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What does price gouging mean to Jeff? What does it mean to you? gaming cards are a market with competition (AMD, Nvidia). It is also a luxury. So how do you pri

What does price gouging mean to Jeff? What does it mean to you? gaming cards are a market with competition (AMD, Nvidia). It is also a luxury. So how do you price gouge? Surely at almost all moments in time both of these public companies have sought to maximize profit, as they are now.

amerine 4y ago
They recently changed their agreements with card makers and forced very high pricing. They are charging more because they can, it’s the definition of price gouging.
- twblalock 4y ago
  Every company charges as much as it thinks it can for a product. If that counts as price gouging, almost 100% of all the companies that exist must be guilty of it!
  - Buttons840 4y ago
    That's the logic of the free market, yes. But do two companies which probably swap employees and executives constitute a market? If I went to a classical market, and two people were selling, is that a healthy market?
    - twblalock 4y ago
      If those two people in your example tried as hard to compete with each other as AMD and Nvidia do, then yes, it's a market and it's more healthy than many others. An unhealthy, uncompetitive market would not have such a notable rate of improvement of the products as we see in the GPU market. Plus, if it's competition you are concerned about, the situation is improving! Intel is getting into the discrete GPU market too.
      - tormeh 4y ago
        > such a notable rate of improvement of the products To be fair, frames per dollar have been roughly stagnant for a couple of years. It's just that now you have the additional option of paying more dollars to get more frames. This is an unusual situation, but it is what it is. The AMD 7000 series is (so far) not better value than the AMD 6000 series. Same with Nvidia. That's odd.
      - deleted 4y ago
        [deleted]
  - kmonsen 4y ago
    I don't think this is always true. Sometimes companies think that it is in their long term interest to charge less to keep different set of customers than the ones that are right now willing to pay more. This is very true for graphics cards BTW, and why Nvidia tried to lock card out of being used for crypto. They believe, I would think, that it was in their long term interest to cater to PC gamers and not crypto miners.
- hot_gril 4y ago
  > They are charging more because they can, it’s the definition of price gouging. I'm getting price gouged when I buy SPY stock then, and gouging someone when I sell it.
onli 4y ago
You don't maximize profits long term by killing (parts of) the market you rely on. Sales are at an all-time low because of the high prices, and if they continue like that the whole PC gaming market will evaporate. Companies are under no obligation to follow short term profits, that an US myth. Also, if you are in a market with very few participants there is no healthy mechanism of offer and demand. These companies are able to dictate prices at will, and that can be price gouging (which is why Intel entering the gpu market with a competitive product would be so important, three vendors is better than two).
- epolanski 4y ago
  > Companies are under no obligation to follow short term profits, that an US myth. CEOs live and die by them though.
  - ChuckNorris89 4y ago
    I doubt Jensen Huang or Lisa Su are going anywhere any time soon. They're very entrenched and respected in their companies. Also, they have the perfect excuse now: "you see dear members of the board, we're in a global economic recession, that's why GPU sales are low, not that we priced them way too high compared to previous generations".
- twblalock 4y ago
  The gaming market won't evaporate. If the market can't bear the new prices, Nvidia and AMD will just lower the prices. A real example of price gouging would be a store charging a hundred dollars for bottled water after a hurricane, because people are desperate for it and can't get it elsewhere. The situation in the gaming market is quite different. Gaming PCs in general, and high-end GPUs in particular, are luxury items, not necessities. There are no longer any meaningful GPU shortages, and there is an enormous secondary market that people can use if they don't want to pay the new prices. Plus, these cards are the GPU equivalent of supercars -- looking at the Steam hardware survey, the number one GPU is the affordable RTX 1650, which only recently supplanted the 1060. Is Ferrari price-gouging because their cars cost more than Toyotas?
hot_gril 4y ago
Wouldn't put it so angrily, but yeah, there isn't really such thing as price gouging on such a nonessential product.
- Gigachad 4y ago
  Yeah the definition of price gouging is sharply increasing the price of a essential product in times of disaster. Say supermarkets sharply increasing the price of water or food despite their supply being more than capable of handling the demand since they know people don't have time or ability to shop around. The term gets used a buzzword now for anything people want that costs lots.
  - Dylan16807 4y ago
    "Price gouging is a pejorative term used to describe the situation when a seller increases the prices of goods, services, or commodities to a level much higher than is considered reasonable or fair. Usually, this event occurs after a demand or supply shock. This term is commonly used to describe price increases of basic necessities after natural disasters." Plenty of people use the term to talk about non-essential products. A demand shock is exactly what increased prices here, and now a failure of competition is letting the duopoly keep profit margins extra high.
    - Gigachad 4y ago
      This isn't a problem for non essentials. No one needs to buy a 7900 XTX. It's really just a consumerist impulse for the majority. The last 4 years of cards still work perfectly fine. While consumers still demand the latest cards at these prices, they will stay at those prices.
      - hot_gril 4y ago
        The Nvidia/AMD duopoly is also nothing new, and if anything it's easing now that Intel has a dGPU offering and Apple does their own thing.

