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> ”Nvidia has no incentive to make sure the GPU market operates in a sustainable way by supporting a secondary market.” They do in the sense that buyers often

> ”Nvidia has no incentive to make sure the GPU market operates in a sustainable way by supporting a secondary market.” They do in the sense that buyers often consider future resale values when making primary purchase decisions. It’s much easier to justify purchasing a $2500 “enthusiast” graphics card if you’re confident you can get a decent chunk of that back when you sell it in 6-12 months. Similarly, car makers are incentivised to try to ensure their vehicles have decent resale value. Expected future residuals affect financing and purchase decisions today.

chme 5y ago
I would really like to see some data on how much resale value factors in for purchase decisions in regards to gaming equipment in average.
- ehnto 5y ago
  Some anecdata, I buy midrange cards and never try to sell them. They usually end up in the machines of friends or family. The purchase price is what I am willing to spend on the device and it's usage, and a healthy dose of pragmatism about what is actually necessary. I also overclock to stretch their usefulness out but I must admit the leaps in each generation recently, as well as some fundamentally new technology capabilities mean I am not keeping up as well.
- Nursie 5y ago
  I don't have data, but I do participate in an enthusiasts forum. It's a huge thing for a lot of them, because a top card costs quite a chunk of cash (even before the current shortage), maintaining resale value allows them to stay at the top for a relatively modest outlay every card generation. Of course right now you can sell 4 year old cards for a profit, the market is crazy.
- robben1234 5y ago
  No real data, but in my decades of gaming I didn't really hear of people buying the top card in hopes to resell it later and make it affordable. In my experience people buy what they can afford. So mostly *60/*70 (Ti) Nvidia cards. Few people who I know bought the 1080 are still using it. The second life for gaming GPUs mostly is to serve friends/relatives who ask to help building a PC for them.
- saddestcatever 5y ago
  On average, I imagine it's low. However, anecdotally the gamers I know who are buying $1000+ cards, generally do so every 2 years with the intent to flip them and buy the newest hottest card. In a similar train of thought - there might be better data on this question if one was to look at the photography equipment market. Or other used consumer markets with high re-sale value.
finchisko 5y ago
In my experience base level items have much better resale value then more expensive items. It's true for notebooks, graphic cards and cars too. For example my iPhone 11 Pro has fallen to half of the price in one year, but entry level iPhone 11 probably has still 70% of its value. Same for Macbook Air, entry level with 8GB and 256 SSD will hold value better then maxed out one. Same with cars, extra premium equipment has basically no value for people that are buying used cars. So doubt that premium graphic cards are exception. Their value falls sharply over time, so not sure people buying them are considering resale value as argument to buy them.
- dmurray 5y ago
  The entry level iPhone 11 and Macbook Air are still premium products. You're not reselling your €250 unbranded Walmart laptop for anything more than scrap.
  - taneq 5y ago
    Neither was Walmart, to be fair.
  - JansjoFromIkea 5y ago
    Yep, it's premium to the point that's search function friendly. Apple machines will hold their value very well but it'll be weighted in favour of the basic version of each model. I think when you get to PC parts it becomes quite a bit trickier as everyone who is willing to buy used PC parts is way more knowledgable on exactly what they're looking for. A lot of things do hold their value pretty well. On the other side of things, you're taking such a risk selling computer parts on ebay (gotta be a lot of people frying components after buying them and not even realising it's their fault) that I can see why people couldn't be bothered taking the risk of reselling when they can just gift away the parts.
    - ClumsyPilot 5y ago
      Sold used motherboard, it came back as e-waste
- 5y ago
Joker_vD 5y ago
> car makers are incentivised to try to ensure their vehicles have decent resale value Is this actually true or merely a theoretical thought? Because it would seem that car makers are incentivised to ensure their vehicles annihilate a couple days after their warranty expires and/or after a couple of miles after their guaranteed mileage is driven, and comparing e.g. reputation of second-hand cars manufactured in 80es/90es/2000s/10s seems to support it.
- Danieru 5y ago
  One of the tactics Nissan ran into big trouble with was their extreme reliance on fleet sales. Fleet sales juiced the profits but killed the used market, thus pushing Nissan's cars down market thanks to reduced resale value. This was an active criticism by investors and journalists during the Nissan down turn. Meanwhile Toyota is able to charge a meaningful premium because their cars retain value. So I do think it is safe to conclude in the case of cars the effect is real.
  - throwaway0a5e 5y ago
    You came sooooo close to hitting the nail on the head. The first owners have a huge effect on a resale value of a vehicle. Who buys Toyotas? Why are those people's cars more valuable on the used market than corporate fleet's used cars? Now see if your model explains the used value of a Dodge Journey, oilfield pickup and whatever car grandma owned. Nissan spend the '00s selling to owners who's used cars are not held in high regard and this affected consumer perceptions of them. Toyota spent the 90s and '00s (and still is) selling to upscale people who treated their cars nicely and it affected consumer perception of them.
    - blagie 5y ago
      I'm not so sure. I bought my car mostly to minimize total-cost-of-ownership. I assume I'll resell my car when the TCO of maintenance exceeds the TCO of a new car. I know a lot of other folks who do something similar to that too. TCO includes my time, so if I need to take a car to the shop, or miss meetings because things break down, that raises TCO by that opportunity cost. Selling a car is a hassle, and by the time I'm ready to give it up, it's not worth too much (and the buyers will probably be poor, since TCO exceeds a new car) so I don't feel the need to maximize resale value. While this is an overly rationalist way of phrasing things, but most people I know take a similarly pragmatic approach. Teachers. (Real, not software) engineers. Etc. I don't buy used cars, since some people sell to upgrade, and some sell because there's some issue. The headache adds a lot to the TCO.
ppf 5y ago
>car makers are incentivised to try to ensure their vehicles have decent resale value Why? They are only incentivised to make more profit, and selling high-tech expensive cars that break after 10 years is great for that. The ones that will bear the cost of that will be either the financing companies (and it would be fun to see the market collapse as the current crop of shiny German cars hits the 2nd hand market and no-one is dumb enough to buy one), or those poor souls who insist on buying old-ish cars instead of leasing like everyone else.
- Reason077 5y ago
  Now days it is often the automakers themselves doing the financing/leasing, so if a model has poor residuals it directly affects their profits. Even with third-party financing, the anticipated residuals influence the attractiveness of the lease offer. A cheaper lease offer means more sales for the automaker, and thus more profits.
  - ppf 5y ago
    Personally I don't think the market has yet caught up to the fact that today's new cars will make horrible purchases as the 3rd or so owner. All the financiers have to do is make sure someone buys it for a good price after 3 years of being leased from new. That's not a bad proposition - the car will probably last a while longer with all of its electonic toys and gizmos working. It's the buyer after that (of which I am usually one) that will find out how expensive the car is to maintain.

