People harp on the "NVIDIA pushing upmarket" but the reality is that NVIDIA is running their lowest operating margins since ~2011 right now, and that's
with a secular shift towards high-margin enterprise products being rolled into those topline numbers.(cool bug facts: for the Q1 numbers, AMD's gaming division actually had a higher operating margin than NVIDIA as a whole including enterprise sales/etc! 17.9% vs 15.7%)
https://www.macrotrends.net/stocks/charts/NVDA/nvidia/operat...
https://ir.amd.com/news-events/press-releases/detail/1146/am...
The new generations of goods simply are that expensive to produce and support - TSMC N4 is something like 3-4x the cost per wafer of Samsung 8nm, even with the smaller die sizes and smaller memory buses these products are actually some thing on the order of twice as expensive as Ampere to produce. Tapeout/validation costs have continued to soar at an equal rate, and this is simply a matter of physics, not something TSMC controls, therefore not something that can be changed by pushing profits around on a sheet.
https://www.tomshardware.com/news/tsmc-will-charge-20000-per...
https://semiengineering.com/how-much-will-that-chip-cost/
MCM doesn't really affect this either - this is about how many mm2 of silicon you use, not how well it yields. Even if you yield at 100%, 4x250mm2 chiplets is still 1000mm2 of silicon. And the cost of that silicon is increasing 50-75% for every node family you shrink. Memory and PCIe PHYs do not shrink, and cache has only shrunk modestly (~30%) at 5nm and will not shrink at 3nm at all. So at the low end you are getting an additional crunch where the design area tends to be dominated by these large fixed, unshrinkable areas.
This is the fundamental reason that has followed NVIDIA on pricing for years now with products like 5700XT, 6800XT, Vega, Fury X, etc. TSMC N7 was already around twice as expensive per wafer as Samsung 8nm or TSMC 16FF/14FF. NVIDIA was using cheap nodes and AMD was being forced to use expensive leading-edge nodes just to remain competitive (and despite failing to take a commanding lead). They didn't follow because their cost-of-goods was higher - which is also the reason AMD cut memory bus width in RDNA2, along with PCIe width and things like video encoders on certain products. They were on the leading nodes, so they took the hit to area overhead sooner, and started looking for solutions sooner. It's not oligopoly, consumers just haven't adapted to the reality of cost-of-goods going up.
AMD being willing to cut deeply on inventory at the end of the generation is one thing, but you also have to remember that the Gaming Division (RTG+consoles) is barely in the green right now and that's even with AMD signing a big deal for next-gen consoles that is more or less straight profit for them. They're losing money on RDNA2 hand-over-fist right now, this is a clearance sale at the end of the generation, not a sustainable business model.
When they can undercut they have undercut - like 7900XT/XTX. The 4080 is fundamentally unsaleable at its current price, and 4070 Ti isn't exactly great either, and when AMD saw the sales numbers they cut the prices. That's the counterexample to oligoploy - they are willing to do it when they can. When they match pricing, or do a token undercut, it's usually because they can't afford to do drastically less than NVIDIA themselves, because they're affected by the same costs. For example Navi 32 (7700XT/7800XT) is going to be pretty unexciting because MCM imposes a big area/performance overhead and they simply can't go way cheaper than NVIDIA, despite the 4060 Ti also being an awful price.
As such, the premise of your post is fundamentally false. AMD generally costs about the same as NVIDIA, and that's part of the reason they've failed to take marketshare over the last 10 years. It's generally a less attractive overall package with less features, other than sometimes having more VRAM (but not always, Vega had less than 1080 Ti, Fury X had less than 980 Ti, 5700XT had the same as 2070/2070S and less than 1080 Ti, etc). And this is because AMD is fundamentally affected by the same economics in the market as NVIDIA. And Intel will be too, when they stop running loss-leader products to build marketshare.
Consumers don't like it but this is the reality of what these products cost to design and manufacture today. And you don't have to buy it, and if those product segments don't turn a profit they will be discontinued, like the $100 and $150 segments before this (where are the Radeon HD 7750s and 7850s of yesteryear?). That's how capitalism works, the operating margins have already been reduced for both companies, they're not going to operate product segments at a loss just so gamers can have cheap toys. Even if they do it for a while, they're not going to produce followups to those money-losing products.
Nor is NVIDIA leaving the gaming market either. They'll continue to produce for the segments that it makes sense to produce for. The midrange (which is now $600+) and high-end ($1000+) will both continue to see good gains, because they're less affected by the factors killing the low end. And MCM will actually be incredibly great in the high end - imagine two or four AD102-sized chiplets working together. But it's going to cost a ton - probably the high-end will range up to $4k-8k within a decade or two.
The low end will have to live with what it's got. AMD holding the 7600/7500 back on N6 (7nm family) is the wave of the future, and it seems like NVIDIA probably should have done the same thing with the 4060. A 3060 Ti 16GB for $349 or $329 would probably have been a more attractive product than a 4060 8GB at $299 on 4nm. Maybe give it the updated OFA block so it can use the new features, and call it a day.
If $300 is your budget for a GPU, buy a console - the APU design is simply a more efficient way to go. A $300 dGPU is about 90% of the hardware that needs to go into a console, and if you just bolt on some CPU cores and an SSD you're basically there. The manufacturing/testing/shipping costs don't make sense for a low-end product (and $300 is now entry-level) to be modularized like this anymore, integration brings down costs. The ATX design is a wildly inefficient way to build a PC, and consoles eschew it for a reason. A Steam Console could bring costs down a lot, but it still will involve soldered memory and other compromises the PC market doesn't like (but will be necessary for GDDR6/7 signal integrity etc). Sockets suck, they are awful electrically and ruin signal integrity. The future is either console-style GDDR or Apple-style stacked LPDDR.