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

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

#26

AusWolf

BagerklestyneI feel like a question here is, from next generations perspective is 7900XTX performance mid range enough, I don't think so.

I really want to see a 7900XTX (or close to it) with improved RT performance and better power efficiency.

I'd buy a card that's essentially likely to be slower than a 5080 in most/all respects as long as the power efficiency is there and there's a measurable step forward in RT (doesn't need to be nvidia - just close the gap based on raster performance)

I reckon I'm going to be disappointed for some time, which means I'll be sitting on my 6800XT for a while.

It depends on your target resolution and settings, too, I guess. To me, a 7900 GRE/XT level GPU with improved RT for £400-450 sounds great. Add reduced video playback power consumption into the mix, and I've got my next GPU.

#27

ratirt

BagerklestyneI feel like a question here is, from next generations perspective is 7900XTX performance mid range enough, I don't think so.

I really want to see a 7900XTX (or close to it) with improved RT performance and better power efficiency.

I'd buy a card that's essentially likely to be slower than a 5080 in most/all respects as long as the power efficiency is there and there's a measurable step forward in RT (doesn't need to be nvidia - just close the gap based on raster performance)

I reckon I'm going to be disappointed for some time, which means I'll be sitting on my 6800XT for a while.

If AMD started selling 7900 XTX for $300 - $350 as a midrange with improved RT(not that i care about it anyway) I would definitely get one of those no questions asked.

#28

Vayra86

Neo_MorpheusExample, I got a 7900xtx for around 800 and 2 pack in games worth 170, so around 600+ plus, yet very few bothered in buying them, instead went with 4080s and even 4070s.

The worst thing is that 99.9% of the YouTube influencers dont even mention, less show any AMD gpus on their videos.

So potential buyers are not even aware that they have an option.

No, you got a 7900XTX for 800. The games aren't worth 170. They're freebies you otherwise would have never bought for that kind of money, let's keep it real.

Game bundles hardly represent value. Its just nice.

AMD will never win market share by selling game bundles either. The GPU behind it needs to be compelling, not the deal with the games.

ratirtIf AMD started selling 7900 XTX for $300 - $350 as a midrange with improved RT(not that i care about it anyway) I would definitely get one of those no questions asked.

I always love these fantasy comments. 'If AMD would - (insert impossible situation)' I would buy.

Meanwhile, the vast majority instead buys Nvidia at a higher $/FPS price point regardless. I've said it before when AMD focused on 'the mid range' and left the high end behind... Nobody wants to bet on the losing team - even the AMD rep up here in this article doubly confirms it, if you want dev support you need substantial market share, luckily AMD has the consoles and 90% of PC gaming with any focus on strong graphics, is ports. You're either playing for the top position, or you're not playing, quite simply because the mid range is already a known factor. Basically by saying you focus on midrange, you're saying 'next gen, you will see more of the same shit you can already buy today, with minor tweaks'. Well wow, where can I sign up...

Prediction: AMD isn't going to sell jack shit with this strategy for RDNA4, Nvidia will simply undercut them with a better deal, they barely have to make an effort to do so.

BagerklestyneI feel like a question here is, from next generations perspective is 7900XTX performance mid range enough, I don't think so.

I really want to see a 7900XTX (or close to it) with improved RT performance and better power efficiency.

I'd buy a card that's essentially likely to be slower than a 5080 in most/all respects as long as the power efficiency is there and there's a measurable step forward in RT (doesn't need to be nvidia - just close the gap based on raster performance)

I reckon I'm going to be disappointed for some time, which means I'll be sitting on my 6800XT for a while.

Given the average UE5 performance relative to older titles I'd be inclined to agree. There's a strong requirement and demand in the market for faster GPUs. I'm sure there is some architectural low hanging fruit for RDNA wrt Nanite and all, but yeah, I'd expect 7900XTX performance equivalent and then some if they want to keep playing. If they stall on 7900XT performance... this whole stack is DOA. Those people already bought a 4070 (S) or 4060ti at that point, or even a 7800XT.

