AMD announces Radeon HD 7850 and 7870 price cuts

http://www.anandtech.com/show/6175/amd-radeon-hd-7800-series-price-cuts-new-game-bundle-inbound

The 7870 will now cost $250, and the 7850 $210.  Looks like the GeForce GTX 660 Ti got to be a reasonable value for the money for all of four days before AMD decided to put a stop to it.  Well, it has a little longer perhaps, as AMD's price cuts haven't made it to retail yet.

With a 212 mm^2 die size, a $250 price tag for the top bin still leaves plenty of room for AMD to make money.  At a launch price of $300, the GeForce GTX 660 Ti was priced in line with the Radeon HD 7870 and 7950.  It looks like AMD decided to put a stop to that.

This is an interesting shakeup for the entire market.  Assuming no other prices change, it's going to be hard to justify getting anything faster than a Radeon HD 7870--which both AMD's own Tahiti and Nvidia's entire GK104 lineup.  If you want to spend around $400 for a card, the GeForce GTX 670 is still priced in line with its performance relative to a Radeon HD 7950 and 7970.  But if you can get a Radeon HD 7870 that offers 80% of the performance for 63% of the price tag, it's hard to justify the GTX 670.

You can make a similar case against the Radeon HD 7950:  the 7870 offers about 90% of the performance for 75% of the price.  And against the top of the line 7970 GHz Edition, too:  the 7870 offers perhaps 70% of the performance for barely over half the price.  And why would you need anything faster than a 7870, anyway?

Actually, there is two good reasons:  Eyefinity and GPGPU.  Those are both niche markets, but Tahiti-based cards still make sense there.

But it now seems to me that AMD mostly wants to sell Cape Verde and Pitcairn based cards to gamers, and not Tahiti.  Tahiti isn't nearly as good as the other cards in performance per watt or per mm^2.  Some of that is GPGPU bloat, but I'm guessing that there were various ways that AMD had to guess what would work well on TSMC's then very new 28 nm process node, and some guesses ended up being wrong in ways that AMD found out soon enough to fix them in Pitcairn and Cape Verde.

The 7850 is, I think, less compelling as a card you'd go out and buy.  But if you can get it for $210, that should pretty much kill off the GeForce GTX 560 Ti and Radeon HD 6950.  With the Radeon HD 6870 disappearing, Nvidia could try to fill the price hole between the Radeon HD 7770 and 7850 with the GeForce GTX 560 and/or GTX 560 Ti.  Indeed, the GTX 560 is already there, and a decent value for the money at $170, with the disappearing Radeon HD 6870 no longer in a position to undercut it.

That's assuming that Nvidia doesn't cut prices themselves, of course.  But they're really in no position for a price war at the moment.  The problem with Kepler is that they're having trouble supplying cards at all, and never mind the price tag.  As for the GeForce GTX 560 and GTX 560 Ti, when you have to price the top bin of your 360 mm^2 die below the bottom bin of your competitor's 212 mm^2 die, you're in a heap of trouble.  That's really just a result of being a process node behind.

And, of course, it's assuming that the announced price cuts actually show up in retail in a timely manner.  AMD has made a practice this year of announcing new bins of cards that take months to show up.  The 7970 GHz Edition officially launched in June, then showed up in August.  The 900 MHz, 83 W version of a 7750 officially launched on June 1, and New Egg only has one SKU of it in stock nearly three months later.  AMD has promised a higher clocked 7950 bin, but it's an open question whether we'll see it before the 7950 is obsolete.  Still, that's only new bins; some of AMD's announced price cuts have happened well after the prices actually dropped at retail.

Nvidia could cut prices on GK104-based cards at some point.  But that assumes that they have a high volume and high yields.  The volume of chips coming back from TSMC should be good soon if it isn't yet, but their current pricing strategy makes it look like yields are disastrous.

You know what would fix Nvidia's trouble?  GK106 and GK107 showing up in large volume with good yields.  Speaking of which, where are they?