chme 5y ago

I would really like to see some data on how much resale value factors in for purchase decisions in regards to gaming equipment in average.

ehnto 5y ago
Some anecdata, I buy midrange cards and never try to sell them. They usually end up in the machines of friends or family. The purchase price is what I am willing to spend on the device and it's usage, and a healthy dose of pragmatism about what is actually necessary. I also overclock to stretch their usefulness out but I must admit the leaps in each generation recently, as well as some fundamentally new technology capabilities mean I am not keeping up as well.
Nursie 5y ago
I don't have data, but I do participate in an enthusiasts forum. It's a huge thing for a lot of them, because a top card costs quite a chunk of cash (even before the current shortage), maintaining resale value allows them to stay at the top for a relatively modest outlay every card generation. Of course right now you can sell 4 year old cards for a profit, the market is crazy.
robben1234 5y ago
No real data, but in my decades of gaming I didn't really hear of people buying the top card in hopes to resell it later and make it affordable. In my experience people buy what they can afford. So mostly *60/*70 (Ti) Nvidia cards. Few people who I know bought the 1080 are still using it. The second life for gaming GPUs mostly is to serve friends/relatives who ask to help building a PC for them.
saddestcatever 5y ago
On average, I imagine it's low. However, anecdotally the gamers I know who are buying $1000+ cards, generally do so every 2 years with the intent to flip them and buy the newest hottest card. In a similar train of thought - there might be better data on this question if one was to look at the photography equipment market. Or other used consumer markets with high re-sale value.

finchisko 5y ago

In my experience base level items have much better resale value then more expensive items. It's true for notebooks, graphic cards and cars too. For example my iPhone 11 Pro has fallen to half of the price in one year, but entry level iPhone 11 probably has still 70% of its value. Same for Macbook Air, entry level with 8GB and 256 SSD will hold value better then maxed out one. Same with cars, extra premium equipment has basically no value for people that are buying used cars. So doubt that premium graphic cards are exception. Their value falls sharply over time, so not sure people buying them are considering resale value as argument to buy them.

