NVIDIA's RTX Graphics Cards Are Fast and Expensive

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When graphics chip company NVIDIA (NASDAQ: NVDA) announced its latest generation of GPUs last month, the big news was the hardware dedicated to ray tracing. Ray tracing is a rendering technique that can produce realistic images by simulating light rays. Until now, real-time ray tracing was too computationally intensive for consumer-grade hardware.

Beyond the bells and whistles, the other thing that stood out was pricing. NVIDIA pushed up the MSRP on all three of its new graphics cards relative to their predecessors, setting up a test of the company's pricing power. NVIDIA is trying to get gamers to pay up for a new feature, ray tracing, that doesn't yet exist in any available games.

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With third-party reviews of NVIDIA's two new high-end graphics cards, the RTX 2080 and RTX 2080 Ti, now available, it's clear that NVIDIA is taking a risk with pricing. Performance gains in existing games aren't nearly as big as those achieved by NVIDIA's prior generation of graphics cards. For gamers unwilling to pay a premium for the promise of games eventually supporting ray tracing, the RTX series isn't very compelling.

Faster and more expensive

Both the RTX 2080 and RTX 2080 Ti are faster than their predecessors, the GTX 1080 and GTX 1080 Ti. The RTX 2080 Ti is about 32% faster at 4K gaming, and the RTX 2080 is 35% faster. These figures, averaged over multiple games, come from Anandtech, which ran the cards through their paces.

These performance gains come at a cost. The MSRPs of these new cards are well above those of their predecessors.

With the RTX 2080 Ti, NVIDIA is charging more money than the additional performance warrants. The RTX 2080 looks better, although the GTX 1080 is available well below MSRP at the moment. Using market prices, the RTX 2080 costs 45.9% more than its predecessor. NVIDIA's Founders Edition versions of these cards offer a bit more performance, but even higher price tags.

The performance increases are also much smaller this time around. The GTX 1080 was about 71% faster than the GTX 980 it replaced. The GTX 1080 Ti was 74% faster than the GTX 980 Ti. In terms of performance in existing games that don't utilize the new ray tracing features, the RTX 20 series is far less disruptive than that GTX 10 series was when it launched in 2016.

Competing with itself

NVIDIA has no competition at the ultra-high end of the gaming graphics card market. Advanced Micro Devices' offerings top out at the RX Vega 64, which was last or close to last in all of Anandtech's tests. The RTX 20 series' biggest competitor is the GTX 10 series, and those older cards will presumably no longer be available at some point down the road.

Each new generation of graphics cards typically brings an increase in performance-per-dollar. On that front, the RTX 20 series falls short of its predecessor. I don't see these new cards driving the kind of upgrade cycle that the GTX 10 series drove.

Once games that support NVIDIA's ray tracing tech begin to trickle out, it will become clearer whether these new cards are really worth the higher prices. It's still unknown whether yet-to-be announced lower-end cards will even support ray tracing, given that they may not have the computational oomph. Those may turn out to be better buys for gamers looking for an upgrade and unwilling to pay a premium for ray tracing.

NVIDIA remains the only game in town for those looking for the best performance. But pushing prices up while providing lackluster performance gains in existing games makes these cards a tough sell for those considering an upgrade from the GTX 10 series. That could crimp NVIDIA's gaming growth in the coming quarters.

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