Graphics card market shrinks by 42.7 percent
Could the days be numbered for top-end graphics cards in the current economic climate?
According to the report, the discrete graphics card market started to shrink in the second quarter of 2008, in which sales of graphics cards were 6.7 per cent down on the same period in 2007. However, graphics card sales then nosedived towards the end of the year, with sales in the fourth quarter of 2008 plummeting by 42.7 percent when compared with the same period in 2007.
The report shows that the fourth quarter of the year has previously been a lucrative phase for graphics card vendors, with 26.51 million units sold in the period in 2007. It’s also worth noting that this figure for 2007 represented an increase of 25.9 per cent over the same timeframe in 2006. By comparison, the number of graphics cards sold plunged to just 15.2 million in the fourth quarter of 2008.
Although it’s fair to say that most tech companies have taken a beating in the recent economic downturn, JPR points out that graphics cards have been particularly dramatically affected. “Markets in every corner of the economy — and every corner of the globe — contracted,” says JPR, “and the AIB market was no exception.” However, the firm adds that this is “really an understatement, as the AIB market took a substantially bigger beating than the closely related markets for PCs and workstations, as OEMs and the channel curtailed new orders and ran down inventories.”
The research firm notes that sales of PCs and workstations dropped by around ten percent in comparison, but emphatically states that this doesn’t mean that chipsets with integrated graphics have been encroaching on discrete graphics cards’ territory. JPR notes that the market share from integrated graphics in the fourth quarter of 2008 was 40.6 percent, which was only marginally up from the 40.2 percent in the same period in 2007. Instead, JPR suggests that PC manufacturers have relied on existing inventories of old graphics cards rather than buying in new ones.
“Deeper inventories are a safety valve,” explains JPR, “making it a lot easier for buyers to stop buying — at least for the short term — while allowing them some time to sort out the situation and determine how to properly adjust orders to meet the new, lower run-rate. Drain down inventory for a bit to keep orders filled near term, and build it back up later when the coast is clear.” This is bad news for the graphics cars business, though, and JPR notes that “in any industry where deep inventories can act as a buffer between supply and demand, the extent of the impact during a downturn is likely to be more pronounced. “
Will you be upgrading your graphics card in the near future? Let us know your thoughts in the forums.
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Discuss in the forums Replymy 8800ultra still runs all my games fine and there have been two major card releases since that was cutting edge. why would i want to upgrade it?
I think that's the main reason. Most games currently coming out are ports of console games, and don't need anything more powerful than an 8800, unless you play on ridiculously high resolutions.
Maybe if they left more time between the new gfx card releases and spent more time on research giving us a genuinely faster card, not just a few percent. People would be more inclined to pay for a new card.
And I agree about the nVidia's "innovation" :D
In the meantime the sales are probably slower.
+1
(But I'll be upgrading to a bigger monitor as well, so I'll need the grunt)
The PC gaming market is fine. The only difference today from what we had 10 years ago, is that the PC now has competition.
From a pure technological perspective the competition isn't anything special. It is how the competition is doing business that it is different from the PC. And that is having a couple of companies both hyping they're platform and giving a good out of the box experience.
This is what I've been saying all along and what I think companies like AMD, Intel and NVIDIA and even Microsoft don't seam to listen.
The PC gaming market has always been the technology pusher. Has consoles gain market penetration developers don't invest so much on pushing
graphics and physics since consoles don't evolve as fast as PCs. Todays computer technology is way beyond consoles. The new Windows 7 and DX11 cards
bring alot of new stuff, but developers investing on that in the short term greatly depends on how the market will answer the next windows release.
If you look at the market you'll see that most games out there still resort to DX 9 sort of graphics. There aren't many games out there pushing hardware accelerated physics, or DX10 sort of effects.
But we don't even need to mention this technologies. Something as simple as having bigger and better textures could be achieved in todays hardware. Yet developers choose not to. Why?
Because consoles can't handle those bigger textures that only 1GB cards can. Do keep in mind that this is rare. We are in the second DX 10 generation of graphics card and still this technologies haven't had much penetration.
