Nvidia has held an investor day during which it has proudly boasted the GeForce RTX series is off "to a great start". Nvidia makes the surprising claim that its Turing GPU has enjoyed a more successful launch than Pascal, and that the majority of its customers are happy to pay a price increase for the next-gen.
Now, there really is quite a lot to unpack here as Nvidia presents a masterclass in skewed misinformation. We’ve noticed a few sites have blindly parroted Nvidia’s marketing when what’s being presented is a long, long way from the truth.
Nvidia RTX Launch Sales Revenue
We’ll begin with the ‘$299 Launch Sell Through’ which is launch-aligned to the first eight weeks of Pascal and Turing’s sales. It’s an art form, how Nvidia has bent this information to give its investors exactly what they want to see.
The raw data Nvidia has provided states the revenue from $299+ graphics cards is 45% higher from Turing GPUs than it was Pascal, when aligned to the first eight weeks of each GPU’s launch.
Pascal debuted on May 27th, 2016, with the GeForce GTX 1080, priced at $499. A fortnight later, the GeForce GTX 1070 launched for $379 MSRP. The GeForce GTX 1060 6GB launched eight weeks later priced at $249-299 and is therefore probably excluded from this data.
Turing debuted with the GeForce RTX 2080 on September 20th, 2018, priced at $699 MSRP, swiftly followed by the $999+ RTX 2080 Ti on September 27th, and the $499 RTX 2070 on October 17th.
Nvidia is comparing two graphics card launches against three, and it’s also comparing the revenue between graphics cards that are potentially 100% more expensive than the other. The top-of-the-line GTX 1080 costs the same as the bottom rung RTX 2070, and it’s well under half the price an RTX 2080 Ti usually costs.
The data Nvidia has given investors tells us that Team Green earned 45% more revenue when offering 50% more product at up to 2x an increase in price. This can only mean that Nvidia’s sales figures have dropped significantly between Pascal and Turing’s launches. However, Nvidia has been able to paper over the cracks because a core set of customers were willing to meet these massive price rises, and the first 8 weeks of GPU sales are surely made up by a core set of fans.
Nvidia RTX Install Base
The second part is a pie chart that takes a look at the install base of GeForce GPU generations. This is the chart that actually has the most substance, even if the 50% chunk is smaller than the 48% chunk, which literally makes no sense.
According to this chart, 2% of Nvidia’s total gaming GPU install base has upgraded to Turing. This includes every GPU from the RTX 2080 Ti right down to the GeForce GTX 1660. The total install base for Pascal is still 25x larger, or 2500%. This implies a maximum of 4% of Pascal owners have upgraded to the latest generation. Approximately 1.2% of Steam users have an RTX graphics card according to the latest hardware survey, so these figures check out.
Unfortunately, Nvidia never actually provides concrete data on graphics card sales or its total install base, so we’re just left with a bunch of hypotheticals. Turing has been out half a year though, and ownership is at just 4% of Pascal’s. The remaining 48% of Nvidia’s GPU market is occupied by those with GTX 900 Series GPUs or older.
RTX Adopters Movin' On Up
And then we come to the real corker, Nvidia’s really quite strange ‘Majority Buying Up’ chart. This is all tied into the graphics card price increases as we moved from Pascal to Turing. We can see each tier of GPU from the x60 range up to the x80 Ti all moved up a price bracket.
For the 2% of Nvidia’s audience that upgraded to an RTX 20 Series graphics card, 90% of these also moved up a tier in costs. 90% of those with a GeForce RTX 2070, for example, were willing to pay $100 extra to move up to an RTX 2070 rather than stick at their current $399 pricing tier. 'Majority' is perhaps a strong term to use for 1.8% of your customer base.
This data makes my head spin a little. Not many people have upgraded, we know that for certain. Of the people that have upgraded, it seems pretty obvious that most aren’t going to stick to the price tier they’re currently on. Either you upgrade for a substantial performance increase or you don’t upgrade at all.
Upgrading from a $399 GTX 1070 to a $399 RTX 2060 is nearly pointless, likewise going from a $499 GTX 1080 to a $499 RTX 2070. There’s a performance gain to be had, for sure, but it’s clearly not enough of a difference for most people to actually justify going through with it. Who's going to spend $500-600 on an RTX 2070 for a few percentage points higher FPS than a GTX 1080?
On top of all that, good luck finding any of these graphics cards for the price points being stated. There are a few cheap versions around, sure, but the majority of these GPUs actually cost $100-$400 more than their MSRP. Again, if you're going to upgrade, you have to maintain your GPU tier to make it worthwhile from a performance perspective, let along the money involved.
You’ll have to pardon my French but this entire thing is bollocks. It doesn’t actually tell us anything about how successful Turing is; whether there has been a drop-off in sales, or if gamers are actually happy with a 20-40% price hike to maintain their current tier. Let us not forget this is the same Nvidia who said, just eight weeks ago, that GeForce RTX 20 series graphics card sales were “lower than expected,” revising revenue estimates down half a billion dollars. Come now Nvidia, we can’t be hoodwinked that easily.
Naturally, this was all a success for Nvidia. Since this data came to light its share value has increased by 3.48%, settling out at around $174.40 per share.