amerine 4y ago

They recently changed their agreements with card makers and forced very high pricing. They are charging more because they can, it’s the definition of price gouging.

twblalock 4y ago
Every company charges as much as it thinks it can for a product. If that counts as price gouging, almost 100% of all the companies that exist must be guilty of it!
- Buttons840 4y ago
  That's the logic of the free market, yes. But do two companies which probably swap employees and executives constitute a market? If I went to a classical market, and two people were selling, is that a healthy market?
  - twblalock 4y ago
    If those two people in your example tried as hard to compete with each other as AMD and Nvidia do, then yes, it's a market and it's more healthy than many others. An unhealthy, uncompetitive market would not have such a notable rate of improvement of the products as we see in the GPU market. Plus, if it's competition you are concerned about, the situation is improving! Intel is getting into the discrete GPU market too.
    - tormeh 4y ago
      > such a notable rate of improvement of the products To be fair, frames per dollar have been roughly stagnant for a couple of years. It's just that now you have the additional option of paying more dollars to get more frames. This is an unusual situation, but it is what it is. The AMD 7000 series is (so far) not better value than the AMD 6000 series. Same with Nvidia. That's odd.
    - deleted 4y ago
      [deleted]
- kmonsen 4y ago
  I don't think this is always true. Sometimes companies think that it is in their long term interest to charge less to keep different set of customers than the ones that are right now willing to pay more. This is very true for graphics cards BTW, and why Nvidia tried to lock card out of being used for crypto. They believe, I would think, that it was in their long term interest to cater to PC gamers and not crypto miners.
hot_gril 4y ago
> They are charging more because they can, it’s the definition of price gouging. I'm getting price gouged when I buy SPY stock then, and gouging someone when I sell it.

onli 4y ago

You don't maximize profits long term by killing (parts of) the market you rely on. Sales are at an all-time low because of the high prices, and if they continue like that the whole PC gaming market will evaporate. Companies are under no obligation to follow short term profits, that an US myth. Also, if you are in a market with very few participants there is no healthy mechanism of offer and demand. These companies are able to dictate prices at will, and that can be price gouging (which is why Intel entering the gpu market with a competitive product would be so important, three vendors is better than two).

epolanski 4y ago
> Companies are under no obligation to follow short term profits, that an US myth. CEOs live and die by them though.
- ChuckNorris89 4y ago
  I doubt Jensen Huang or Lisa Su are going anywhere any time soon. They're very entrenched and respected in their companies. Also, they have the perfect excuse now: "you see dear members of the board, we're in a global economic recession, that's why GPU sales are low, not that we priced them way too high compared to previous generations".
twblalock 4y ago
The gaming market won't evaporate. If the market can't bear the new prices, Nvidia and AMD will just lower the prices. A real example of price gouging would be a store charging a hundred dollars for bottled water after a hurricane, because people are desperate for it and can't get it elsewhere. The situation in the gaming market is quite different. Gaming PCs in general, and high-end GPUs in particular, are luxury items, not necessities. There are no longer any meaningful GPU shortages, and there is an enormous secondary market that people can use if they don't want to pay the new prices. Plus, these cards are the GPU equivalent of supercars -- looking at the Steam hardware survey, the number one GPU is the affordable RTX 1650, which only recently supplanted the 1060. Is Ferrari price-gouging because their cars cost more than Toyotas?

hot_gril 4y ago

Wouldn't put it so angrily, but yeah, there isn't really such thing as price gouging on such a nonessential product.

Gigachad 4y ago
Yeah the definition of price gouging is sharply increasing the price of a essential product in times of disaster. Say supermarkets sharply increasing the price of water or food despite their supply being more than capable of handling the demand since they know people don't have time or ability to shop around. The term gets used a buzzword now for anything people want that costs lots.
- Dylan16807 4y ago
  "Price gouging is a pejorative term used to describe the situation when a seller increases the prices of goods, services, or commodities to a level much higher than is considered reasonable or fair. Usually, this event occurs after a demand or supply shock. This term is commonly used to describe price increases of basic necessities after natural disasters." Plenty of people use the term to talk about non-essential products. A demand shock is exactly what increased prices here, and now a failure of competition is letting the duopoly keep profit margins extra high.
  - Gigachad 4y ago
    This isn't a problem for non essentials. No one needs to buy a 7900 XTX. It's really just a consumerist impulse for the majority. The last 4 years of cards still work perfectly fine. While consumers still demand the latest cards at these prices, they will stay at those prices.
    - hot_gril 4y ago
      The Nvidia/AMD duopoly is also nothing new, and if anything it's easing now that Intel has a dGPU offering and Apple does their own thing.