2022 has become a dismal year for the gaming GPU market, not only due to the side effects of the mining bubble and its demise, but also due to the consequences of COVID-19 on the economy. However, we are not going to talk about the general situation this time, but about the delicate situation of AMD graphics cards. And it is that, without intending to be destructive, despite its excellent graphics cards things do not look good for Radeon house
The current situation in the AMD graphics card market is worrying. NVIDIA’s dominance of the market is absolute and they seem to be unopposed, allowing them to do as they please. We already saw it a few years ago with an AMD out of action in the processor market and an Intel that rested on its laurels for a few years, giving it an advantage over its greatest rival. However, this has not happened with the GeForce and the Radeon has not been the same as with the Ryzen. And no, we are not saying it just to say it, we are referring to the sales and market share figures.
2022 has been disastrous for AMD graphics cards
The sum of all the dedicated graphics cards that have been sold in all of 2022 is 6.9 million in all of 2022, in terms of gaming laptops with dedicated graphics chip and memory, the figure is 7.1 million, which makes a total than 14 million units. A figure that is the lowest since 2005. However, we must learn to differentiate between units sold and distributed. The former are those found in the possession of end users, the latter those found in store and retail warehouses.
Yes, we break it down by brand, and starting with AMD graphics cards, we find that during the first quarter of 2022, 3.21 million units were distributed, in the second, 2.07 million, and in the third, only 0.69 million. Making the third quarter one of the worst for Radeon, although it can be influenced. As for Intel, we don’t even need to mention that the launch of its A770 has been more of a game of light and smoke.
Instead, demand for NVIDIA remains very strong and they are overwhelmingly establishing themselves as industry leaders. And we are not saying it just to say, only in the first quarter of 2022 those of Jen Hsen Huang distributed 10.04 million graphics cards, to distribute 8.25 million in the second and 5.93 million in the third. All this is bad news for Lisa Su’s brand, which has the safeguard of sales of console chips, but with much lower margins than those of PC.
AMD’s mistake: making Ryzen compete against Radeon
The fact of having more market share is also having more mental share and thus being able to get more money from users to implement new features on your future graphics cards. Although the key to NVIDIA’s success comes from the way in which they present their new generations and that they do not compete against themselves when the chips are manufactured. On the other hand, AMD graphics cards do not and that is one of the big problems.
For your understanding, AMD has put so many products under one manufacturing node that their Ryzen and Radeon often compete for the same manufacturing resources. For Lisa Su’s company, making graphics cards is not their main business, but a completely secondary one. All this leads to the fact that, although their cards are of good quality and good enough, they have fewer resources and this translates into not being able to make models at the same time that have caused the existence of a de facto monopoly for NVIDIA that in recent quarters has reached close to 90% of the market share.
And what happens when a manufacturer has so much power? Well, this translates into abusive prices for the end user. The competition from NVIDIA is not strong enough and this affects us all and that is why it is a big problem that has consequences on several levels.
This situation is bad for the PC Gaming market
Now, in order to maintain its competitive advantage, NVIDIA has no choice but to raise the prices of its graphics cards, which they can do due to the enormous market share they have. All of this is caused by the fact that designing and manufacturing hardware is increasingly expensive, and users need a high volume of purchases in order to distribute and alleviate said costs. The result if it is not achieved are graphics cards at prices that a few years ago were unthinkable, which is what is happening today.
In PC games this means that the adoption of new technologies is delayed, as is the case with Ray Tracing, which after almost five years since its launch is seen as something optional and unnecessary. For being unhelpful? No, due to the fact that the graphics cards in most PCs cannot run it and that has been NVIDIA’s bet all this time. All this causes a cycle in which users to play games on their PC do not need to renew their graphics card.
Curiously, the only one that has launched a graphics card for this segment recently is Intel, but its ARC A770 is as if it did not exist, it is impossible to find it and a large part of the public does not know that it exists. All they know is that there are $1,000+ graphics cards that just came out. He looks over them, sees their price and passes by.
AMD graphics cards are the queens in console
What’s more, both NVIDIA and AMD should learn once and for all that not everyone is willing to pay the equivalent of a mortgage or rent on a graphics card. Rather, the biggest competition out there for their Gaming GPUs is the game consoles that are the main alternative and the main rival. That is, they do not compete against the other brand, but for the time spent playing by the users.
And this is where the problem we have appears where it seems that the console market for AMD has been divided, if we rule out the Nintendo Switch, and that of the PC for NVIDIA. The red brand knows very well that it has a better chance of selling the PS5 or Xbox chip than its Radeon chip and they have preference. It is not only that fewer units are distributed due to less demand, it is that the manufacturer of three letters itself manufactures fewer units for PC to give priority to consoles where they have juicy contracts with SONY and Microsoft that are a continuous source of money for years.