#29

Dristun

Even with how good RX480 an 5700XT were value-wise, AMD still didn't gain any meaningful market share, so personally I have doubts it's suddenly going to work for them. New marketing team, better sales/distribution department with a budget, bigger software team - are they willing to risk and invest into all this? If not, it's hard to imagine a scenario where just refocusing on any given market segment is a winning proposition.

#30

Bwaze

So people buying midrange gaming cards aren't "Enthusiasts"? To me it sounds like the limit will be much lower than people here equate to "midrange" (slightly below RTX 4090, 5090). And that could be very problematic, because lower tier might be flooded with Intel GPUs - if Intel doesn't decide to exit discreet gaming GPU market altogether in a desperate push to save money...

#31

ratirt

Vayra86I always love these fantasy comments. 'If AMD would - (insert impossible situation)' I would buy.

Meanwhile, the vast majority instead buys Nvidia at a higher $/FPS price point regardless. I've said it before when AMD focused on 'the mid range' and left the high end behind... Nobody wants to bet on the losing team - even the AMD rep up here in this article doubly confirms it, if you want dev support you need substantial market share, luckily AMD has the consoles and 90% of PC gaming with any focus on strong graphics, is ports. You're either playing for the top position, or you're not playing, quite simply because the mid range is already a known factor. Basically by saying you focus on midrange, you're saying 'next gen, you will see more of the same shit you can already buy today, with minor tweaks'. Well wow, where can I sign up...

Prediction: AMD isn't going to sell jack shit with this strategy for RDNA4, Nvidia will simply undercut them with a better deal, they barely have to make an effort to do so.

It is a wishful thinking. Obviously "IF". Will it happen. I have no idea my bet is no.
I dont care what the vast majority buys. That's the majorities problem not mine. I can speak only about myself and what I would want.

#32

Vayra86

BwazeSo people buying midrange gaming cards aren't "Enthusiasts"? To me it sounds like the limit will be much lower than people here equate to "midrange" (slightly below RTX 4090, 5090). And that could be very problematic, because lower tier might be flooded with Intel GPUs - if Intel doesn't decide to exit discreet gaming GPU market altogether in a desperate push to save money...

Enthusiast should be read in these topics as 'More money than sense' ;)

#33

Macro Device

Prima.Veraif people are dumb enough to change every year their phone for a simmilar one

I was like that when I was younger but not because of itch but because I destroyed them way too fast.

The problem with the statement from the OP is if AMD want to push NV then they must do it NOW. Why do they drag this out? It's like... almost a decade without AMD products beating NV in $/FPS or whatever metric by a significant (5 to 10 percent don't count) margin, with only the RX 7700 XT / 4060 Ti being a non-rivalry rivalry. I don't expect anything but more of the same :(

#34

Lewzke

It's time for powerful next gen integrated graphics, I hope AMD will push the middle segment up with APU's, it is not impossible to reach 4060 (mobile version) performance if they use 128MB+ large cache for GPU and 128MB+ cache for CPU or HBM memory. If this will happen even the lower middle segment will be wanished or at least lowered in price ....
In the era of handheld gaming there is no need for low and mid-low segment graphics card anymore.

#35

Neo_Morpheus

Vayra86No, you got a 7900XTX for 800. The games aren't worth 170. They're freebies you otherwise would have never bought for that kind of money, let's keep it real.

Actually, i was happy with the games that i was going to buy anyway, so in my case, i did save 170.

Vayra86Game bundles hardly represent value. Its just nice.

Normally, those bundles are meh, but if it is a good game that you were planning in buying anyways, then yes, it does have value, since you wont spend that extra money.

Vayra86AMD will never win market share by selling game bundles either. The GPU behind it needs to be compelling, not the deal with the games.

I would argue that RDNA3 competes with Ngreedias current offerings except on RT (still haven’t found a definitive reason to care for it yet), CUDA if needed (ROCm is slowly removing that), dlss (FSR is good enough, so im good there) and perhaps the 4090, which in raster and optimized code, a 7900xtx offers a compelling alternative.
So no, its not the offerings, is the mediocre marketing by AMD plus the bribed influencers that keep pushing Ngreedias gpu downs everyone’s throat on a daily basis.

So when someone not that technical see that, they inevitably think that all AMD gpus are absolute trash.

