PC Parts are Headed in the Wrong Direction

Fig. 1: Our prediction of the only graphics card nVidia will release in the year 2026 (projected MSRP: $20,000)

Greetings. This article was painful to write. Every section hurt, and every section gets progressively more painful. But the truth can hurt, so read on.

The consumer PC world is headed down a bad path:

There is a major focus by PC part manufacturers to produce extremely expensive and overpowered products, with the mid-tiers and the low-end being neglected. There might be no annihilation and havoc in the personal computer sector immediately, but most consumers are unhappy. If things continue as they are, normal PC buyers may choose to opt out, shrinking the market significantly. With fewer and fewer customers in the long-term, some component manufacturers may find themselves facing their own end-of-life.

Come walk with me, friendly reader, down memory lane, and I will show you how we ended up here… and where we might be going next.
 

Looking Back at Better Times

The GTX 8800

Only a few short months after the Jurassic Age ended, nVidia launched the GTX 8800 in the year 2006. This card was priced slightly higher than the competition, but beat it by between 50-100%. That, on its own, would have made it an extremely good launch: A new card that provides double the performance at only a slightly higher cost! But there was more: the card was more power-efficient, and produced less noise. It was better in every way! People could not praise this launch enough, and it was looked back upon as one of the greatest PC part launches ever.

Due to space constraints, I cannot link all the glowing reviews, or even summarize the praise for the GTX 8800 launch… but here is ExtremeTech analyzing the launch ten years later!

The i5-2500K

Prior to 2010, the landscape was dominated by single-core and dual-core CPUs. Intel’s quad-cores were extremely expensive (up to $1000), and AMD’s were not competitive. In 2010, Intel launched the i5-2500K. This new quad-core ~$200 CPU matched or beat the quad-core $1000 CPUs from the previous years in every metric, while consuming less power. It was so efficient that you could overclock it using the (free!) stock cooler.

Can you imagine being told that you can get last year’s $50,000 car for $10,000, and that it is more fuel-efficient? Or being given a $250,000 house for a price of $50,000 with free electricity for a year? That was what we got in 2010: A $200 CPU that matched the $1000 CPUs of before, except it was more efficient!

The AM1 platform

In 2014, AMD launched the AM1 platform, with motherboards and CPUs that cost as little as $25 each. These were weak CPUs with built-in GPUs. That meant if you picked up some of the cheapest RAM/PSU/HDD ($15-$20 each), you could squeeze a $100 PC into a free milk crate, and perhaps upgrade to a real case when you had an extra $20 later.

You did not read the above wrong. No, these are verifiable facts:

In those days, $120 was a completely reasonable target for an extremely-low-budget modern PC. Not a PC built from used parts or from old parts or from parts found in a dumpster, but a truly current, this-year’s-parts PC, bought from a proper retailer with a full warranty. For $120.

Those Were the Days

Those three examples come from a time that is simultaneously “long, long ago” and “not really too far back”. They showcase how things were: companies made fantastic best-in-class products, but they also made products with prices that were disruptively low (compared to their performance). Companies made products for rich whales with deep wallets, but also made products that deliberately targeted consumers with limited budgets, enabling everyone to get a slice of the modern hardware pie. If you had $12,000, or $1200, or if you had just $120, you could buy a balanced PC with parts that were released within the last 2 years.

This state of affairs began to change soon after the AM1 launch. In fact, I believe that the AM1 launch almost a decade ago was the last time that major PC component manufacturers deliberately targeted super-low budget consumers.

Non-stop Crisis After Crisis!

Graphics Processors Not Being Used to Process Graphics

The cryptocoin drums of doom began beating around 2013, when we had the first GPU inflation event. It was (then) considered to be the worst thing ever, because inflation hit 50% and lasted about 6 months.

In 2017, we got a true GPU extinction event. In that year, Bitcoin went from roughly $1000 to an unbelievable (back then) $20,000! Wew! What did this mean for the other 99.75% of the population who were not into Bitcoin? Graphics cards were either sold out completely, or overpriced to insanity, being up to 100% higher than MSRP. Cards that were normally $200 were now going for $400.

The best cards for cryptomining could not be purchased, because store inventories would be cleared instantly as soon as they were in-stock. When I say instantly, I mean it quite literally: When these crazes hit, cards would be sold out within seconds of launch. Logical Increments documented that disaster, which lasted about 6 months.

