nVidia drops the price of GTX460 another $20

If KitGuru had known that nVidia would be announcing weekly price cuts, we would have hired an intern to write these stories. The GTX460 is easily the most popular of the Fermi cards released so far, so why another price cut?  KitGuru empties the bins around nVidia's HQ in Theale, looking for an answer.

This time last year, nVidia's sales force were overheard telling customers that it was time for AMD employees to update their CVs, because ‘Fermi is coming'. While that career advice might have been a little premature, Fermi is now starting to prove its worth and it's beginning to provide a viable alternative to the AMD Radeon HD 5000 series in the DX11 space. But are the new, affordable, Fermi products coming to market too slowly?

Over the last 2 weeks, we have seen Black-Ops marketing taken to new levels by both AMD and nVidia.

Normally, new graphics drivers are carefully scanned to ensure that no unreleased product names are contained in the code. nVidia's latest driver showed that it's finally ready to launch the 420 etc products that KitGuru publicised back in May. In the same month, AMD went one step further by ‘driver announcing' that it has a complete new generation of cards ready to go – the Northern Islands refresh to the 5000 series.

Right now, Jen Hsun Huang (CEO) and Jay Puri (VP Sales) must be utterly conflicted. Looking at the massive Steam Power Stats Survey, nVidia is sitting on 59% of the overall graphics market space. Now that's a figure any company would be proud of.

At the same time, nVidia positions itself as a technology leader, which means it wants to be doing best in the newer markets. As August drew to a close, the independent Steam Powered DX11 statistics read 87% Radeon and 13% GeForce. With these publicly available numbers to chew on, how did we think nVidia's head honchos would react?

Looking closely at the Steam Powered data, the majority of the people buying DX11 are those with existing DX9 cards. To us, this means a gamer who's upgrading to a complete, next generation rig, which they will hang onto for a good while. That's a lot of sales revenue gone and no easy chance to re-sell into the same user for a couple of years. nVidia is ambitious and wants a bigger slice of that DX11 pie.

One thing that looks set to help is the launch of the GTS450 product, which we predicted would be in stores on 14th September (Flags of our Predictions – back at the start of July). That prediction is still looking safe.

So will the new launch be enough for Jen Hsun and Jay?  Not Likely. What else might they do to try and gain parity in the DX11 market?

Something surprising? You bet!

When we just heard from our Far East nVidia sources that another $20 price cut has been made to the GTX460. KitGuru was shocked.

Cutting the price of the GTX470 seemed an obvious move, because it was simply not competitive against the HD 5850 at launch. The same is true for the high-end GTX480 price cuts.

But with the apparently popular GTX460 already down around the £145 mark (with sales tax), in the UK and USA, the landing spot for pricing on the GTS450 product has become very small. Think ‘Eagle landing on moon' small.

KitGuru originally predicted that the GTS450 cards would be in the £99 to £129 range – depending on clock speed and memory. If the GTX460 drops to £130 or less in the next week or so, then we have to say the £129 upper limit for the GTS450 is looking unlikely. It's too close. No one would pay £129 for a GTS450 when they can have a GTX460 for the same money.

Normally, a graphics company would want the biggest sensible price gap between each product and, certainly, when a new product is launching the last thing you do is drop a much faster product down in price, to sit right next to it. Interesting times!

KitGuru says: We really don't understand this price cut. Sure, it represents great value to KitGuru readers who were interested in the GTX460, but were looking for a bit more value. It also makes GTX460 SLi very attractive, but the GTS450 is also supposed to be followed by a slightly quicker GTS455 (GTX460 fall out part). If that happens, where can it possibly slide into this product stack? We are really asking.

Intelligent explanations welcome below, we stand ready to be educated on the intricacies of product placement.

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