Hi, this is Wayne again with a topic “Inside the EVGA-Nvidia Breakup”.
You might think the biggest breakup in Tech History was Bill and Melinda Gates, but the one we just saw between EVGA and Nvidia has to be in the top. Five EVGA recently announced that they would completely stop producing and selling nvidia-based graphics cards. Huge news considering EVGA owned 40 percent of the North American market, share for NVIDIA gpus, with graphics cards being as coveted and expensive as they are why the heck did EVGA decide to kill this seemingly Golden Goose, I mean: do they not like money we reached out To EVGA to get some more details, but unsurprisingly, they didn’t want to give more details other than the public statements they’ve already made, but still we’d like to thank Jacob Freeman for sending us a rejection message that was nicer than anything I’ve ever gotten on Tinder. I’Ve. Never been on Tinder, but that’s John speaking, but the good news is we’re not totally in the dark about.
What’S going on. So, let’s get started by pointing out the graphics card. Business actually isn’t as lucrative as you might think. It is despite the high prices for premium models and the high demand we saw during the pandemic.
Aib Partners like EVGA, Asus, gigabyte and many others are usually only running profit margins somewhere between 5 and 10 percent on their graphics cards. After all, they have to pay lots of money to Nvidia and AMD for the gpus themselves, and a recent report indicated that, despite the fact that EVGA has long been considered part of the upper echelon of graphics cards, manufacturers in terms of support and overall quality, their Margins actually lagged behind most of their competitors because they outsourced much of the actual manufacturing, meaning evga’s operations mostly consisted of just engineering the cards, While others physically assembled them and although Outsourcing is usually associated with cutting costs, it appears that, in this case, EVGA sacrificed money For convenience and scale and remember how we just mentioned EVGA support. The company was rather generous with its warranty and repair policies, which was great for consumers, but also likely cut into the company’s already narrow margins even further, especially as they didn’t sell at the same volumes as some of their competitors. As many of these, other companies have a more Global reach and also sell AMD radeon-based cards, so this at least partially explains why EVGA is getting out of the graphics card business entirely, but not about the reported specific beefs they had with Nvidia as a partner. We’Ll tell you about those right after we think freshbooks for sponsoring today’s video, whether you own a business or do freelance work freshbooks is is designed to make accounting and invoicing easier for you with the ability to integrate with over a hundred different apps. There’S always a simple way for you to connect with your team and clients.
It’S easy to start and their award-winning support. Staff is always there to help. Take out some of the unnecessary stress in your life and start your first 30 days free with no credit card required go to freshbooks.com techwiki Consumers won’t be strangers to how nvidia’s pricing is famously hard to predict, with announcement day, msrps, often differing significantly from projections by The tech media, but it might come as a surprise that aib Partners also find out official pricing around the same time as you and me at home, do and by then the cards are already in production without the aib partner, even knowing how much money they owe Nvidia not to mention that Nvidia is rather strict about designs. It allows aib Partners to create, and while it may help protect stability and consistency across the product lineup, regardless of who you buy your graphics card from and may stop aibs from designing something.
Oh overly exotic that ends up not working well and hurting nvidia’s reputation. It also hamstrings the aib’s ability to innovate and set themselves apart from each other. So while both sides seem to have valid concerns, at the end of the day, a smaller company like EVGA was taking huge losses on higher end cards, especially as they compete against nvidia’s own Founders, edition cards, which are the cheapest on the market and the models that Consumers who simply want a GPU without extra bells and whistles and dragon decals will gravitate towards. Needless to say, the opaque pricing and the fact that they were getting undercut by Nvidia itself left EVGA, feeling more than a little miffed and left them without much of a reason to carry on with their graphics card business.
In the wake of both the crypto crash and the higher production costs, and thus even thinner margins of the new RTX 4000 series, unlike many of their competitors, which make both Nvidia and AMD based graphics cards, EVGA exclusively made GeForce products. So they don’t have a Radeon lineup to fall back on and even if they did, they’d still be facing the same issues we mentioned in the first half of this video. The good news for EVGA is that they have a successful power supply business that has much higher profit margins that the company reportedly plans to Soldier on with. But if you had your heart set on a FTW Lovelace card for your next gaming rig, sadly you’re just gon na have to take the L, hey and thanks to you for taking this train all the way to the end of the video. The video train, like the video, if you liked it dislike it, if you did disliked it check out our other videos, comment below with video suggestions and don’t forget to subscribe and follow.
I’Ve talked to you so much about this and I’m frankly, I’m sick of it. .