Early 2018 heralded another GPU extinction, which we also documented. It lasted 6 months too, and the inflation was even worse than before, going all the way up to 200%. I personally thought that nothing could possibly be worse than the 2018 GPU tragedy. A $300 card selling for $900? Or $700 cards going for $1200? Just remembering those days brings up vile memories and evil feelings.

It was awful, and we watched it live. We watched it live, repeated three times in a row within a period of 5 years! And what did we see, back then? Across multiple cryptocoin price spikes spread over several different years, GPU inventories were fully cleared by cryptominers who were willing to pay any price for cards.

Joining them were the scalpers, with the aid of scalper bots. Scalper… robots? Yes, scalper bots. Programs that scanned webstores to see if these stores had cards for sale. If any cards were on sale, the scalpers would use the bots to buy up every card possible. Unlike humans, bots did not sleep or get tired, so they were there 24/7, ready to pounce on cards the very instant that those cards became available for sale. These helpful and delightful bots, operated by honest, earnest, forthright, highly-lovable scalpers… ensured that you could not buy a $300 card from a store, but you could buy the exact same card (if you wished) by bidding on an auction versus a cryptominer who was willing to pay $900. It was a “wonderful” situation for “everyone” involved, and normal consumers certainly did not curse the cryptominers and scalpers, or pray and hope for very nasty things to happen to them.

I thought that the worst was over when 2018 was over. But then came… 2020.

The Lengthy Multi-catastrophe

In early 2020, a very large section of the modern world shut itself down, due to a certain… *cough* situation. People went (and stayed) home. We will not get into why, but that is what people did back then. Hundreds of millions of people even started working from home, which meant that having a working home PC was critical to keeping a job. Thus we entered a new era, where it was not normal PC builders fighting cryptominers and scalpers and bots, but the entire hundred-million-strong work-from-home workforce potentially competing with each other for PC hardware.

To be clear, this is not criticism that is targeted at work-from-homers: They were not the ones responsible for the *cough* situation. No, they are not at fault for the condition we all found ourselves in in 2020… but we did have a major situation. If you were working from home, and if any part of your home PC broke in 2020, you would want to buy a replacement immediately, and you were willing to pay any price. Thus the cause was different this time, but the result was the same: inventories were bought up, regardless of how high the prices were.

A secondary effect of the global *cough* situation was that travel and transport was severely affected. People went home, and countries closed their borders. With tonnes of heavy restrictions in place, manufacturing began to suffer, and goods stayed where they were instead of being transported to customers. Goods… including PC parts, of course! Inventories were cleared by buyers, but inventories could not be restocked, as there was no way to transport them from the factories where they were manufactured, since these factories were not operating at full capacity and were often somewhere very far away. Shipping, even when not stopped by infamous incidents, proved to be a major weak point for the modern world.

When it rains, it pours. There was a *cough* situation, and there were shipping problems… but why have only two issues when you can have three? At the end of 2020 and going into 2021, we hit the triple-whammy point with another cryptocoin craze. It was almost too much!

2020’s concurrent-triple-disaster situation brought something never seen before: the total disappearance of entire PC part categories. Full categories of PC parts such as “all CPUs” or “all PSUs” were completely out-of-stock everywhere for stretches of time, and could not be purchased no matter how much money you had. The other stuff that was in-stock was overpriced to the extreme, with 200%-300% markups becoming normal. This was the worst inflation, and it lasted (by far) the longest. Of course we documented it, from April of 2020 all the way to April of 2022! A full two years of agony and misery.

Power Overwhelming! Power… Unnecessary?

So, we have seen how prices have gone up and up due to external factors, such as cryptocrazes and *cough* situations, but that was only half the story. There is another, equally disturbing half, except this comes from within the industry itself.

Historically…

After AMD launched the high-end and expensive 5870 in September 2009, it launched the mid-tier and affordable 5770 a month later, in October. Similarly, nVidia’s wallet-buster GTX 580 launch in November 2010 was a major success, and nVidia followed it with a January launch of the reasonably-priced 560 Ti. In both cases, it was clear that there was a real focus on making an alternative purchase available for buyers with mid-tier budgets. The mid-tier cards were excellent value, packing much more performance than the price suggested. Because they had nearly all the modern features of the high-end cards, you could enjoy all the latest tech and could play all the latest games, albeit at lower settings.

To drive the point home: just a couple of months after the mid-tier 5770, AMD launched the 5670 for low-budget customers. nVidia did the same with the 550 Ti. Thus, within an extremely short time of the halo product launch, you had mid-tier and low-budget alternatives. And by low-budget, I mean $80… for a brand new card with all the latest technology!