Hell, even more technically adept buyers are falling for it. See how everyone is ok with Ngreedias monopoly, crazy prices and anti consumer practices.

Either way, this will go on for ever since as many times before, you, like others in here, will simply laugh at my points.

#36

Tahagomizer

Is being an "enthusiast" defined by spending an unreasonable amount of money on the most expensive hardware? A weird corporate boot licking dynamic seems to have developed in recent years.

In any way, this seems like a reasonable decision grounded in reality. Nvidia has the top end of the market captive because they simply can sell scraps from their main market to gamers and always come out on top, there in very little R&D required to cook something useful with scraps from the king's table.

#37

Onasi

Neo_MorpheusI would argue that RDNA3 competes with Ngreedias current offerings except on RT (still haven’t found a definitive reason to care for it yet), CUDA if needed (ROCm is slowly removing that), dlss (FSR is good enough, so im good there) and perhaps the 4090, which in raster and optimized code, a 7900xtx offers a compelling alternative.

1. Another point is 3D rendering. I have no idea why, but AMD keeps fumbling that workload to a truly staggering degree. Their Blender performance is pathetic.
2. 7900XTX is a good card, but let’s not kid ourselves. It can compete with a 4080/4080S. Nobody who looks at buying a 4090 and has the money for it would consider it a “compelling alternative” to one. It’s just inferior in every single metric and that is all that particular market care about, price is mostly irrelevant at that point.

#38

TheDeeGee

They've been doing that for years now, since they're 10 years behind NVIDIA.

#39

chrcoluk

Neo_MorpheusAs mentioned by another poster, waffers are expensive and since no matter what they offer, people keep buying Ngreedia, then they are approaching the tier which might given them more returns.

Given how stupid the current devotion to everything Ngreedia these past years, those people will still buy Ngreedia, hence they wont need a price cut. Example, 7900xtx are as good as 4080’s, but cheaper, yet everyone is buying …4080s.

Yes, the RT bs, dlss lockin, etc, but ignore those and you have a good gpu thats ignored.

See my responses above.

Example, I got a 7900xtx for around 800 and 2 pack in games worth 170, so around 600+ plus, yet very few bothered in buying them, instead went with 4080s and even 4070s.

The worst thing is that 99.9% of the YouTube influencers dont even mention, less show any AMD gpus on their videos.

So potential buyers are not even aware that they have an option.

I think it is rude to call people stupid personally, one of the big reasons all my recent GPUs are Nvidia is SGSSAA, AMD are free to add that as a feature in their drivers.

I think AMD did succeed in making Nvidia do a stealth 4080 price cut, via the 4080 Super refresh.

#40

Ruru

S.T.A.R.S.

Ah, so they do the same what they did with Polaris before. Leather jacket man will increase the prices on the high-end market, so not a good move.

edit: Now when I looked at other posts, this isn't a dumb move, like said on this thread, this segment is where the most consumers are.

cerulliberAm I only skeptical here ? Have 500€ for october november releases on the table. I doubt rdna4 can have good drivers. I had rx 6700 10gb wich was DOA and an rx 6600 8gb which I could not found stable settings. Let alone power consumption, raytracing and upscalling, I doubt amd can compete with nvidia on midrange on click-to-play experience, as both nvidia and amd owner.

Never had any issues with my 6700 XT, the only instability has been when I was looking the lowest possible undervolt for the GPU.

#41

Markosz

Sounds good, majority of people buy 4070 tier or lower card anyway, in which AMD is somewhat competing.
But to truly gain market share, they need to cut prices hard, not just follow Nvidia pricing minus 5-10%, because that's not enough to convert people even if it's objectively better value.

#42

Pumper

ratirtIf AMD started selling 7900 XTX for $300 - $350 as a midrange with improved RT(not that i care about it anyway) I would definitely get one of those no questions asked.

In other words, while nvidia is selling their GPUs at 70% profit margin, you want AMD to be selling theirs at manufacturing costs?

#43

ratirt

PumperIn other words, while nvidia is selling their GPUs at 70% profit margin, you want AMD to be selling theirs at manufacturing costs?

