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I still think it would have been neat experiment for nvidia to auction 3000 series instead of attempting traditional sale channels. At least then the profits wo

by zokier 6y ago

I still think it would have been neat experiment for nvidia to auction 3000 series instead of attempting traditional sale channels. At least then the profits would go in the pockets of nvidia instead of scalpers. And if miners are willing to bid exorbitant sums then let them fund more gpu r&d then, eventually nvidia should be able to push the production quantity higher one way or another.

drewg123 6y ago
Indeed, I hate that the MSRP is far below the market determined pricepoint. The invites shortages and opens the door for scalping. I have been trying to get an Xbox Series X for months. I would like to have a new one, with a warranty. However, I finally gave up and "won" one with a $606 bid on stockx.com. After fees, shipping, etc, its close to $170 over the unrealistic $500 MSRP, which just shows how out of touch the MSRP really is.
- clankyclanker 6y ago
  > I hate that the MSRP is far below the market determined pricepoint. The invites shortages and opens the door for scalping. For some reason, this combination of sentences confuses me. The scalpers determine the market price by buying almost the entire volume. The only way to beat scalpers is to raise prices beyond what people are willing to pay, which forces scalpers to charge more to turn a profit, further raising the total price. I guess I don’t see how an initially higher price would stop scalpers at all, they’d just keep buying the entire stock, anyway.
  - thaumasiotes 6y ago
    > The only way to beat scalpers is to raise prices beyond what people are willing to pay, which forces scalpers to charge more to turn a profit, further raising the total price. No, this can't happen. If you raise prices beyond the market-clearing point, scalpers would need to charge prices higher than that -- and sell all their inventory -- in order to turn a profit. This can't be done; the higher prices prevent them from selling everything they bought. > I guess I don’t see how an initially higher price would stop scalpers at all, they’d just keep buying the entire stock, anyway. Again, this can't happen. Scalpers are not able to keep buying products they can't sell. You can only buy the entire stock if your revenue from selling the amount you can sell exceeds your cost of buying the entire stock. Exceeding your cost of buying the amount you can sell isn't enough. Your economic model implies that all goods are controlled by scalpers who can never be dislodged. That's not even close to the truth. Why do you think that might be?
  - imtringued 6y ago
    What you are describing isn't scalping. Scalping isn't about buying the entire supply. That's something completely different, namely market manipulation and this requires a huge amount of capital and you are not guaranteed to sell all your stock which makes it highly risky since the artificial demand could be outstripping regular demand. If you buy 100k GPUs and consumers only want to buy 75k GPUs then you would be stuck with 25k in this market manipulation scheme. However, since there is actually more than 100k demand for GPUs there aren't enough GPUs for regular customers. Meaning that a large portion of consumers are actually getting ahold of GPUs which would make it impossible for market manipulators to buy the entire supply. You can't have both things at the same time. You can't be angry that stupid idiots get stuck on inventory because you aren't actually buying GPUs while at the same time being angry for there not being enough inventory because people are actually buying GPUs. The reality is that people are buying GPUs and thus there is a lack of supply. Scalpers try to get ahold of the supply and auction it of fairly so that anyone who wants a GPU can get it since Nvidia failed to make sure that everyone who wants a GPU can get it. >The only way to beat scalpers is to raise prices beyond what people are willing to pay, which forces scalpers to charge more to turn a profit, further raising the total price. I guess I don’t see how an initially higher price would stop scalpers at all, they’d just keep buying the entire stock, anyway. As I said, if scalpers keep buying the supply while nobody wants the GPU they will simply be stuck with the excess stock and since they are in it to make money they will be forced to sell the GPU at market rates which is a net loss for them since they bought above market rate and a net gain to Nvidia. For the customer there is no difference.
Proven 6y ago
That recipe should get you a lot of upvotes in topics related to the recent price of electricity in Texas :-)
Exmoor 6y ago
I'm assuming they don't want to look like they're profiting on a shortage, which could also make the shortage look intentional. One workaround would have been to set up a system where the additional profit from auctioned GPU's went to charities.
- Scoundreller 6y ago
  Which is such a very good idea since they’ll often capture a significant percentage back on their taxes.
tw04 6y ago
And then what happens to their channel sales partners who survive off events like GPU and CPU launches? They just go out of business? Also: Nvidia couldn't increase production quantity if they wanted, this isn't a money problem. The only way for them to produce more GPUs at this point is to build fabs, and that will take years. TSMC isn't going to break their contract with Apple regardless of how much money Nvidia shows up to the table with.
- zokier 6y ago
  > Also: Nvidia couldn't increase production quantity if they wanted, this isn't a money problem. The only way for them to produce more GPUs at this point is to build fabs, and that will take years. TSMC isn't going to break their contract with Apple regardless of how much money Nvidia shows up to the table with. That is very short-term thinking; taking years is still eventually.
  - tw04 6y ago
    Nvidia doesn't need more money for R&D, the limited supply has absolutely nothing to do with lack of resources to invest in manufacturing capacity. They have a combination of two things: There's no planet on which they are going to base their future plans on crypto mining. End of story. The market is far too volatile for them to bet the company on it. Another couple million in the bank from auctioning off cards isn't going to change that. You're talking 10s of BILLIONS of dollars for fabs all to meet crypto mining demand? And oh, by the way, the faster they ramp up supply, the faster demand for the GPU goes down due to increased complexity of mining. They have yield issues with the current generation chips. The only way that solves itself is through time, money won't improve the process, experience is the only fix. You also failed to address what happens to all their retail partners who you've conveniently decided should be cut out.
    - imtringued 6y ago
      This is the same logic people applied in the last crypto mining shortage. There will be more and more of those in the future as Bitcoins valuation becomes dumber and dumber. But I don't have to care since I am not an angry person on the internet who insists on buying a high end GPU for low prices while there aren't enough of them around. I bought an overpriced RX 570 years ago during the last mining boom and I am happy with it.

