Monday, September 9th 2024
AMD Confirms Retreat from the Enthusiast GPU Segment, to Focus on Gaining Market-Share
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
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."
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.
272 Comments on AMD Confirms Retreat from the Enthusiast GPU Segment, to Focus on Gaining Market-Share
P.S.: I could not join the forum when I was in the Philippines on the grounds that (not exact quote) the forum Admins have disabled users with IPs from the Philippines from joining. Since this post will have to be approved by a Mod, they might as well relay this to the Admins in case this was done in error.
I'm not knocking anyone. It's fun to tinker with and talk about cutting edge hardware. I've succumbed to the urge myself. But looking around at the state of modern gaming, I find myself increasingly bemused by the impassioned arguments you see here and elsewhere. There are tens of thousands of older/indie games out there, available cheap and at the press of a button. Pretty much all of them can be played at reasonable quality with any mid-range GPU made in the last 6-7 years. Many of them are even fun. And yet we sit here wringing our hands over comparatively minor performance differences in every new, buggy, insipid, carbon-copy corporate garbage fire. Rinse and repeat.
Sure, the benchmarks and screenshots can look impressive, but once you've gotten past the rush of tweaking/benchmarking, are you really going to enjoy playing it? Probably not. Instead you'll do what I've done so many times in the past--shelve the game and return to your tech-enthusiast forum of choice to debate/dissect the flow of the protagonist's hair in scene #15 with FSR vs DLSS, or whatever. The truth is that the current gaming market is great, but only if you unplug from the FOMO treadmill. Fortunately or not, that step requires a hard look at the real value of newer hardware, each successive generation of which unlocks a smaller proportion of games than the last, and vastly diminished returns in terms of graphical fidelity, which more or less plateaued quite some time ago.
I love Gaming and AMD has rewarded me with discernable performance improvements. I checked my M2 and realized that the pads I was using were too thick so I replaced them and the screw was able to go into the hole. The price I paid for my entire PC(CPU, GPU, MB) is still less than a 4090 but I love storage as my first PC was a TRS80. It was striking watching the PC world podcast with Tom's Hardware at CES (Ii think) and Adam talking to the head of the site and talking about options vs the 4090. When he mentioned the 7900XT and saw Adam's face he had to remind him that the 7900XT is 7% slower than the 7900XTX so it is fine for 4K. I have seen that even some TPU staff love to rag on AMD like Intel or Nvidia even though those Companies are not paragons on the community are as open to the PC community with AMD. Just look at Linux support 4 years ago.
Now the truth and the narrative are so messed up that AMD has to focus on Ray Tracing even though they have caught and passed Nvidia on raster below the 4090. What sucks is that 100% of Games depend on raster but only AAA focus on Ray Tracing. I love when they bash FSR for being open.
It's just like iPhone and Samsung Galaxy S aficionados looking down on others with cheap Android phones, despite the fact that they just scroll Facebook on them all day and night like the rest of us peasants.
Or like people bashing me for running my RAM at JEDEC standard 4800 MHz to save 10 W and 5 °C on the CPU because running it at EXPO 6000 MHz would gain literally zero perceptible extra performance.
As players like me want a well performing gaming system [ self bulld ]
But without massive power usage and still has very good performance in games
And even though i have serious issues with my current AMD build (probably memory kit related)
But i am happy with the insane performance it gives me in games
With 3dmark benchmarks this little red AMD devil stunned me also with fps sometimes far over 400
Not that i care much about benchmarks ( i gave in to a friend who wanted to see if my system scored higher than his pc almost same but with newer 7700 xt (lol) ) result i beat his system in every way possible
When 3dmark worked i was stunned again to see my little red devil was in the top 100 for my cpu
That was unbelievable to me first time ever in between mid/heavy overclocked systems with a simple installed system
Nowadays one person is claiming all spots with the same system but that is 3dmark
Anyway my system is a simple pc in a nice white case with wooden top
Running on W10
Cpu: 7800X3D no OC allowed by me :D
Gpu: Asus TUF RX 6800 gaming oc (clocked at base speeds so again no oc allowed)
Mobo: Asus proart x670e creator wifi 10 Gb lan in use ( needed for mass storage / 10 G card with 2x 800 Gb buffered synology toy )
I use it also to look at my backupped movie disks from the nas (i own all of them on DVD/BR disks)
Memory 32 Gb set g.skill 6000 << to me seems the culpritt of my problems
Boot : WD black SN850X 2 TB
Game store : Lexar NM790 4 TB
big storage : usb c case with toshiba hdwr21c, 12 TB disk for mass storage and backups ( can reach up to 400 mb with proper usb-c high speed port
So nothing fancy anymore with the high price machines as this little devil made me open my eyes about AMD
They make products which simply work and am pretty darn fast with much less power usage
So GOOD JOB [ AMD ]
Regardless of arguments about intent, there is a collusive element involved when a company that has the means to compete chooses to relinquish a product space to a competitor that will undoubedtly raise prices, a move that enriches the relinquisher — as prices are increased from top to bottom (and vice-versa).
Put simply: It's in AMD's interest to maintain the "Polaris + consoles forever" strategy, as long as it can allocate the production volume and other investments that would go toward higher-end consumer products (i.e. consumer GPUs like the 4080 and 4090) toward other products that are at least equally profitable. It's in AMD's interest not just because there is potential to increase margin by using finite resources for product production that has more profitability (i.e. enterprise). It's in AMD's further interest when Nvidia can artificially increase pricing for consumer products that AMD continues to offer. By not competiting with products like the 4090, AMD gives Nvidia the ability to artificially increase pricing, which trickles down the entire stack. This has the beneficial (for AMD) side effect of increasing the relevance/competitiveness of consoles, in addition to enabling AMD to increase its margin for its "midrange" stand-alone GPUs.
Setting aside likely fruitless arguments about the kindness of corporations (they're unkind by definition, unless you're a shareholder, CEO, etc. — as, by design, they are non-living entities that relentlessly ruthlessly conspire to obtain as much profit as possible, which means providing as little value to consumers as they can get away with), the problem here is duopoly. Monopoly, duopoly, and similar examples of inadequate competition result in shenanigans that artificially increase pricing and slow innovation. Someone argued that the additional income helps a corporation have more R&D money. That's true but only to a point. It does not solve the defects of inadequate competition. The less competition, the less pressure to invest in R&D and — especially — to give consumers the fruits of that R&D expeditiously and affordably.
Intel has not done a good job, as yet, of trying to break the duopolistic situation. What is needed is additional competition at the high end of the consumer GPU market. A corporation needs to challenge Nvidia at the 4090 level (and, soon, the 5090 level). Only when pricing is less artificially inflated at the higher end (including the 4080 level), will pricing become fairer throughout the stack.