The end result is that we can play almost all games out there with AA plus AF at 1080p with a graphics card that is no more than $150.
This isn't necessarly a bad thing. But it is bad for the companies that create this new tech. If people don't need to buy anything better they'll stick with what they have.
Obviously in the short term companies like NVIDIA and AMD gain money due to the chips they have implemented on consoles. But in the long run they loose money because the customers that pay for the technology
don't find the necessity to buy better technology. Operating system makers such as Microsoft also get hit by this because lets face it one of the reasons people upgraded they're pcs with the new OS was to play games.
The problem is that companies that depend on the PC architecture to get the bucks also feel shy to unite on giving it the necessary treatment.
Things like having a gamer mode implemented in the windows system could have been made. Having an hardware based protection system to avoid piracy could be implemented already just like it exists on the consoles.
Achieving an agreement in that each and every pc should have a label stating if it is gaming capable or not. That doesn't necessarly mean that it is more expensive. only that it has a graphics card capable of achieving decent performance for gaming. The windows promoted rating system is a good thing, but games need to come with those ratings on the box or else not much sucess there.
Today you can get a PC that is leaps and bounds faster and better than any console at an affordable price. The only problem really is marketing and presentation.
PC has the advantage of having people pick different programs for what they want. Steam, X-Fire, Gamespy. But it wouldn't be bad to have an easy to use game mode built into windows just like there is on the consoles.
Another point is really marketing. This companies could use the PC Gaming Alliance to market the PC has a good AND cheap gaming machine. They could share costs and it would end up helping every single company.
Final point. THE GAMING PC SHOULD NOT BE SEEN AS A DIFFERENT BEAST FROM THE CONSOLES. I keep seeing lots of marketing , lots of news, reviews that litteraly put the PC in one side and the consoles in the other.
Sorry but from my perspective a gaming PC is no different than a console. It is an entertainment machine that allows me to watch movies, play games and so on. So why seperate the two?
This comments don't necessarly mean PC gaming is doing bad. It isn't. Not at all. It is very very profitable. But like in every market when competition appears people will switch products.
I think the connection is clear. Some people switching to consoles + PC gamers that don't see the need for anything better = lower sales
the price of upgrade vs preformance gains is not worth it atm.
Sorry, didn't read, blocks of giant text is hard to read and follow. :|
On-topic though.. I agree, releasing 60 versions of the same card doesn't exactly help the market. That and there's so little difference between the different cards except for the ultra high-end versions of each series. Why can't they just introduce 3 or 4 versions of a series and leave it at that?
Meh.
People have been told so many times that times are bad that they started believing it and stop buying products.
Then i thought... wait a minute! Q4 2007 was a much more interesting time to go upgrading. Many people were moving from 6600's and 7-series to the 8800 series, and even more were moving there from the ATI side. It was a great, sensible upgrade that offered real performance increases, unlocking higher quality settings and resolutions that would previously be unheard of.
Now though, we are still coasting on the fantastic action we had in the summer. Only very few demanding games have come out since then, and current hardware is very able to play anything we can imagine throwing at it. Even a single sub-$200 HD4870 or GTX260 is very capable of playing anything you throw at it on 19x12. Even on the upper-extreme 30" resolution of 2560x1600 a lot of games are playable, and when you have the money to pay for a 30"screen, you can just as easily pop in a second card for higher settings and super-playability.
Why upgrade?
We're actually in the 3rd generation of DX10 hardware, at least nVidia is [G8x, G9x, G200] whereas AMD is in the 2nd generation [R600, R700].
Other than that I don't agree with everything you said but partially I couldn't agree more. The part about consoles holding back games' development in particular.
Let's just wait what they say in 2010 after the release of DX11/SM5.0 hardware. It'll be the same story as with Vista/DX10.
Not.
This sums it up perfectly.
And we need more amazing games, Crysis is 2 years old and it remains the top benchmark, we need replacements!
This sums up the hole point!