This strategy of giving proper focus to all segments of the market made customers very happy. In fact, the mid-tier examples shown above (the 5770 and 560 Ti) went on to become the best-selling cards from their generations.

An Unwanted Adjustment

This strategy began to change, and at the time of writing, has disappeared completely. Unlike the cryptocoin insanity, I cannot pinpoint an exact date for this, as it was a gradual change.

But by the years 2019-2020, it was unambiguous and undeniable that big players in the industry no longer cared much about the little guy. Want some examples?

In 2019, nVidia launched the RTX 20XX series, which included the 2080 ($1000) and 2070 ($600) and 2060 ($300)… and stopped there. There were high-end and mid-tier cards, but a low-budget customer could not buy a card with all the modern features. In the same year, AMD launched the Radeon VII “series”, which included the Radeon VII ($700)… and that was it. A single high-end card, and no mid-tier cards at all. The RTX 30XX series, launched in 2020, did not get its 3060 card till 2021. The 3050 was launched… in 2022. AMD’s RX 6X00 series was exactly the same: Launching in 2020 with the big and powerful $1000 cards, and keeping the $200 cards till 2022.

Launch after launch, it began to feel like products were becoming halo mega-performance products, instead of utility items. More shiny, more RGB, more flash, more features… and (always!) disproportionately higher price. Mid-tier customers can wait a year. Budget customers? Two years… or never. After all, why not? From the viewpoint of these companies that practically controlled the market as a duopoly, what choice did you, the customer, have? Either you were rich, or you were waiting.

Another awful change was the creation of a new category of performance. Before, we had the low-budget, the mid-tier, and the high-end. The new category was higher than high-end, and I am unsure of what to call it. The Superheroic Ultrapower Megalomania tier? Forgive me for this unprofessional name, in the same way that we forgave nVidia for calling its card “The Titan Black“. We also forgave AMD for its “Radeon RX 7900 XTX” cringefest. And we are not going to let Intel get away with its “Core i9-13900KS” either, which is closer to the secret launch code of a nuclear missile than it is to the name of a product. So, I am sticking with this new category: Superheroic Ultrapower. We will drop the Megalomania, due to space constraints, but it is still implied.

New Kid on the Block

What kind of products do Superheroic Ultrapower users need? Clearly, they need $2000 cards and $4000 CPUs. When was the last time you felt the need for 24GB of VRAM? Do you recall, in the recent past, an incident where you (or a friend?) talked about how a 32-thread CPU was not really enough for modern users? No? Yet all modern launches begin with products aimed at the Superheroic Ultrapower tier. These products are powerful. Very powerful. In fact… too powerful. There is, in fact, such a thing as “overpowered”.

Here is what reviewers had to say:

• • • • “…so powerful that the rest of your PC might not be able to keep up” – Gamesradar
      • “(a pretty fast gaming CPU) was limiting performance on multiple occasions”, “I can enjoy gaming just as much with a GPU that costs 2x or 4x less.” – Techspot
      • “You may not need this much graphics-rendering overkill” – Arstechnica
      • “…testing is done at 4K resolution, and that’s the only resolution that really makes sense” – Techpowerup
      • “…if you’re using a 1080p monitor… the RTX 4090 will almost certainly be overkill” – Tom’s Hardware

It has become standard to find a disclaimer or warning in every review of major launches: “This product is extremely powerful and extremely overpriced. Only buy this if you can afford it, and have superheroic ultrapower needs.” The wording differs, but the message is the same. That encapsulates the issue of a product being “overpowered”: if you are buying a powerful and pricey product, and it sits idle and unused, then you have wasted its power and your money.

To put things in perspective for those wondering what is wrong with extremely overpowered products: most of us are not Eddie Hall, the world’s strongest man, and a multi-millionaire. Most of us do not really need to buy a (real) military tank to go to McDonald’s. That is why most car manufacturers make budget cars, mid-tier cars, luxury cars… and stop there. Imagine a world where car manufacturers stopped making budget and mid-tier cars, and started making only luxury cars and tanks. That would mean one of two things: either the whole world has become Eddie Hall-like in strength and wealth, or that all car manufacturers have gone completely bonkers.

