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

[btarunr]

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.

View at TechPowerUp Main Site | Source

 

[Daven]

It’s important to point out here that we are talking mainstream performance in the NEXT gen which means high performance in the current gen.

AMD cannot release 7800xt performance levels as the max RDNA4. The highest SKU needs to tie or beat 7900XT levels which would move down a peg in the next series typically.

 

[AusWolf]

I understand that the midrange is where most of the money is, and therefore, focusing there is a good idea, but how would releasing a high-end chip eat into it? Would it take the development time away from other projects?

Perhaps a bottom-up instead of top-down approach would be good. That is, instead of developing a big chip and cutting it up for lower tiers, maybe they could make a small and efficient midrange chip, and scale it up for high-end?

 

[chrcoluk]

It 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.

 

[wolf]

Hopefully this results in another absolute banger, like the 5870, RX480, or 5700XT (some issues not withstanding) that sells like hotcakes and not only gains market share but lifts AMD's image in the GPU market. There is an absolute killing to be made in the sub $500 USD arena if they can market and execute well.

 

[64K]

I understand that the midrange is where most of the money is, and therefore, focusing there is a good idea, but how would releasing a high-end chip eat into it? Would it take the development time away from other projects?

Perhaps a bottom-up instead of top-down approach would be good. That is, instead of developing a big chip and cutting it up for lower tiers, maybe they could make a small and efficient midrange chip, and scale it up for high-end?

One reason is that AMD doesn't have limitless access to wafers. They can only get so many so they want to focus that supply on the greater majority of consumers. They are doing the right thing from a business perspective. It just won't scratch the itch for AMD fans that want to see AMD with the fastest GPU out there.

 

[Hyderz]

if amd wants the market back to 50%
why not release a powerful gpu for the ps6 along side one for the pc segment and deliver great ray and path tracing
that way they maximize utilization of the wafers

 

[Prima.Vera]

Prepare for 2000$+ video cards from nGreedia. /facepalm.
Well, if people are dumb enough to change every year their phone for a simmilar one, then they are probably dumb enough to pay nGreedia's callous prices too, so...

 

[Onasi]

It’s a good strategy on paper, as people already pointed out - that’s what drove the success of 5870. Problem is, it also required somewhat of a fumble on NVidias part. Since I assume this go around NV isn’t going to mess up and they also, despite all the talk about “2000 bucks flagship”, will have products at all price points, AMD has to have something truly compelling to actually grab that market share. The “like NV, but slightly worse on features and 10-15% cheaper” hasn’t worked for them so far.

 

[zenlaserman]

It’s important to point out here that we are talking mainstream performance in the NEXT gen which means high performance in the current gen.

AMD cannot release 7800xt performance levels as the max RDNA4. The highest SKU needs to tie or beat 7900XT levels which would move down a peg in the next series typically.

Who is 'we'? You have an association with those folks? You part of their company? Being a consumer doesn't mean you are an expert at anything you might consume or presume to. Check your pant size.

Who says they cannot release what they release? You? Who are you? Your credentials are severely lacking for what you are saying in the way you are saying it. Actually I guffawed at your post.

So much entitled elitism in this forum, it's really funny when it comes from an ultracrepidarian in the form of a dingleberry latching onto the balls of a company. Do you even own stock in AMD? lol

-----------------------------------

I think it's the obvious move for AMD, they have 2 proverbial irons in the fire against 2 companies that have bigger one in each. They got lucky on the CPU front, it would take a miracle to catch nV.

Looking forward, how responsible is it for folks to use a 50+ billion transistor 400+ watt GPU just to play pretty games, anyway? I ask this as a guy who's been gaming since 1980. Game devs are irresponsible for the bloat that is modern games, and end-users are just driving it, IMO. Gamers tend to be selfish!

