In the world of discrete PC graphics chips, there are only two vendors remaining: Advanced Micro Devices (NASDAQ:AMD) and NVIDIA (NASDAQ:NVDA). Both companies produce very high quality products -- although both are guilty of producing lemons now and again. AMD, in recent years, has positioned its products as the more "budget friendly" options, while NVIDIA generally commands a premium for its products. 

However, on Sept. 18, NVIDIA launched a pair of graphics chips -- the GTX 980 and its de-featured counterpart, the GTX 970 -- that appears to have fundamentally disrupted the high-end desktop gaming GPU landscape. 

In fact, after reading several product reviews and watching how quickly these cards have been going out of stock on various e-tailers' websites, it's clear to me that cards based on these graphics processors should sell like hotcakes. 

The GTX 970 and 980 perform well
According to the review of the 970 and 980 on Tom's Hardware, the $549 GTX 980 is the fastest graphics card in the site's test suite in 1920-by-1080 and 3840-by-2160 gaming, edging past the prior generation (and more expensive) GTX 780 Ti and coming in comfortably ahead of AMD's finest R290X graphics card. 

In addition to leadership performance, reviewers have highlighted the power efficiency of the cards, which seems to be well ahead of NVIDIA's prior efforts, as well as AMD's current best. 

More importantly, though, is that the much cheaper 970, according to Tom's Hardware, is about equal to the R290X in 1920-by-1080 gaming as well as 3840-by-2160 gaming. The key, though, is that the GTX 970 is supposed to cost just $330 while a quick scan of Newegg shows that the cheapest R290X lists for $490 -- although I wouldn't be surprised if an R290X could be had elsewhere for cheaper. 

The real story here seems to be that NVIDIA is offering much higher performance than its prior generation GTX 780/780 Ti cards but is doing so with a much better cost structure. 

Let's dig in a little deeper, shall we? 

Die size, die size, die size!
Last year, AMD lauched a line of graphics cards codenamed "Hawaii," which is the GPU now known as the R290X. According to TechPowerUp, this chip packs 6.2 billion transistors into an area of 438 square millimeters. (Note that smaller chips, on a given manufacturing technology, are generally cheaper to build than larger ones.)

The AnandTech review of the R290X concluded that the R290X was generally faster than the GTX 780. NVIDIA responded with the GTX 780 Ti, which edged out the R290X, although do keep in mind that the 780 and 780 Ti are built with 7.1 billion transistors into an area of 551 square millimeters.

As of AnandTech's GTX 780 Ti review, the pricing on the 780 Ti was $700, the R290X was $550, and the plain 780 was $500, roughly reflecting performance levels. 

So, what NVIDIA was able to do with the 970 and 980 was provide a chip that only packed 5.2 billion transistors into an area of 398 square millimeters. This presumably takes down NVIDIA's cost structure on the chips, allowing it to price more aggressively and helping it to gain share. 

NVIDA's strategy is working, but AMD is sure to respond
As of this writing, it is very difficult to purchase either a GTX 970 or 980 from popular e-tailers such as Amazon.com and Newegg. Most models are out of stock. While I suspect that availability will probably improve over the coming weeks, it's clear that these cards offer a pretty substantial value proposition to PC gamers, particularly those who have been eagerly awaiting a new GPU architecture. 

I expect that rival AMD will respond with price cuts on its current graphics chips. Further, according to site Tech4Gamers, AMD has a GPU-related event scheduled for Sept. 25. Investors interested in both AMD and NVIDIA should pay close attention to the material that comes out of that. 

Foolish bottom line
As far as I can tell, NVIDIA's new high-end desktop-oriented graphics cards look incredibly competitive from a performance, power, price, and cost structure perspective. My guess is that these will sell extremely well, helping to drive revenue and unit-share gains in the gaming GPU market for NVIDIA relative to its competition.

Ashraf Eassa has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Apple, and NVIDIA and owns shares of Amazon.com and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.