How do you know it is a manufacturing cost when AMD clearly stated, they are going for the mid range for masses. The only way it could attract an audience is to sell it cheaper. I'm sure they have a plan to cut the costs etc. to make it that way. I dont know what the price will be. I stated only, (not demanded) what would work for me. What price I would be looking at as attractive to me. If it turns out the price is higher then so be it.

#44

Neo_Morpheus

Onasi1. Another point is 3D rendering. I have no idea why, but AMD keeps fumbling that workload to a truly staggering degree. Their Blender performance is pathetic.

Blender devs themselves only targeted Ngreedia and didnt do any optimization for AMD gpus for a while. Some people even speculated it was due to being fanbois.
Last time I checked, they started using ROCm and that has improved the software.

Onasi2. 7900XTX is a good card, but let’s not kid ourselves. It can compete with a 4080/4080S. Nobody who looks at buying a 4090 and has the money for it would consider it a “compelling alternative” to one. It’s just inferior in every single metric and that is all that particular market care about, price is mostly irrelevant at that point.

I hate the fact that AMD used the 9 moniker, since everyone thinks that they are competing with the 4090.
That said, its stupid to ignore the fact that in many (not all) benchmarks, the 7900xtx is around 15 to 20% slower but can cost up to ~~100%~~ 50% less.
That’s assuming best case scenario in pricing for AMD (800 in my particular case) to 2k for the 4090 (worse case for Ngreedia when msrp prices weren't available)

chrcolukI think it is rude to call people stupid personally

Please read my comment again.

chrcolukI think AMD did succeed in making Nvidia do a stealth 4080 price cut, via the 4080 Super refresh.

And everyone bought…4080 Super, instead of 7900xtx.

Which bring us back to the hypocrites asking for AMD to compete. They will not buy an AMD gpu regardless of how good it is. All they want is for Ngreedia to cut prices so they would get their beloved Ngreedias gpus cheaper.

#45

KLMR

Its simpler than that.
For the same die size (and yield) of a BIG consumer GPU they can produce a BIG professional product and ask for it 3-5 times more.
After all they have a limited production window (TMSC) in time and units.
Smaller die size are more productive and have higher yields: that lets them keep market share, be competitive in the console market, etc.

#46

Bwaze

Neo_MorpheusI hate the fact that AMD used the 9 moniker, since everyone thinks that they are competing with the 4090.
That said, its stupid to ignore the fact that in many (not all) benchmarks, the 7900xtx is around 15 to 20% slower but can cost up to 100% less.

I'd buy a truckload of cards that perform 15 to 20% slower than 4090 and cost 100% less.

:p

#47

chrcoluk

Neo_MorpheusAnd everyone bought…4080 Super, instead of 7900xtx.

Which bring us back to the hypocrites asking for AMD to compete. They will not buy an AMD gpu regardless of how good it is. All they want is for Ngreedia to cut prices so they would get their beloved Ngreedias gpus cheaper.

That is how competition works, it affects prices, but it doesnt necessarily mean everyone buy a specific product.

#48

Onasi

Neo_MorpheusBlender devs themselves only targeted Ngreedia and didnt do any optimization for AMD gpus for a while. Some people even speculated it was due to being fanbois.
Last time I checked, they started using ROCm and that has improved the software.

…no, nobody sane speculated that Blender developers are “fanbois”. That’s a ridiculous take. They have started implementing HIP as soon as it became available (based on ROCm, yes), it’s just that a lot of features turned out to be actually a challenge to implement (like HIP RT) due to the API being incredibly raw and having issues. To quote one of Blender contributors - it’s a bit like pulling teeth. OptiX, on the other hand, mostly seamlessly was plopped down on top of existing CUDA support because it just worked. I know people have a hard time accepting this, but NV IS actually pretty damn good at the whole “support for the software side of things”.

#49

chrcoluk

Well maybe AMD get SGSSAA for one game :D

Its officially being put in a game. Falcon engine used for it.

#50

Onasi

@chrcoluk
That’s just Durante and his PH3 experimenting with cool ideas and dabbing on the so-called AAA porting efforts as usual. Sadly, we are unlikely to see anything similar from big budget PC ports, you will eat poorly optimized blurry upscaled slop and like it.

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

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