 

[qcmadness]

It’s a good strategy on paper, as people already pointed out - that’s what drove the success of 5870. Problem is, it also required somewhat of a fumble on NVidias part. Since I assume this go around NV isn’t going to mess up and they also, despite all the talk about “2000 bucks flagship”, will have products at all price points, AMD has to have something truly compelling to actually grab that market share. The “like NV, but slightly worse on features and 10-15% cheaper” hasn’t worked for them so far.

NVIDIA will not stand still.
It will adjust the pricing according to AMD to maintain the 10-15% pricing lead.

 

[KrazyT]

Prepare for 2000$+ video cards from nGreedia. /facepalm.
Well, if people are dumb enough to change every year their phone for a simmilar one, then they are probably dumb enough to pay nGreedia's callous prices too, so...

There is a good point for "normal" people : the 2nd hand market !
Let people buy high end stuff, wait for a year, and buy it 2nd hand for a fraction of the price.

 

[AusWolf]

It 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.

Devs have to target lower end hardware anyway as long as we don't have a 4090 in the PS5.

One reason is that AMD doesn't have limitless access to wafers. They can only get so many so they want to focus that supply on the greater majority of consumers. They are doing the right thing from a business perspective. It just won't scratch the itch for AMD fans that want to see AMD with the fastest GPU out there.

I agree. My own target is midrange anyway, so I don't mind.

 

[Dragokar]

I do understand this Interview a bit different since he said they will care about the enthusiast user but not the flagship stuff for now.....since for me a 500€ GPU is kinda enthusiast I am okay with that.

In the Polaris time they had way more influence than they have now and if they use this strategy to move up gradually thats fine for me.

I also would love to see rx7900xt raster performance (4070ti RT performance) within the 250w envelope with the 8800 series. Priced at Max 500€ ofc. Also some really nice 180-350€ offerings with 8700/8600.

That would be lovely.

 

[chrcoluk]

Devs have to target lower end hardware anyway as long as we don't have a 4090 in the PS5.


I agree. My own target is midrange anyway, so I don't mind.

Well black myth we can see on the PS5 DF analysis is a bit of a mess, it doesnt run at a consistent frame rate in any of its modes, and was clearly targeted at more powerful hardware. It also dips outside of VRR range (PS5 doesnt fully implement VRR) so VRR doesnt save it.

To clarify what I mean by targeting lower end hardware is a game can run at 60fps 1080p/1440p without any DLSS/FSR/FG type feature on a console and on a mid range or lower GPU without needing trash quality settings.

Even with games that run ok on console, they can often need much more grunt to run as well on the PC, as the optimisation is targeted at flagship most of the time.

 

[Neo_Morpheus]

I understand that the midrange is where most of the money is, and therefore, focusing there is a good idea, but how would releasing a high-end chip eat into it? Would it take the development time away from other projects?

As 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.

It 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%.

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.

Hopefully this results in another absolute banger, like the 5870, RX480, or 5700XT (some issues not withstanding) that sells like hotcakes and not only gains market share but lifts AMD's image in the GPU market. There is an absolute killing to be made in the sub $500 USD arena if they can market and execute well.

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.

 

[kondamin]

So this could interpreted that gaming gpu performance will be stagnating even harder and that we will be stuck at mid GeForce 3000 series performance for an other 4 years.

tiny ray of hope is battlemage.

 

[Kyan]

Who is 'we'? You have an association with those folks? You part of their company? Being a consumer doesn't mean you are an expert at anything you might consume or presume to. Check your pant size.

Who says they cannot release what they release? You? Who are you? Your credentials are severely lacking for what you are saying in the way you are saying it. Actually I guffawed at your post.

So much entitled elitism in this forum, it's really funny when it comes from an ultracrepidarian in the form of a dingleberry latching onto the balls of a company. Do you even own stock in AMD? lol

-----------------------------------

I think it's the obvious move for AMD, they have 2 proverbial irons in the fire against 2 companies that have bigger one in each. They got lucky on the CPU front, it would take a miracle to catch nV.

