The most budget-friendly graphics card in NVIDIA's (NVDA -3.89%) RTX 4000 series is coming on June 29. The RTX 4060, priced at $299, will come about one month after the pricier RTX 4060 Ti was launched.
Like the RTX 4060 Ti, the RTX 4060 will likely provide minimal performance gains over its predecessor. According to Tom's Hardware, the RTX 4060 Ti is somewhere around 10% faster than the RTX 3060 Ti depending on the resolution. That's just not a huge improvement.
Among current-generation graphics cards, the RTX 4060 may be the best option at the $300 price point. But the collapse in demand for PCs has created a surplus of last-gen graphics cards, and prices have been falling off a cliff. These discounted graphics cards will be the toughest competition for NVIDIA's new mainstream product.
A tough sell
The closest competitor to NVIDIA's RTX 4060 will be the RX 6700 XT graphics card from Advanced Micro Devices (AMD -8.91%). The RX 6700 XT launched nearly two years ago at an official price of $479, but retail prices are now hovering just over $300. It's possible that the RTX 4060 launch will push that price even lower.
With both cards set to be available at approximately the same price, the argument for the RTX 4060 looks pretty weak. NVIDIA's graphics cards are better at ray tracing, which can add fancy graphical effects to games, and NVIDIA's AI-powered features can provide smoother gameplay. But the RTX 4060 is hindered by less memory and lower memory bandwidth than the AMD card. This won't matter at lower resolutions, but it will become a bottleneck at higher resolutions.
NVIDIA chose to include just 8 GB of memory and a 128-bit memory interface with the RTX 4060. The RX 6700 XT, in comparison, features 12 GB of memory and a 192-bit memory interface. In practical terms, playing graphically demanding games at high resolutions benefits from more memory and greater memory bandwidth. The RX 6700 XT has a clear edge on those fronts.
Tom's Hardware found that the RX 6700 XT is less than 10% slower than the $399 RTX 4060 Ti in a suite of games played at a 1440p resolution with ray tracing switched off. It's likely that the RTX 4060 will fall somewhere below the RX 6700 XT on this measure, although it may pull ahead with ray tracing enabled.
Pricing will be a major factor once the RTX 4060 is available. If the RX 6700 XT dips further in price, it will become hard to justify shelling out $300 for the RTX 4060. Some gamers will care enough about ray-tracing support to favor NVIDIA's products, but AMD's last-gen card would likely be a better option from every other angle.
A slow gaming recovery
While NVIDIA's data center business is booming thanks to AI demand, the gaming business is still well below peak levels. Gaming generated $2.24 billion in revenue during the first quarter of fiscal 2024, which ended April 30, down from $3.62 billion in the first quarter of the previous year. Global PC shipments were down 30% year over year in the first calendar quarter of 2023, creating a difficult environment for graphics card companies.
NVIDIA's RTX 4060 doesn't look like it will save the day. In addition to AMD's last-gen products, Intel's Arc graphics cards offer solid value in the mainstream portion of the market as well. For the first time in a few years, gamers on a budget have multiple options to choose from. The most competition in years plus the worst demand environment in years will make NVIDIA's gaming recovery a drawn-out process.
None of this has affected NVIDIA's stock price. Soaring demand for AI chips has pushed the company's market capitalization above $1 trillion. Even if the RTX 4060 is a complete dud, it likely won't matter to investors salivating over NVIDIA's AI potential. Still, gaming will remain an important market for NVIDIA, especially if the AI boom eventually fizzles out.
