At what point do you think the R9 285 was at all competition for the GTX 970 or 980? Its like saying the GTX 750ti was competition for the R9 290X, it was not even in the same category and was intended to fit into the area of mid range and replace the old mid range cards which a new architecture introduction. Which is exactly what it did, lower power consumption and more
performance than the card it replaces...
The GTX 980 price point is not that bad but it seems horrid because the GTX 970 is at such a low spot. The GTX 970 is the real winner card here and seems to be the choice card right now. Its seated right where its expected to be considering its better overall than the GTX 780ti which costs more while using less power and containing more ram. Its an overall excellent launch.
From an design standpoint, the r9 285 is the competition for gm204 or the gtx 970 and 980. If you didn't know, Tonga cards are part the first of a new series of cards called pirate islands which is analogous to Nvidia's maxwell cards.
What makes r9 285 or the tonga chip the direct competitor to gm204 is they both will be the second biggest chip in the product stack. In addition, these two chips will probably have the closest die size compared to other chips around them for this uncoming generation. Having the same chip size also means, the GPU themselves cost a similar amount to produce.
Financially, what this means is Nvidia can charge more for their gpu chips for something that costs them a similar amount to produce as Tonga. This is a technological advantage that is producing a financial one.
The problem for AMD is the gtx 970, is shaving between 150 dollars off the profit margins of their chips and with these prices dropping, the rest of AMD product stack has to drop in price(a r9 285 doesn't make sense at 250 if an r9 290x is 299) to the extent where they might not make any money, atleast to recover the R and D they spend on it.
980 is nice card but wow some people have short memories.
AMD is already building a competitor for the 980X. When the 7970 came out, it was much better than the 580 "Oh no Nvidia is fucked" Then Nvidia release 680 a few months later 10% faster than 7970. Then AMD release the 7970 Ghz, same or better than 680Then Nvidia release 780 "oh no AMD is fucked" Then AMD release 290X matching 780 performance. Now Nvidia release the new generation 980 and "AMD is fucked again" even though AMD is already manufacturing a competitor.
You cant compare old gen to new gen. AMD and NVidia never release new generations at the same time, usually a few months apart.
4870 vs 280,same gen 4890 vs GTX285
5870 vs 480
6970 vs 580
7970 vs 680 same gen 7970 Ghz edition
290X vs 780 same gen 780Ti
390X vs 980 Hasn't happened yet
If there is some inside knowledge about the 390X, not being able to compete with 980 please let us know, otherwise its too early to write off AMD.
To reiterate the above, the 390x is going to be facing not facing the gtx 980, it will be facing the gm200 or 210 which is big maxwell.
390x or Fiji will be the replacement for Hawaii or 290x, 285 or Tonga will be the replacement for tahiti or 280 chips, For Nvidia, the gtx 980 is the replacement for the gtx 680 and the gm210 is a replacement for gk110 chips.
What this means is for cards sold above 200 dollars, AMD will be making cards using Tonga and Fiji while Nvidia will be making chips using gm204 and gm210. This yields two problems for AMD, since Tonga and Fiji are relatively new products to upcoming products, they can't drum up nee GPU in that product range in the near future. New chips take a while to produce and if the cards are not competitive against the competition, they have to take a price hit and wait a long time for the next generation to be developed to get back in the game. The second problem compounds this. Since gm204 chips smash Tonga chips, their big brothers, which are based on the same architecture are likely to have the same relationship(what also helps this prediction is gm204 and Tonga are so similar in size and power consumption). Meaning gm210 chips should smash Fiji or 390x chips.
Atleast gtx 680 and 7970 were very competitive with each other, so its not a surprise that their big brothers gtx 780 ti and 290x were competitive with each other. However the same cannot be said of Tonga and GM204. The 75 percent difference is massive(techpowerup charts).
If Fiji chips are uncompetitive with gm210 and are closer to performance to Nvidia gm204 chips like the gtx 980 or 970, their prices will have to reflect that. The problem is rumors suggest all in one cooling(expensive), big expensive 500mm2 + chip, high power consumption(complex board, with more expensive electrical components) which leads to a very expensive card to produce. If gtx 980 performs similarly to Fiji or 290x, all Nvidia has to do to kill the margins is drop the gtx 980 price a to 450 dollars and AMD is making no money(and will lose money from R and D expenditure). Nvidia will still make money on this price considering AMD is able to sell Tonga at 250.
AMD cannot afford to lose any more money. Their cash on hand is below what their threshold for operating is and their R and D budget has shrank(the whole companies R and D is more than 20% lower than Nvidias who doesn't research desktop CPU's) and real estate assets have been sold to prevent a bankruptcy.
AMD will remain open, they are resiliant and have the console program which is just enough to pay their debt interest. But they may be forced to contract further which could hurt their long term ability to compete.