AIB Partners to GN: Gibbo Was Right About AMD Price Changing

By Published August 17, 2017 at 11:50 am
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Following the initial rumors stemming from an Overclockers.co.uk post about Vega price soon changing, multiple AIB partners reached out to GamersNexus – and vice versa – to discuss the truth of the content. The post by Gibbo of Overclockers suggested that launch rebates and MDF would be expiring from AMD for Vega, which would drive pricing upward as retailers scramble to make a profit on the new GPU. Launch pricing of Vega 64 was supposed to be $500, but quickly shot to $600 USD in the wake of immediate inventory selling out. This is also why the packs exist – it enables AMD to “lower” the pricing of Vega by making return on other components.

In speaking with different sources from different companies that work with AMD, GamersNexus learned that “Gibbo is right” regarding the AMD rebate expiry and subsequent price jump. AMD purportedly provided the top retailers and etailers with a $499 price on Vega 64, coupling sale of the card with a rebate to reduce spend by retailers, and therefore use leverage to force the lower price. The $100 rebate from AMD is already expiring, hence the price jump by retailers who need return. Rebates were included as a means to encourage retailers to try to sell at the lower $499 price. With those expiring, leverage is gone and retailers/etailers return to their own price structure, as margins are exceptionally low on this product.

We also learned from the AIB partners that AMD provided a list of retailers that board partners should sell to, as those would be the companies most likely holding rebates to best support the lower pricing of the product. We are not clear if any such rebates will be reinstated at time of partner card launch, and have not been given information to lead us to either conclusion. At this point, our understanding is that said initial rebates have expired – they were only available for the first wave of cards – and retailers now largely have free rein on pricing. The packs are still in-stock at some stores and, from what we’ve been told by a third, reliable source, have seen highest allocation since Vega’s launch. Our present understanding is that Newegg received 60-70 units allocated for “packs” on their store, but a significantly lower number of standalone cards. That’d explain why we saw the inventory and sell-through behavior at launch.

This affects Vega 64 as of now. We are not sure of the impact on Vega 56.

We reached out to AMD for comment on August 15 and have received no response.

- Steve Burke

Last modified on August 17, 2017 at 11:50 am
Steve Burke

Steve started GamersNexus back when it was just a cool name, and now it's grown into an expansive website with an overwhelming amount of features. He recalls his first difficult decision with GN's direction: "I didn't know whether or not I wanted 'Gamers' to have a possessive apostrophe -- I mean, grammatically it should, but I didn't like it in the name. It was ugly. I also had people who were typing apostrophes into the address bar - sigh. It made sense to just leave it as 'Gamers.'"

First world problems, Steve. First world problems.

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