Why So Expensive? The Reason Behind High-Priced Video Cards

Gaming computers are very fun to play with once you get them. One of the core components of a gaming computer is a GPU, or a graphics card. Technically, it’s called a Graphics Processing Unit, but nobody calls it that. Everyone calls them either video cards or graphics cards so we will follow the general consensus here.

The point is, graphics cards are essential to building a high-performance gaming computer or workstation. They help to take in and process video and computer graphics, which is very important in a lot of different fields, whether you are a hardcore gamer or a car designer.

Supply and Demand

The first reason graphics cards are so expensive is because of the simple economic law of supply and demand. Consumer supply and demand determine the price of everything in the market. Graphics cards are no different; their case is just a lot more severe. Since the cryptocurrency craze started in 2009 with Bitcoin, people have been buying graphics cards for mining the virtual currency instead of using them to game or design.

This would have raised the prices for graphics cards a little bit at that time, but not by much. Keep in mind that Bitcoin was $.01 per coin in 2009 so it wouldn’t have paid off the money spent on graphics cards, even if there were hundreds of successfully mined Bitcoin.

The real inflation of prices began in 2013 when Bitcoin was on the rise and Ethereum and Litecoin were introduced to the cryptocurrency market. The rise in cryptography usage was partly due to the discoveries made by Edward Snowden, a former intelligence official at the CIA, NSA, and DOJ. Privacy concerns helped light up the market of cryptocurrency as an alternative payment option to credit cards, checks, and recently, paper money. As it would logically follow, mining became a craze that attracted more and more crypto enthusiasts who would buy graphics cards to help them guess the cryptography code that makes up every cryptocurrency.

As graphics cards became the pinnacle of data mining in mid-2014 to early 2015, decreasing amounts of them were available to the everyday consumer to buy. As corporations such as ASUS began to realize that supply could no longer sufficiently meet demand, they raised their prices.

The supplier of the video cards, nVidia, has been out of stock for months, and it’s no wonder why. The only products they sell are “Founder’s Edition” graphics cards, ranging from the GeForce GTX 1060 to the Titan Xp, all at MSRP prices. Not only are the “Founder’s Edition” cards really cool, they are also hundreds of dollars less than other GPUs offered by top brands such as ASUS, MSI, EVGA, and others.

 

Conclusion

For years now, demand for graphics cards has risen while supply has stayed the same. Demand is so far past market equilibrium it’s not even funny. There is still hope, however, as crypto mining doesn’t pay as well as it used to, adding to the 40% drop in demand over the year 2018. It also seems like Nvidia and AMD are coming out with new graphics cards that are set to outperform the old graphics cards that used to be their top-of-the-line GPU.

For nVidia, they are getting ready to release the GeForce GTX 1180 (or 2080) and 1170 (or 2070), according to rumors from UFD Tech Deals and other channels on YouTube. These new cards are set to challenge the ranks of the Titan V and the Titan Xp, while offering the consumer hundreds more KUDA cores and higher clock speeds. This will expectedly drive prices for other cards down, if not decrease in price itself.

AMD is ready to release a competitor to their best card, the Radeon Vega 64. While the name of AMD’s new card remains unknown due to it being a rumor and all, the point still stands that if these rumors turn out to be true, GPU prices are bound to drop hundreds (thousands for the higher-end designer GPUs) of dollars over the next few months.

As it turns out, building a computer is expensive because of the video card, and in order to get a good one, consumers are expected to pay hundreds of dollars. But there is hope in the next couple of months for the downfall of video card prices, and maybe this will make the prices of computers across the nation go down as well.

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.