A report from VR World claims that graphics specialist NVIDIA (NASDAQ:NVDA) is planning to launch its next-generation ultra-enthusiast graphics processor, which will likely be sold under the company's Titan branding at the Gamescom video game trade show in late August.
The report says that NVIDIA is aiming to deliver at least a 50% performance improvement over the company's current high-end gaming graphics processor, known as the GeForce GTX 1080.
If the timing and performance levels are true, then this should serve to boost the company's already booming gaming graphics processor business.
A brief history of NVIDIA's Titan family
Historically, NVIDIA has priced its single graphics processor, Titan-branded products at $999. This was the case for the original Titan, the Titan Black, and the Titan X.
Interestingly, it was never too long before NVIDIA released much cheaper cards that offered similar performance to the Titan part of a given generation. The original Titan came out in Feb. 2013, with the slightly cut-down GeForce GTX 780 coming in May, just three months later.
Then, in Nov. 2013, NVIDIA released the GeForce GTX 780 Ti, a part that was actually cheaper and faster than the Titan. In order to keep the Titan branding relevant, the company released the Titan Black, a product featuring essentially the same silicon as the 780 Ti but with more memory, some professional-oriented features (namely fast double precision arithmetic support) fused off, and slightly higher frequencies.
The next, and most recent Titan, came in March 2015, based on an entirely new chip aimed at high-end gamers (as well as high-end workstation users and hyper-scale data centers). Three months later, a slightly cut-down variant known as the 980 Ti arrived, priced at $649, practically rendering the Titan X obsolete for gaming applications.
GeForce GTX 1080 is already a $699 card; expect prices north of $999
NVIDIA's current best desktop graphics card is the GeForce GTX 1080. NVIDIA's says its recommended pricing for the GTX 1080 is $599, but its own card based on the processor sells for $699. Partner cards, which range in features/quality, seem to be selling anywhere from $610 to north of $700.
Price tends to follow performance, and if the GTX 1080 can command $700+, then a product that launches just a few months later (timing is important here; a certain level of performance today is worth more than a certain level of performance a year from now) and is 50% faster should be able to command at least a 50% pricing premium.
Indeed, according to Tech Power Up, the GeForce GTX 1080 Founders Edition performs 21% better than the GeForce GTX 1070 Founders Edition at 2560x1440 resolution, and 22% better at 3840x2160 resolution ("4K"). The 1080 commands a 56% premium to the 1070, well above the additional performance that it affords.
To that end, I would be surprised if the next Titan were "just" 50% more expensive than the 1080 for 50% more performance, which -- if the performance claim is true -- would put it at around $1,050. It seems more likely to me that NVIDIA would pitch such a product to the kind of person interested in buying two GeForce GTX 1080s, so a price of around $1400 wouldn't come as a surprise.
Likely not a ton of buyers, but should be a very profitable product
There will always be those gamers/PC enthusiasts willing to pay a large premium in order to have the best. Shortly after the launch of the GTX 1080, it wasn't uncommon to see scalpers successfully reselling $699 GeForce GTX 1080s for several hundred dollars more than retail.
As such, I could see a $1400-plus Titan product doing reasonably well in the marketplace. It likely won't be a particularly high volume seller, but the per-unit revenue and margin dollars should be quite good, ultimately helping along the average selling price growth story that the company has enjoyed with its gaming products for quite some time.