1 Positive Sign for NVIDIA Corporation's GeForce GTX 1060

Image credit: NVIDIA. 

Earlier this month, graphics specialist NVIDIA (NVDA -3.87%) announced a mid-range graphics card called the GeForce GTX 1060. The company says that the manufacturer's suggested retail price, or MSRP, for this product is $249. However, the company's own Founders Edition model sells for $299, and various partner cards based on the GTX 1060 range anywhere from $250 to $329.

As of a recent check of Newegg.com, a popular online computer component reseller, the GTX 1060 cards are currently sold out. Here's why this could potentially be a positive sign for the GTX 1060.

Selling out even well above MSRP

The GeForce GTX 1060 is the direct successor to the GeForce GTX 960, which launched in January 2015. Cards based on the GTX 960 came in starting at $199 (with some of the more exotic models coming in at higher prices), while the GTX 1060 cards start at $249 and can go past $300.

It's important to note that even though all of these cards use the same GTX 1060 chip from NVIDIA, boards based on that chip aren't all created equal. Some are very cost-optimized, offering just the bare essentials, while others have more advanced features such as better cooling, more sophisticated power-delivery systems, and so on. 

If it were only the $250 GTX 1060 cards that were selling well, that alone would probably represent a success for NVIDIA (since the prior generation GTX 960 started at $199). However, the fact that even the higher-priced boards implementing the GTX 1060 seem to be doing well in the marketplace (models at $279-plus from various vendors are also sold out on Newegg) could bode well for the desirability of the GTX 1060 at large. 

NVIDIA's average-selling-price growth story remains intact

A large part of the growth that NVIDIA has enjoyed in the gaming graphics processor market has been from growth in average selling price. So far in this generation, NVIDIA's new Pascal-based gaming graphics cards have come priced at meaningfully higher levels than their older Maxwell-based counterparts, as you can see in the table below:

Prices reflect NVIDIA's MSRP figures at launch. Chart by author.

If NVIDIA sells roughly the same mix of GTX x60, x70, x80, and Titan X cards during this product cycle as it did during the last cycle, then average selling prices would likely be up significantly given the SKU-to-SKU increases we're seeing here. If the company also sees unit growth assuming a constant mix, the company would be poised for quite robust revenue growth in its gaming graphics processor business in the coming year. 

Very strong execution during this product cycle

It's worth mentioning that NVIDIA's execution around its Pascal-architecture based products has been nothing short of excellent. Between April 5 and Aug. 2, the company will have gone into volume production on no fewer than four Pascal-based chips: GP100 (data center), GP102 (ultra-high-end gaming), GP104 (high-end gaming), and GP106 (mid-range gaming).

The only products left in the Pascal lineup that haven't been announced are the entry-level GP107 and GP108 graphics processors, but they're not as important to the company's gaming business as the higher-end products that have been announced.

The keys for NVIDIA now will be to keep the momentum up, and frankly, to not drop the ball in getting future graphics products out in a timely fashion. In other words, the company can't rest on its laurels.