Looking forward, how responsible is it for folks to use a 50+ billion transistor 400+ watt GPU just to play pretty games, anyway? I ask this as a guy who's been gaming since 1980. Game devs are irresponsible for the bloat that is modern games, and end-users are just driving it, IMO. Gamers tend to be selfish!

It's just a way of talking about us, tech enthusiast, and people who will read this in general. You have just read too deep in those two letter.
I totally agree with you on the second half. There is a big step in the optimisation that needs to be redone and not only counting on our very advanced technology. I'm always impressed that we have those thing in our hands, used by majority of humanity (I'm not only talking about latest tech but even 10 years old tech). That's crazy from multiple point of view.

On topic, I'm kinda curious to see if they can finally hit the spot in the mid/high-mid range. We will see if it will reduce even slightly the price of gpu.

 

[wolf]

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.

Doesn't help that the 7900XT launched with a stupid, nonsensical price to upsell the XTX, and all the reviews I saw didn't recommend it at the 900$ MSRP for good reason, it didn't make sense to buy it. If it launched at 800 USD or less it would have sold more without question, but instead AMD fumbled that and then quickly lowered the price anyway, but the perception damage was done.

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 don't know about "influencers" but the techtubers I watch review both AMD and Nvidia hardware and are very fair to the merits and shortcomings of both, the biggest entity that can help AMD sell more GPU's is AMD. I don't watch any content creators that only cover Nvidia and fail to cover AMD/give them a fair shake, and I don't want to. If AMD gets the marketing and lead up right, then launches good, well rounded products at attractive prices, they will sell. The sub 500 USD market is foaming at the mouth for compelling options.

 

[GerKNG]

Sounds reasonable to me.
Just because Jensen would love to sell a RTX 5090 Ti for 4000€ doesn't mean you have to play along. Considering the prices of GPUs nowadays... I welcome this decision.

 

[Luminescent]

That's what you get when your innovation is mostly TSMC new node.
You have to respect Nvidia's tireless competition and innovation that seemed gimmicky at first but look who's laughing now.
Let's get ready for 1000$ midrange gpu's.

 

[Neo_Morpheus]

Doesn't help that the 7900XT launched with a stupid, nonsensical price to upsell the XTX, and all the reviews I saw didn't recommend it at the 900$ MSRP for good reason, it didn't make sense to buy it. If it launched at 800 USD or less it would have sold more without question, but instead AMD fumbled that and then quickly lowered the price anyway, but the perception damage was done.

Dont get me started on that one…

Hell, the whole lineup was simply a mess.

In my book, all Radeon 7K gpus needed to be named one tier less and priced accordingly. Example 7900xtx should be 7900 xt, the 7900xt should be either 7900 or 7800xt and so on.

About the price correction of the 7900xt, thats one of those “excuses “ used by the current buyers, whom for some “weird” reason conveniently ignored the same thing on Ngreedias part. Like the price jump from a 3080 to a 4080.

I don't know about "influencers" but the techtubers I watch review both AMD and Nvidia hardware and are very fair to the merits

I wont list them all, but i have completely dropped Ngreedia Unboxed. Especially if the video is headed by Tim.

See how easily the use “DOA” on any AMD reviews or the time that Tim published 3 hit pieces against AMD because it was rumored that AMD strictly forbid the use of dlss. And no, i dont think he ever published a video apologizing for that.

On the subject, I recall rumors that RDNa4 is a “error” correction/update of RDNa3 kind of deal and the real replacement will be RDNA5.

 

[ratirt]

If AMD targets the mid range, what we are supposed to take from that?
Which would be the mid range card for the next gen? Is it the 7900 xt? The 7900 xt was $799 at release and it was quite a bit for something of that caliber.
What would be the price for the mid range of that caliber? Is $400 OK? It is still a mid range.
If AMD can sell 7900 XT performance for a $300 with the RDNA 4 arch I will be willing to buy it. $350 to consider

 

[Chomiq]

Brave move, let's see how it plays out.

 

[cerulliber]

Am 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.