AMD graphics card pricing skyrockets due to cryptocurrency mining, could kill AMD’s gaming efforts

Cryptocurrency-fueled demand has driven the price of AMD Radeon cards through the roof in recent weeks, and consumers are feeling the pinch. This is a trend weve remarked on several times in the past, but rocketing prices have hit new heights in recent days, with the price of the R9 290X briefly breaking $900 over the weekend. Considering the card carries an official $550 MSRP, thats a massive 64% over premium.

Prices seem to have come down slightly since yesterdays exuberance; the R9 290X is currently selling for a mere $800 at Amazon, while Newegg has a handful of cards in stock for $700.The R9 290 is selling for $600 a mere 1.5x markup on its $400 MSRP. (Oops: When I started writing this story, Newegg had a handful of cards in stock for $700. Now, it doesnt.)

The insanity, however, isnt confined to the highest-end cards. Heres a comparison of the official AMD MSRPs and the current selling prices.

Price %s over MSRP

Even the R9 270 cards are selling for 30-40% over MSRP, while the R9 280X a GPU thats supposed to cost $300 is actually selling for $489. We can zoom in on one particular card thanks to website price-tracker CamelEgg, and see the greater problem.

Save for a brief period in late November and immediately after Christmas, the gap between official selling price and street price on the R9 290 has been enormous. It also corresponds exactly with the rise of alternative cryptocurrency mining(Litecoin, Dogecoin, et al.) as Bitcoin became too difficult to work with.

This might sound like a great deal for AMD. Huge demand for video cards lifts prices, prices drive profits. Everybody wins, right?

Maybe. Unfortunately its not that simple. AMD hasnt changed its MSRPs, which means much of this price gouging is likely dropping into the pockets of Newegg and Amazon resellers, not Sunnyvale itself. Just because AMD hasnt changed its MSRPs, of course, doesnt mean it isnt quietly charging higher wholesale prices, but its ability to claim some of the bubbles earnings for itself is likely limited by previously agreed-upon contract prices as well as the volatile nature of the market. Add-in board partners (AIBs) wont pay huge premiums for chips when they know the market for those processors depends on something as volatile as the cryptocurrency markets.

Beyond making life fun for reviewers, who have to take practical cost considerations into account when evaluating different GPUs, theres another problem here. AMDs entire GPU strategy since October of 2013 has relied on steep price cuts to fuel sales. The Radeon R9 290 and R9 290X were killer cards partly because they equaled or bettered Nvidias GTX 780 or GTX Titan, but at far lower price points.

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AMD graphics card pricing skyrockets due to cryptocurrency mining, could kill AMD’s gaming efforts