GeForce GPUs are 80% of EVGA's revenue—but it's cutting ties with Nvidia anyway
Graphics card manufacturer EVGA has made a name for itself manufacturing and selling Nvidia's GeForce GPUs for two decades, including some of the more attractively priced options on the market. But according to the YouTubers at Gamers Nexus, analyst Jon Peddie, and an EVGA forum post, EVGA is officially terminating its relationship with Nvidia and will not be manufacturing cards based on the company's RTX 4000-series GPUs.
EVGA's graphics cards have exclusively used Nvidia GPUs since its founding in 1999, and according to Gamers Nexus, GeForce sales represent 80 percent of EVGA's revenue, making this a momentous and arguably company-endangering change. But EVGA CEO Andrew Han told Gamers Nexus that the decision was about "principle" rather than financials—Han complained about a lack of communication from Nvidia about new products, including information about pricing and availability.
Nvidia's pricing strategy was apparently another sore point for EVGA. Nvidia's first-party Founders Edition cards could often undercut the pricing of cards offered by EVGA and other vendors, forcing them to either lower prices or lose sales as a result.
Nvidia may not be entirely at fault here—the wider dynamics of the GPU market are also tough to navigate. As Peddie also points out, even as GPU costs have gone up, profit margins for the board partners that manufacture Nvidia GPUs have gone down. Modern high-end GPUs have massively higher power, cooling, and PCI Express signaling requirements than cards from just a few years ago, making them more expensive to design and manufacture, and reporting about the RTX 4000 series indicates that that trend is only going to continue.
EVGA also makes power supplies, motherboards, keyboards, mice, etc.
Also at Tom's Hardware, The Verge, and Notebookcheck.
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Self-harm or not, it is sad to see EVGA go:
Many tech fans and enthusiasts were shocked over the weekend by the news that EVGA, one of the more popular AIB manufacturers, would no longer produce graphics cards based on Nvidia GeForce GPUs. EVGA stated that their relationship with Nvidia was "abusive" and accused Nvidia of having a "severe lack of communication" when it came to pricing for graphics cards.
[...] However, a report from Igor's Lab claims that EVGA's issues with profits may have been somewhat self-inflicted. Igor notes that EVGA operates differently compared to other AIB producers like Asus, Gigabyte, and many others. Unlike those companies, EVGA outsources the circuit boards and coolers to third parties, which increases the overall cost of producing a card. Igor claims this outsourcing drops EVGA's profit margins to around 5%, as opposed to other manufacturers whose margins sit around 10%.
According to Igor, EVGA's generosity has also been one of their downfalls. EVGA's graphics cards have had significantly longer warranty periods than competitors, and EVGA has also offered a "step-up" program, allowing a consumer to upgrade their GPU should their current card be rendered "obsolete" by a new release.
Igor spoke to an anonymous competitor, who claimed that EVGA's strategy was "suicidal" and that "if it were profitable, we would have done it long ago."
It's fair to assume that EVGA is being truthful with their claims regarding Nvidia's abusive treatment of manufacturers. Nvidia has been known to set strict guidelines and deadlines for product releases. A report from JPR shows that Nvidia's guidelines have allowed Nvidia's profits to grow rapidly, while the AIB manufacturer's profit margins have fallen nearly 20% since 2000.
Is it not profitable to stand behind your product, or could it be just not profitable enough?
Previously: EVGA Exits the GPU Market, Blaming Nvidia
(Score: 2) by Revek on Sunday September 18 2022, @03:47PM
All my video cards are evga video cards.
This page was generated by a Swarm of Roaming Elephants
(Score: 2) by HammeredGlass on Sunday September 18 2022, @10:09PM
I have been an advocate against nVidia ever since.
*also for locking PhysX behind a proprietary hardware platform.
(Score: 2, Disagree) by sgleysti on Sunday September 18 2022, @11:17PM (2 children)
For a profit-seeking corporation, it's never about principle. It's always about profit, the future of the company, etc.
(Score: 0) by Anonymous Coward on Monday September 19 2022, @02:22PM
EVGA is a private company. It can be about the principle as much as the private shareholders are.
Once you go public you can lose control and power to stick to your principles (unless maybe you manage to do that golden share thing: https://www.investopedia.com/terms/g/goldenshare.asp [investopedia.com] )
(Score: 4, Insightful) by gnuman on Monday September 19 2022, @02:37PM
It's a principle that profit margins for card makers are going down while now they are stuck with cryptocrash stock of "gaming" cards that they can't move. Also, things like nVidia is not providing them with MSRP prior to launch or allowing manufacturers to sell their cards at whatever pricepoint they want, is not good.
So, it's a principle of getting treated like shit *and* recently losing money on every card in addition to being treated like shit, making this decision easier. IFF nVidia treated their OEMs decently, I think EVGA would stay with them.
(Score: 1) by echostorm on Monday September 19 2022, @04:23AM (1 child)
still have that lifetime warranty on my 9800gtx .. wonder what theyd give me for it these days.
Its sad, EVGA was the reason I still bought NVIDIA cards. Guess my next one is going to be an AMD.
(Score: 2) by JustNiz on Monday September 19 2022, @11:51PM
> EVGA was the reason I still bought NVIDIA cards. Guess my next one is going to be an AMD.
Good luck dealing with AMD's instability and incompatibility compared to nVidia, and relative lack of functionalities such as CUDA.