by zokier 6y ago

drewg123 6y ago

Indeed, I hate that the MSRP is far below the market determined pricepoint. The invites shortages and opens the door for scalping. I have been trying to get an Xbox Series X for months. I would like to have a new one, with a warranty. However, I finally gave up and "won" one with a $606 bid on stockx.com. After fees, shipping, etc, its close to $170 over the unrealistic $500 MSRP, which just shows how out of touch the MSRP really is.

clankyclanker 6y ago
> I hate that the MSRP is far below the market determined pricepoint. The invites shortages and opens the door for scalping. For some reason, this combination of sentences confuses me. The scalpers determine the market price by buying almost the entire volume. The only way to beat scalpers is to raise prices beyond what people are willing to pay, which forces scalpers to charge more to turn a profit, further raising the total price. I guess I don’t see how an initially higher price would stop scalpers at all, they’d just keep buying the entire stock, anyway.
- thaumasiotes 6y ago
  > The only way to beat scalpers is to raise prices beyond what people are willing to pay, which forces scalpers to charge more to turn a profit, further raising the total price. No, this can't happen. If you raise prices beyond the market-clearing point, scalpers would need to charge prices higher than that -- and sell all their inventory -- in order to turn a profit. This can't be done; the higher prices prevent them from selling everything they bought. > I guess I don’t see how an initially higher price would stop scalpers at all, they’d just keep buying the entire stock, anyway. Again, this can't happen. Scalpers are not able to keep buying products they can't sell. You can only buy the entire stock if your revenue from selling the amount you can sell exceeds your cost of buying the entire stock. Exceeding your cost of buying the amount you can sell isn't enough. Your economic model implies that all goods are controlled by scalpers who can never be dislodged. That's not even close to the truth. Why do you think that might be?
- imtringued 6y ago
  What you are describing isn't scalping. Scalping isn't about buying the entire supply. That's something completely different, namely market manipulation and this requires a huge amount of capital and you are not guaranteed to sell all your stock which makes it highly risky since the artificial demand could be outstripping regular demand. If you buy 100k GPUs and consumers only want to buy 75k GPUs then you would be stuck with 25k in this market manipulation scheme. However, since there is actually more than 100k demand for GPUs there aren't enough GPUs for regular customers. Meaning that a large portion of consumers are actually getting ahold of GPUs which would make it impossible for market manipulators to buy the entire supply. You can't have both things at the same time. You can't be angry that stupid idiots get stuck on inventory because you aren't actually buying GPUs while at the same time being angry for there not being enough inventory because people are actually buying GPUs. The reality is that people are buying GPUs and thus there is a lack of supply. Scalpers try to get ahold of the supply and auction it of fairly so that anyone who wants a GPU can get it since Nvidia failed to make sure that everyone who wants a GPU can get it. >The only way to beat scalpers is to raise prices beyond what people are willing to pay, which forces scalpers to charge more to turn a profit, further raising the total price. I guess I don’t see how an initially higher price would stop scalpers at all, they’d just keep buying the entire stock, anyway. As I said, if scalpers keep buying the supply while nobody wants the GPU they will simply be stuck with the excess stock and since they are in it to make money they will be forced to sell the GPU at market rates which is a net loss for them since they bought above market rate and a net gain to Nvidia. For the customer there is no difference.

Proven 6y ago

That recipe should get you a lot of upvotes in topics related to the recent price of electricity in Texas :-)

Exmoor 6y ago

I'm assuming they don't want to look like they're profiting on a shortage, which could also make the shortage look intentional. One workaround would have been to set up a system where the additional profit from auctioned GPU's went to charities.

Scoundreller 6y ago
Which is such a very good idea since they’ll often capture a significant percentage back on their taxes.

tw04 6y ago

And then what happens to their channel sales partners who survive off events like GPU and CPU launches? They just go out of business? Also: Nvidia couldn't increase production quantity if they wanted, this isn't a money problem. The only way for them to produce more GPUs at this point is to build fabs, and that will take years. TSMC isn't going to break their contract with Apple regardless of how much money Nvidia shows up to the table with.

zokier 6y ago
> Also: Nvidia couldn't increase production quantity if they wanted, this isn't a money problem. The only way for them to produce more GPUs at this point is to build fabs, and that will take years. TSMC isn't going to break their contract with Apple regardless of how much money Nvidia shows up to the table with. That is very short-term thinking; taking years is still eventually.
- tw04 6y ago
  Nvidia doesn't need more money for R&D, the limited supply has absolutely nothing to do with lack of resources to invest in manufacturing capacity. They have a combination of two things: There's no planet on which they are going to base their future plans on crypto mining. End of story. The market is far too volatile for them to bet the company on it. Another couple million in the bank from auctioning off cards isn't going to change that. You're talking 10s of BILLIONS of dollars for fabs all to meet crypto mining demand? And oh, by the way, the faster they ramp up supply, the faster demand for the GPU goes down due to increased complexity of mining. They have yield issues with the current generation chips. The only way that solves itself is through time, money won't improve the process, experience is the only fix. You also failed to address what happens to all their retail partners who you've conveniently decided should be cut out.
  - imtringued 6y ago
    This is the same logic people applied in the last crypto mining shortage. There will be more and more of those in the future as Bitcoins valuation becomes dumber and dumber. But I don't have to care since I am not an angry person on the internet who insists on buying a high end GPU for low prices while there aren't enough of them around. I bought an overpriced RX 570 years ago during the last mining boom and I am happy with it.