Updated July 15th with Additional comments from Ted PollackSenior Analyst at John Peddie Research.
High-end PC games will be in good health as they recover from the supply problems that have plagued our hobby for the past 18 months. There is a certain note of optimism in the latest PC gaming hardware report from the company of respected analyst, John Bede Research, praising the revival as something to celebrate.
And yes, the prospect of actually being able to get a new high-end graphics card will undoubtedly be welcome to many silicon-hungry PC gamers. JPR expects steady growth of the high-end device market to a high of $45 billion in 2024 from a starting point of just over $20 billion in 2020.
Hooray, then. The drought will soon be over and we can all be satisfied that the graphics card of our dreams will be just a click away and not at the end of a string of bots and a massively inflated sticker price on eBay.
Except for a severe note of warning in the introduction to this report as well, noting supply issues that:
“Gamers on medium budgets can’t always get what they need, and new entrants may sometimes put off, or worse still, abandon the platform or adopt a hobby. New entrants are very important to the long-term health of any gaming platform.” A stark warning to companies Hardware in the PC gaming business that long-term growth is dependent on availability and affordability of products to mass market consumers.”
And modern, high-end GPUs certainly aren’t within the reach of the vast majority of us.
If you’re trying to find a mid-range graphics card, now you’re out of luck. As companies struggle to get what looks like stock on the shelves, they are focusing on high-margin, high-end cards, because they know those cards will sell. And because you know, capitalism.
Almost every day on r/nvidia, there’s another shot of shelves at Micro Center or Best Buy filled with either GeForce RTX 3080 Ti or GeForce RTX 3090 cards, which you can’t call “handy” in anything but the physical sense.
This may not just be a short-term situation, either. JPR’s president, John Bede himself, stated that because “high-end graphics cards (extra motherboards) maintain their MSRP well and can be sold as mid-range products for years after production. This may encourage manufacturers to aggressively stock high volumes — ending inventory levels to prevent what we’ve seen happen. Since the start of the COVID-19 lockdowns.”
This can be disconcerting for those of us who can’t spend $700+ on a new GPU and have come to rely on regular champions like the AMD Radeon RX 5500 XT or GeForce GTX 1650 Super for our gaming platforms.
Traditionally, those types of graphics cards under $200 have been the big deal for manufacturers, and cards made in larger numbers because they’re always sold in larger numbers too. But if manufacturers start hedging their bets about future supply issues by overstocking high-end GPUs instead, budget PC gamers will be left out.
Additional Comments by JPR
However, Ted Pollack, the report’s author, explained his thoughts to us, noting that JPR expects “eventually additional stockpiling…not at the expense of the mid-term segment.”
Manufacturers may be stocking high-end graphics cards aggressively as well as more affordable GPUs, but if the current inventory shortage has taught us anything it’s that if there are only high-end options, that’s what to buy. However, this can be dangerous knowledge, and potentially ruinous for the hobby if manufacturers take this short-term effect as a permanent condition.
But it also feels like something coming from top to bottom. Where are the RTX 3050 or RX 6600 cards from, say, Nvidia and AMD? When you have a limited number of GPUs you can manufacture with Samsung and TSMC respectively – and all of the expensive, high-margin units that you do make – you won’t take a portion of that supply to make the same instead of cheaper cards.
Pollack reiterated Peddie’s statement that “high-end cards, if not sold, could be sold as mid-range cards after a year or more. That’s going to store things a little bit. And that might affect the company’s margin a little bit. In the GPU part of their business, but if they can’t, Providing all the parts needed in a crisis, their entire business margin is in trouble.”
Which makes sense from a long-term standpoint. But it’s worth remembering what happened the last time there was a GPU shortage and Nvidia and AMD ramped up supply of cards to compensate. Both were left carrying a ton of unwanted GPUs when the demand for cryptocurrency waned, driving later generations back somewhat as they tried to lower stock levels.
It remains to be seen if manufacturers will be willing to hold additional high-quality stock after the launch of the next generation of GPUs. It certainly wasn’t the approach last time.
But times are different now. Exactly how far I think we’ll see when the true mainstream GPUs of this generation are released. If there is a large stock of these cards along with high-end cards, we will know that manufacturers are ready to take the potential blow.
In the end, despite the lack of supply He is That’s it, it’s still going to take some time for the industry to get back to normal in favor of PC gamers on tight budgets. Well, fingers crossed it finally normalized anyway.