer base. For the Price of the 7000 series video card at lauch, it was mostly a fail.

To prove my point again with why I Blame Dr. Lisa Su and their management in the mess they are in with this video from Hardware Unboxed.

I was not impressed with this launch AT all.

Of late, I have not been impressed with anything AMD has been producing for the cost they trying to push.

And again you are not going to like the cost of the newest generations of motherboards coming soon.

These are bellweather points on what I think the video card section of AMD might produce in the future.

Increased Costs for less value and performance.

#233

Nhonho

btarunr
AMD Confirms Retreat from the Enthusiast GPU Segment, to Focus on Gaining Market-Share

Malicious "news". It wrongly suggests that AMD will never again develop a high-end GPU to compete with Nvidia's best GPU. Everyone knows that AMD will return to releasing high-performance GPUs to compete with Nvidia's best GPUs to not to leave the highly lucrative HPC market only for Nvidia.

#234

Minus Infinity

MonkeeDeprioritizing flagship gaming GPUs in favor of gaining market share may ultimately be a detrimental strategy for AMD. First, by stepping back from the high-end segment, AMD risks losing its brand prestige and technological leadership in the highly competitive gaming market, which can have long-term effects on consumer perception and loyalty. High-end GPUs often serve as a benchmark for performance and innovation; without a strong presence in this space, AMD may struggle to attract enthusiasts and developers who push technological boundaries. Additionally, flagship products can drive profitability—premium prices yield higher margins, which help fund research and development for future innovations. Furthermore, if AMD solely focuses on mid-range products, it could leave the door open for Nvidia to consolidate their dominance in the high-end sector, ultimately stifling AMD’s potential for disruptive breakthroughs and long-term growth in the overall market. In essence, neglecting flagship offerings could undermine AMD's ability to compete effectively across all segments and may limit its potential for enduring success.

Yet again, stop spreading nonsense. They are only abandoning enthusiast class gpu for RDNA4. RDNA4 is only a minor update of RDNA3, so no way could they compete against 4090 let alone 5090. RDNA5 is a clean sheet architectural update and they are definitely offering enthuisiast clas with that. AMD can't win. Even with the 7900XTX which is 50%b cheaper than 4090 and only 5-20% slower in raster it gets hammered. Everybody laughs about their RT and yet all the commenters say they don't use it much anyway even on Nvidia cards.

#235

Easo

Caring1When will people understand it has nothing to do with Nvidia being in the lead, it is because of the consumers that keep paying the asking price.

When you have no choice left you will pay whatever for what is available.

#236

Kyan

Minus InfinityRDNA4 is only a minor update of RDNA3 [...] RDNA5 is a clean sheet architectural update ...

I'm genuinely curious and a bit clueless, but how RDNA 3 and 4 can have a similar architecture if RDNA 3 is MCM and RDNA 4 is monolithic ? Dosen't MCM and monolithic change everything in the design of the architecture ?

#237

AusWolf

KyanI'm genuinely curious and a bit clueless, but how RDNA 3 and 4 can have a similar architecture if RDNA 3 is MCM and RDNA 4 is monolithic ? Dosen't MCM and monolithic change everything in the design of the architecture ?

RDNA 3 isn't entirely MCM, either. At least Navi 33 (RX 7600) isn't. You can put the memory controller and last-level cache onto the same die, or a separate one, it doesn't change the architecture (that is, the internal working of the compute units).

#238

Caring1

EasoWhen you have no choice left you will pay whatever for what is available.

Maybe for necessities, not for things that aren't required.

#239

RUSerious

Icon CharlieThis means pretty much lower quality products to the customer base. For the Price of the 7000 series video card at launch, it was mostly a fail.

To prove my point again with why I Blame Dr. Lisa Su and their management in the mess they are in with this video from Hardware Unboxed.
I was not impressed with this launch AT all.

Of late, I have not been impressed with anything AMD has been producing for the cost they trying to push.

And again you are not going to like the cost of the newest generations of motherboards coming soon.

Fair. The 7000 series GFX missed the mark - efficiency was too low. Somehow, AMD screwed up (I guess they fixed it for RDNA 3.5). 9000 series CPUs also missed the mark. Even after updating to the 'correct' patch for Win11, the delta between the 9000 series and the 7000 series isn't what AMD predicted (the patch helps both processors, so no win there). AMD is hitting it's marks on Server CPUs (Turin) and GPUs (MI 300 series). No help for DIYers. I believe that fundamentally, AMD knows the big $$s are in Servers (Hyperscalers in particular) and potentially massive AI cluster build outs. That's their main focus. We are, maybe, third tier after Server and laptop (maybe 4th after consoles, but that's lower margin).

To the last point, the new Asus Crosshair ROG Hero 870E has become unobtainium for me o_O. Not planning upgrading for another ~1 & 1/2 years; hopefully overall prices will be better (except GFX, which will be even worse).

#240

Super XP

RUSeriousYeah, AMD split off some % of their RDNA team to work on CDNA for the Instinct AI/ML/HPC product line. That was a while ago (don't know exactly when). Seems likely that once RDNA5 is done, the teams will be completely merged into a new UDNA development team. Since Instinct GPUs are chiplets already, it would seem that consumer GPUs would be based off one or more of those chiplets. Interesting times.

I believe AMD already mentioned doing this so they can crank out Discrete + Integrated GPUs more efficiently.

#241

Godrilla

Minus InfinityYet again, stop spreading nonsense. They are only abandoning enthusiast class gpu for RDNA4. RDNA4 is only a minor update of RDNA3, so no way could they compete against 4090 let alone 5090. RDNA5 is a clean sheet architectural update and they are definitely offering enthuisiast clas with that. AMD can't win. Even with the 7900XTX which is 50%b cheaper than 4090 and only 5-20% slower in raster it gets hammered. Everybody laughs about their RT and yet all the commenters say they don't use it much anyway even on Nvidia cards.