dmurray 5y ago
The entry level iPhone 11 and Macbook Air are still premium products. You're not reselling your €250 unbranded Walmart laptop for anything more than scrap.
- taneq 5y ago
  Neither was Walmart, to be fair.
- JansjoFromIkea 5y ago
  Yep, it's premium to the point that's search function friendly. Apple machines will hold their value very well but it'll be weighted in favour of the basic version of each model. I think when you get to PC parts it becomes quite a bit trickier as everyone who is willing to buy used PC parts is way more knowledgable on exactly what they're looking for. A lot of things do hold their value pretty well. On the other side of things, you're taking such a risk selling computer parts on ebay (gotta be a lot of people frying components after buying them and not even realising it's their fault) that I can see why people couldn't be bothered taking the risk of reselling when they can just gift away the parts.
  - ClumsyPilot 5y ago
    Sold used motherboard, it came back as e-waste
5y ago

Joker_vD 5y ago

> car makers are incentivised to try to ensure their vehicles have decent resale value Is this actually true or merely a theoretical thought? Because it would seem that car makers are incentivised to ensure their vehicles annihilate a couple days after their warranty expires and/or after a couple of miles after their guaranteed mileage is driven, and comparing e.g. reputation of second-hand cars manufactured in 80es/90es/2000s/10s seems to support it.

Danieru 5y ago
One of the tactics Nissan ran into big trouble with was their extreme reliance on fleet sales. Fleet sales juiced the profits but killed the used market, thus pushing Nissan's cars down market thanks to reduced resale value. This was an active criticism by investors and journalists during the Nissan down turn. Meanwhile Toyota is able to charge a meaningful premium because their cars retain value. So I do think it is safe to conclude in the case of cars the effect is real.
- throwaway0a5e 5y ago
  You came sooooo close to hitting the nail on the head. The first owners have a huge effect on a resale value of a vehicle. Who buys Toyotas? Why are those people's cars more valuable on the used market than corporate fleet's used cars? Now see if your model explains the used value of a Dodge Journey, oilfield pickup and whatever car grandma owned. Nissan spend the '00s selling to owners who's used cars are not held in high regard and this affected consumer perceptions of them. Toyota spent the 90s and '00s (and still is) selling to upscale people who treated their cars nicely and it affected consumer perception of them.
  - blagie 5y ago
    I'm not so sure. I bought my car mostly to minimize total-cost-of-ownership. I assume I'll resell my car when the TCO of maintenance exceeds the TCO of a new car. I know a lot of other folks who do something similar to that too. TCO includes my time, so if I need to take a car to the shop, or miss meetings because things break down, that raises TCO by that opportunity cost. Selling a car is a hassle, and by the time I'm ready to give it up, it's not worth too much (and the buyers will probably be poor, since TCO exceeds a new car) so I don't feel the need to maximize resale value. While this is an overly rationalist way of phrasing things, but most people I know take a similarly pragmatic approach. Teachers. (Real, not software) engineers. Etc. I don't buy used cars, since some people sell to upgrade, and some sell because there's some issue. The headache adds a lot to the TCO.

ppf 5y ago

>car makers are incentivised to try to ensure their vehicles have decent resale value Why? They are only incentivised to make more profit, and selling high-tech expensive cars that break after 10 years is great for that. The ones that will bear the cost of that will be either the financing companies (and it would be fun to see the market collapse as the current crop of shiny German cars hits the 2nd hand market and no-one is dumb enough to buy one), or those poor souls who insist on buying old-ish cars instead of leasing like everyone else.

Reason077 5y ago
Now days it is often the automakers themselves doing the financing/leasing, so if a model has poor residuals it directly affects their profits. Even with third-party financing, the anticipated residuals influence the attractiveness of the lease offer. A cheaper lease offer means more sales for the automaker, and thus more profits.
- ppf 5y ago
  Personally I don't think the market has yet caught up to the fact that today's new cars will make horrible purchases as the 3rd or so owner. All the financiers have to do is make sure someone buys it for a good price after 3 years of being leased from new. That's not a bad proposition - the car will probably last a while longer with all of its electonic toys and gizmos working. It's the buyer after that (of which I am usually one) that will find out how expensive the car is to maintain.