GTX460 drops another $10 – nVidia prepares to lose millions

If the stories flowing out of the Far East were not so juicy, we'd have given up on covering nVidia price moves a LONG time ago. But the juice is there, it makes KitGuru all excited and then we start typing. Damn the addiction, when you just can't get enough. It is saucy stuff. Prepare to salivate.

Initial stories about the new GTX460 price drop, reported exclusively on KitGuru, now appear to have missed the mark. We'd heard that Jay Puri and Jen Hsun Huang were looking to drop the price of the fastest selling Fermi card ever, by $20.

Nope.

We're now hearing that the boys in charge don't think $20 will be enough to stem the tide of the Rise of the Radeons in the DX11 space. Santa Clara SkyNet is looking to declare total war and has increase the price drop by a whopping 50%.

What the hell is going to happen with the GTS450 price when it launches at the start of next week – moments after the hugely popular GTX460 drops $30?

OK. We're a curious mixture of excited and bemused. Time to calm down and look at what this kind of price move means for nVidia.

With the GTX460 in full flow, sales have been good. One look at the Steam Powered Status Survey tells you that the GTX is moving fast through the channel. KitGuru understands that massive orders for GTX460 were placed over the past 3 weeks, but nVidia's biggest and most loyal customers.

When you move the price significantly, you need to price protect your friends. At $30 a card, for a huge number of recent orders, that's a lot of money. If there were 67,000 GTX460 cards in the global channel, then that price protection would hit Two Million Dollars. That's a hell of a marketing budget, in anyone's language.

Is it reasonable to assume there were 67,000 cards in the channel that needed protecting? Good question. We honestly don't know.  Let's play with some numbers and see.  The American market is probably around 15% of the global demand for graphics, with EMEAI is around 55% and Asia-Pacific makes up the remaining 30%.  55% into EMEAI would mean just under 37,000 cards. If you take the UK, Germany, France, Middle East & Africa, India, Nordics, Benelux, Central Europe, Southern Europe and Eastern Europe to be ‘one slice each', then you have 37,000 divided by 10 which is [reaches for calculator – Ed] 3,700 cards per zone. Over a 2-3 week period.

It might not be right but, to KitGuru, it sounds as though it might be in the right ballpark.

At the next quarterly results meeting, there are sure to be questions asked about why nVidia offset millions of dollars to price protect a drop on its most popular card.

KitGuru says: One thing is for certain, ahead of the Northern Islands launches (whenever that might happen), AMD will be coming under some pressure to finally change the pricing it's had for the Radeon 5000 series. Finally. Which is good for everyone. Right?   Cue Two Tribes theme music.

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