The ray tracing party will begin after PS6/ pro when the the hardware will be more affordablish for the masses and developers can squeeze out efficiency from a fixed hardware. Ps5pro should start to improve things and scale accordingly on pc hardware as well.

Update on AMD not having the crown and pointing to past market behavior without reflecting market share gains.
AMD never held the crown for both CPU and GPU at the same time. So the past behavior wouldn't necessarily reflect the mind share gain they would by holding both. It's pretty sad that AMD has to beg developers for support when they hold significant hardware in the consoles, pc handhelds and summation with PC mobile/ desktop parts. It seems that AMD doesn't take themselves seriously and forgot how to be competitive imo!

#242

RUSerious

Super XPI believe AMD already mentioned doing this so they can crank out Discrete + Integrated GPUs more efficiently.

Well, clearly it's not their highest priority anymore. Efficiency for AMD, and all profitable companies, is about the $$s. They will be focusing on iGPUs for the laptop CPUs - those have higher margins. On discrete, they've said they are aiming for 'mainstream' market. AMD is probably going to target lower cost silicon designs so they can get slightly higher margins in the performance ranges they want to compete in. That will provide them with a better cost structure after RDNA5 under UDNA6, etc. I hope that there will be the equivalent of 7800XT performance range as their top product - but we will see. UDNA will be focused first on CDNA silicon, just as Ryzen CCDs are designed for EPYC server needs first.

Huynh, has to demonstrate maximum enthusiasm for a DIY site like TH, it would be marketing suicide not to. We will see what the reality is.

#243

orales_

What AMD must do is fix their software/drivers. I ve been struggling with my 7800xt to make it work .Constant black screens many driver issues that we have to neat pick the best stable driver by trial and error to make the gpu run smooth.That has been so frustrating so far. If you go through amd forums you can see easily what the problem has been .You produce a great value for money gpu/hardware like 7800xt and you destroy it with the software that comes with it.Thats the main reason people give up on team Red .Fix that sector and you will be fire .

#244

azrael

Slightly off-topic, but is it just me or does HUB seem to have it in for AMD recently? It's either "Zen 5 underperforms", "Zen 5 is too expensive", "Zen 5 sales are terrible" or, now, "AMD admits defeat", just because they're trying a different approach. Makes sense, because the previous one hasn't really worked out for them.

#245

AusWolf

azraelSlightly off-topic, but is it just me or does HUB seem to have it in for AMD recently? It's either "Zen 5 underperforms", "Zen 5 is too expensive", "Zen 5 sales are terrible" or, now, "AMD admits defeat", just because they're trying a different approach. Makes sense, because the previous one hasn't really worked out for them.

I advise not giving a damn about YouTube headlines, even those of high prestige reviewers. Clickbait bullshit, the lot of them. Just look at hard review data and decide for yourself.

#246

Godrilla

AusWolfI advise not giving a damn about YouTube headlines, even those of high prestige reviewers. Clickbait bullshit, the lot of them. Just look at hard review data and decide for yourself.

Just like I predicted zen4 x3d is now more expensive than zen5. My 14 month old 7800X3D now has equity and is aging like fine wine.

#247

Godrilla

Update on more blind spots from a second hand used market perspective.

What will happen to the enthusiast level 4000 series in the second-hand market? AMD will also have to compete with that. Just a reminder for every 1 amd gpu sold there are almost 9 Nvidia. The second hand market will have more Nvidia supply than AMD'S rdna 4 gpus.
Used 4080super/4070ti super or rdna4 gpu?
The Midrange will probably be a disaster for the current owners of anything lower than a 4090 in terms holding value unfortunately.

#248

Quells

chrcolukIt would be funny and great AMD releases a mid range GPU that smacks down the 5090 at about 1/4 the price. Nvidia would then probably rather leave the market than cut prices by 75%.

But more seriously, the advantage of this tactic may to be put more pressure on developers to target lower end hardware for their game releases, although will need to grow market share to achieve that level of influence.

It doesn't seem you understand what's being said here. It wouldn't be funny because AMD isnt releasing anything close to a 5090 or even 4090. Their actually focusing on the 4050 4060 and 4070 and just having a better price point. With no developer support. The ppl who want budget builds rejoice but that's about it unfortunately

#249

chrcoluk

QuellsIt doesn't seem you understand what's being said here. It wouldn't be funny because AMD isnt releasing anything close to a 5090 or even 4090. Their actually focusing on the 4050 4060 and 4070 and just having a better price point. With no developer support. The ppl who want budget builds rejoice but that's about it unfortunately

It would be a mid range product and chip size but over perform to the level of a 5090, I didnt think anyone would need an explanation for that.

#250

RUSerious

chrcolukIt would be a mid range product and chip size but over perform to the level of a 5090, I didn't think anyone would need an explanation for that.

No, I don't think so. That would require a huge increase in 'IPC' and/or frequency for the top Bin Navi 48 GPU. Basically, we are talking about a 7800XT class graphics card, but next gen (obvs). It's not going to hit RTX 5090 performance levels on this planet. It's not going to hit RTX 4090 performance levels either. The 4090 outperforms the 7800XT by 1.85x! That is a bridge too far.

Add your own comment

AMD Confirms Retreat from the Enthusiast GPU Segment, to Focus on Gaining Market-Share

272 Comments on AMD Confirms Retreat from the Enthusiast GPU Segment, to Focus on Gaining Market-Share