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I still find it hard to believe that creating demand for something is bad for its future. Should I hate gamers for driving demand for my consumer card which I b

by Tenoke 4y ago

I still find it hard to believe that creating demand for something is bad for its future. Should I hate gamers for driving demand for my consumer card which I buy for machine learning?

giantg2 4y ago
Your example isn't the same. The manufacturers wouldn't be able to do enough volume to bring down card prices for AI without gamers. The gamers are actually bringing your price down. This is a bubble created mostly by crypto that is driving prices up because their demand greatly exceeds supply.
squeaky-clean 4y ago
If gamers ever cause GPU stock to be unavailable for literally years and drive prices up to triple their msrp, yes. Then you can be mad at gamers.
- Tenoke 4y ago
  While the shortages are real I've bought GPUs during those years, never for even 2x MSRP (though obviously more than MSRP). Prices have also surely increased due to gamers at times (even if less so) without me hating them, and MSRP has clearly been set quite low compared to costs and the past - look at EVGA barely managing to profit by selling at the prices set by NVIDIA which would hardly be due to the increased demand. At any rate, I'm just not convinced that the extra demand for years isn't good for the GPU industry - e.g. I'd imagine 10 years down the line the GPU industry to be better off in the world in which it had increased demand for years over the world where it didn't. Hell, maybe it even directly helped with scaling up for the increasing ML demand.
  - giantg2 4y ago
    "EVGA barely managing to profit ... Hell, maybe it even directly helped with scaling up for the increasing ML demand." This makes no sense. Any architecture 10 years in the future would be different and require retooling. It's also yet to be seen what demand ML will even generate in 10 years (it's been all the rage for the last 10 and we're nowhere close to those predictions). The money would be one that I could agree with helping in the future, but similar to what you said profit forecasts are low, so they won't even have that.
    - Tenoke 4y ago
      EVGA's profits might've been low but as far as I can see NVIDIA's profit and growth has increased significantly since Ethereum launched[0] and money today helps with R&D for tomorrow (and R&D budgets have increased even more). 0. https://www.macrotrends.net/stocks/charts/NVDA/nvidia/revenue https://www.macrotrends.net/stocks/charts/NVDA/nvidia/revenu...
      - giantg2 4y ago
        Sure, but if I remember correctly they are giving shareholder guidance that the future profits look bleak. Again, this is a big bubble mostly caused by crypto.
  - squeaky-clean 4y ago
    > At any rate, I'm just not convinced that the extra demand for years isn't good for the GPU industry The demand disappeared last Thursday night.
mping 4y ago
Most of the time, 1 gamer = 1 card; for crypto, it's like a dozen guys run hundreds if not thousands of GPUs. It's basically hoarding a finite resource.
omegalulw 4y ago
It's not about creating demand. It's about creating wild swings in demand AND supply. Miners buy en masse when profitable and sell when not. That's what messes up the market. Gamers won't do that.
concinds 4y ago
You're right. $NVDA went from $2.6B in R&D for FY2019 to $6.3B for FY2022; and they've done a few cloud acquisitions in the meantime. They'll go through a tough period, sales wise, as the market gets flooded with second-hand stuff, but their fundamentals are solid.
deleted 4y ago
[deleted]
VintageCool 4y ago
Steady demand (ie gamers) is good for making investments into the future. A massive flood of temporary demand (ie crypto) is dangerous. If they make huge investments to be able to meet crypto demand and it disappears in two years, then the manufacturers are overextended (probably on loans); they might go under when the flood abates or they might drive prices down to levels which cannot sustain future investment. The flood of crypto demand also harms their steady market of gamers: witness how much resentment has been expressed toward crypto and Nvidia in this thread.
Ekaros 4y ago
No, you should thank them for giving constant demand for consumer products. Without them you would be paying enterprise prices for the same cards...

by Tenoke 4y ago

I still find it hard to believe that creating demand for something is bad for its future. Should I hate gamers for driving demand for my consumer card which I buy for machine learning?

giantg2 4y ago

Your example isn't the same. The manufacturers wouldn't be able to do enough volume to bring down card prices for AI without gamers. The gamers are actually bringing your price down. This is a bubble created mostly by crypto that is driving prices up because their demand greatly exceeds supply.

squeaky-clean 4y ago

If gamers ever cause GPU stock to be unavailable for literally years and drive prices up to triple their msrp, yes. Then you can be mad at gamers.

Tenoke 4y ago
While the shortages are real I've bought GPUs during those years, never for even 2x MSRP (though obviously more than MSRP). Prices have also surely increased due to gamers at times (even if less so) without me hating them, and MSRP has clearly been set quite low compared to costs and the past - look at EVGA barely managing to profit by selling at the prices set by NVIDIA which would hardly be due to the increased demand. At any rate, I'm just not convinced that the extra demand for years isn't good for the GPU industry - e.g. I'd imagine 10 years down the line the GPU industry to be better off in the world in which it had increased demand for years over the world where it didn't. Hell, maybe it even directly helped with scaling up for the increasing ML demand.
- giantg2 4y ago
  "EVGA barely managing to profit ... Hell, maybe it even directly helped with scaling up for the increasing ML demand." This makes no sense. Any architecture 10 years in the future would be different and require retooling. It's also yet to be seen what demand ML will even generate in 10 years (it's been all the rage for the last 10 and we're nowhere close to those predictions). The money would be one that I could agree with helping in the future, but similar to what you said profit forecasts are low, so they won't even have that.
  - Tenoke 4y ago
    EVGA's profits might've been low but as far as I can see NVIDIA's profit and growth has increased significantly since Ethereum launched[0] and money today helps with R&D for tomorrow (and R&D budgets have increased even more). 0. https://www.macrotrends.net/stocks/charts/NVDA/nvidia/revenue https://www.macrotrends.net/stocks/charts/NVDA/nvidia/revenu...
    - giantg2 4y ago
      Sure, but if I remember correctly they are giving shareholder guidance that the future profits look bleak. Again, this is a big bubble mostly caused by crypto.
- squeaky-clean 4y ago
  > At any rate, I'm just not convinced that the extra demand for years isn't good for the GPU industry The demand disappeared last Thursday night.

mping 4y ago

Most of the time, 1 gamer = 1 card; for crypto, it's like a dozen guys run hundreds if not thousands of GPUs. It's basically hoarding a finite resource.

omegalulw 4y ago

It's not about creating demand. It's about creating wild swings in demand AND supply. Miners buy en masse when profitable and sell when not. That's what messes up the market. Gamers won't do that.

concinds 4y ago

You're right. $NVDA went from $2.6B in R&D for FY2019 to $6.3B for FY2022; and they've done a few cloud acquisitions in the meantime. They'll go through a tough period, sales wise, as the market gets flooded with second-hand stuff, but their fundamentals are solid.

deleted 4y ago

[deleted]

VintageCool 4y ago

Steady demand (ie gamers) is good for making investments into the future. A massive flood of temporary demand (ie crypto) is dangerous. If they make huge investments to be able to meet crypto demand and it disappears in two years, then the manufacturers are overextended (probably on loans); they might go under when the flood abates or they might drive prices down to levels which cannot sustain future investment. The flood of crypto demand also harms their steady market of gamers: witness how much resentment has been expressed toward crypto and Nvidia in this thread.

Ekaros 4y ago

No, you should thank them for giving constant demand for consumer products. Without them you would be paying enterprise prices for the same cards...