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Comment by jackmott42 | Hacker News Reader

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.

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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).

> Companies are under no obligation to follow short term profits, that an US myth.

CEOs live and die by them though.

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".

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?

> ... the number one GPU is the affordable RTX 1650,...

I guess you mean GTX 1650.

"Affordable" is a relative and vague term; 200 EUR in my area for my target interest HDMI2 and DisplayPort (UHD 60fps HDR for video watching and desktop work).

I'm waiting for a price around 100 EUR.

But the "new version" of the GTX 1060 is a lot more expensive. That's why it's the GTX 1060 that remained so popular and not the RTX 2060 or 3060. The 1060 came out almost 7 years ago. (And the 1650 is even lower performance!)

Now you hear that GPU sales are hitting lows they haven't been at for a while. The fear is that making a PC game would be targeting an old market, meanwhile consoles are affordable. But if fewer games are made for PCs then there's less reason for people to get gaming PCs too.

Side note to that: The GTX 1650 is actually weaker than the GTX 1060 (benchmarks: https://www.pc-kombo.com/us/benchmark/games/gpu/compare?ids[... ). That it was able to overtake the 1060 is actually a really bad sign for the health of the market. It's also not really affordable, in that it is completely overpriced for the performance it offers.

>the whole PC gaming market will evaporate. I'm not happy about the current GPU situation, but there's no way this is true. Will PC be impacted? I'm sure. Honestly, it might be for the better. My Steam Deck uses 15W, and the graphics it can put out are good enough for me. Improvement over time is nice, it doesn't have to be so fast. Gaming won't lose anything by slowing down its graphics cycles.

>Gaming won't lose anything by slowing down its graphics cycles.

It will miss that next generation of would be pc gamers. If the new gen is priced out, then consoles become more attractive, which means less games are made for PC, which then creates a chicken/egg problem.

And actually there’s significant lock-in effect - people don’t want to give up the games and in-game items they’ve bought on consoles, or stop playing with their friends they’ve made, just like pc gamers don’t want to give up their steam library or friends.

> Sales are at an all-time low...

Are they?

Yes, at least for the consumer gpus, which have hit a 20y low

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

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.

"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.

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.

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.

Intel has not yet released a competitive product, and Apple isn't big enough to tip things at this point.

The duopoly isn't new, but they got a much better opportunity than usual to spike prices.

It doesn't have to be a "real" problem for people to complain about profit margins skyrocketing.

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.

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!

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?

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.

> 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.

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.

> 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.

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