We do not need to apply this analogy to PC part manufacturers, because it is already a reality. Before, we had three tiers (high, mid, low) of performance, and products in all three would launch within a month or two of each other. There was a modern option available for all budgets. Now? There are only two tiers. There are Superheroic Ultrapower products for the ultra-wealthy with megalomania, and there are also high-end products for the rich, and mostly nothing else. If you have a mid-tier or low-tier budget, you can wait two years, or maybe buy a used product from eBay, or a heavily discounted way-too-old item that has none of the new tech that was released in the past couple generations.

Welcome to 2023. It sucks.

A Caveat

A word of caution, to clarify: all the above applies to normal consumers of PC parts. Technically, businesses are also consumers who buy PC parts, and so are professionals whose work relies on access to massive computing power. But they are not “normal” consumers. The enterprise sector buys computers as a business expense, and does not care about the price as much as the barista earning slightly above minimum wage.

When a business reaches a point where it is reconsidering if it still wants that S in its SME title, it may want to buy that server with the ultra-expensive new Xeons or Epycs. It is quite possible that the purchase of such extreme computing power could be justified for them, despite the price.

The same cannot be said about Joe who wants to play a bit of DotA and Elden Ring, and checks modern graphics cards to find that a “mid-tier” GPU now costs more than a PlayStation 5.

Learning the Wrong Lessons

From 2013 to 2023, we endured a decade of catastrophes and changing industry focus. Surely, seeing the suffering of everyone involved, the major players in the industry have learned some lessons… no? Let us ask a few questions.

• • • Did manufacturing capability increase to be able to meet demand spikes? No.
    • Do products have protection from being used for cryptomining? No.
    • Do products have protection from being bought by bots? No.
    • Do products have protection from being bought en-masse? Mostly no.

That is a lot of no-no’s. If a new plague or a new cryptocraze were to hit tomorrow, we would be back to the same place we have visited four or five times in the last decade. The industry has learned nothing useful from the calamities that we endured, but we cannot say that they learned nothing “at all”. Ah, here comes the twist of the knife. Not only did manufacturers learn nothing useful, and not only are we as consumers completely unprotected if a new *cough* situation were to emerge, but we are in fact much worse off than we were before. Here is what manufacturers have learned:

• • • Can the modern world do without computers? No.
    • Can consumers and companies refuse to buy PC parts? No.
    • If the options are “high price” and “ultra high price”, do consumers have other options? No.

Manufacturers have learned that consumers can be forced to pay high prices, if everything available is either priced high, or priced extremely high. And thus everything has become overpriced. Sure, we could accept earlier excuses such as “shortage due to cryptominers” and “shortage due to supply chain disruption”, but it has been a decade, and the industry has not changed for the better. So let us ask even more questions:

• • • Do manufacturers make modern products that target mid-tier builds? No.
    • Are there products that target consumers with low budgets? Definitely no.

As we approach the middle of 2023, all modern product launches are overpowered and overpriced items that appeal only to the rich and to those with superheroic ultrapower needs. There are only a few two-year-old or even four-year-old leftovers for Joe Everyman, and even less for Jack McBudget.

A Gloomy Future

I do not know where things are headed, not with absolute certainty. Things may change for the better, but… will they? We can look around and ask what steps are being taken to fix the current situation, but the answer will be silence.

What are we expecting to happen, in the future, if PC manufacturers continue making only high-end and superheroic ultrapower products for a long time? There are far more people with mid/low PC budgets than there are people with high PC budgets, and mid-to-low budget people are going to give up on building their own PCs if they are not given good choices. Some will buy a prebuilt PC. Some will get a laptop. A few will even do the unthinkable: they will give up on common sense and logic altogether, and join the Legion of Console Peasants. Humans adapt to the situation they find themselves in, and people can get used to a lower quality of life. As such, if people use a console for long enough, they may get used to it and not come back to PC building, even if manufacturers wake up from their stupor and start selling reasonable-quality, reasonable-price, new mid-tier/low-end stuff again. The customer base may have irreversibly shrunk by then, spelling the downfall of quite a few PC part manufacturers.

Now, no one can foretell the future, but we can draw a line from where we were before, to where we are now, and where we are likely headed. We used to have many options for all budgets; now we have few. We used to have many options for all tiers of performance; now we have few. We used to be happy with our selection of choices; now we are reading this article.

Hopefully Not Eternal Midnight

Thank you, friendly reader, for staying with me until the end. This walk down memory lane was painful, but now you can see how PC building has changed over the past 20 years…

Will these companies change course before it’s too late? Only time will tell. I have taken the time to research and write this, in order to document the events that led us here. I hope that this is a wake-up call to the industry before the situation becomes unbearable for everyone.

I hope this helps,

The Falcon