It wasn't too long ago that a shortage of graphics cards pushed prices into the stratosphere. The concept of a mainstream graphics card all but vanished amid insatiable demand from gamers and cryptocurrency miners.
The market has now shifted hard in the other direction. Graphics cards are widely available, prices have come back down to earth, and Nvidia (NVDA +1.31%) and Advanced Micro Devices (AMD +1.15%) are duking it out on price.
NASDAQ: AMD
Key Data Points
A last-minute price cut
AMD unveiled the $269 RX 7600 graphics card on Wednesday, just one day before the product was set to go on sale. That price tag was reportedly a recent development. According to VideoCardz, AMD had previously communicated that the graphics card would be priced at $299.
This decision comes on the heels of Nvidia's recent reveal of three new RTX 4000 graphics cards. While only the $399 RTX 4060 Ti is currently available, the $299 RTX 4060 set to launch in July was likely a driving force behind AMD's pricing move. AMD's new card now undercuts Nvidia by about 10%.
Competing with itself
One problem AMD faces is that there are plenty of its own last-gen graphics cards available. This wouldn't matter as much if the RX 7600 offered huge performance gains. But it doesn't.
Tom's Hardware found that the RX 7600 barely edges out the last-gen RX 6650 XT across 15 games at a 1080p resolution, and it beats the RX 6600 XT by just a small margin.
Here's the issue: Those last-gen AMD cards have fallen significantly in price since launch. Right now on Newegg, the RX 6650 XT can be found as low as $259, while the RX 6600 XT goes for as little as $249. The RX 6700, which beats AMD's new card in performance, can be found for the same $269 price. Prices on these older cards fluctuate, and eventually stock levels will be depleted. But for now, the RX 7600 faces some stiff competition.
AMD does bring some new features to the table with the RX 7600, although they probably don't matter to most potential buyers. Performance for artificial intelligence (AI) workloads has been improved, and theoretical compute performance has doubled from the last-gen cards. Unfortunately, none of that translates into meaningful improvements in real-world gaming performance.
Tom's Hardware's conclusion is that the RX 7600 is not a must-have graphics card. It doesn't move the performance needle very far forward, and if retail pricing on the last-gen RX 6000 cards falls further, the argument for buying the RX 7600 weakens considerably.
Nvidia's RTX 4060 looms
AMD's decision to price the RX 7600 below the upcoming RTX 4060 likely means that the company expects Nvidia's new mainstream card to win out on performance. The RTX 4060 Ti, which is much pricier at $399, provides about 50% higher average frame rates at 1080p than the RX 7600.
The performance gap between the RX 7600 and the $299 RTX 4060 will be smaller, but it may still be big enough to make the RX 7600 a tough sell. And Nvidia's RTX 4000 series cards have some features that AMD's cards lack. Notably, Nvidia's DLSS frame generation tech can boost frame rates by using AI to produce new frames on the fly, and its cards outperform in games that support ray tracing.
AMD's RX 7600 looks like it will be a decent option for gamers on a budget who don't care about the extra features that come with Nvidia's cards. But it's certainly not a game changer for AMD's graphics business.
