GeForce GPUs account for 80% of EVGA’s revenue, but EVGA will continue to sell current-generation GeForce cards until supplies run out.
For the past two decades, graphics card manufacturer eVGA has made a name for itself by manufacturing and selling NVidia’s GeForce GPUs, including some of the more reasonably priced options on the market. But YouTubers Gamers Nexus, analyst Jon Peddie, and a post on the EVGA forum say that the company’s relationship with Nvidia is over and that it will no longer make cards based on the company’s RTX 4000-series GPUs.
Since its inception in 1999, EVGA’s graphics cards have exclusively used NVidia GPUs, and according to Gamers Nexus, GeForce sales account for 80% of EVGA’s revenue, making this a significant and potentially disastrous change. However, EVGA CEO Andrew Han told Gamers Nexus that the decision was based on “principle” rather than financials—Han complained about Nvidia’s lack of communication about new products, including pricing and availability.
NVIDA’s pricing strategy was reportedly another source of contention for EVGA. The prices of EVGA and other vendors’ cards were often undercut by Nvidia’s first-party Founders Edition cards, which forced them to lower their prices or lose sales.
Nvidia may not be entirely to blame; the broader dynamics of the GPU market are also difficult to navigate. As Peddie points out, even as GPU costs have risen, profit margins for Nvidia’s board partners that manufacture graphics cards have decreased. Modern high-end graphics cards need a lot more power, cooling, and PCI Express signaling than cards from just a few years ago. This makes them more expensive to design and make, and reports about the RTX 4000 series suggest that this trend will only continue.
And it doesn’t help that the GPU market has been crashing back to earth this year, after a year of scarcity and inflated pricing. Sliding cryptocurrency values, as well as the Ethereum cryptocurrency’s shift away from GPU mining, have both flooded the market with used GPUs, reducing demand for new GPUs. In Nvidia’s most recent earnings call, CEO Jensen Huang complained about “excess inventory” of RTX 3000-series GPUs, which caused the company to miss its quarterly revenue projections by $1.4 billion.
Nvidia’s public stance can be summarized as “so long and good luck.”
Nvidia spokesperson Bryan Del Rizzo told Tom’s Hardware, “We’ve had a great partnership with EVGA over the years and will continue to support them on our current generation of products.” “We wish Andrew [Han] and our EVGA colleagues the best.”
The breakup of the EVGA-Nvidia partnership could be detrimental to Nvidia—
According to Peddie, EVGA accounts for roughly 40% of Nvidia’s GPU market share in North America—but the company is unlikely to be concerned in the medium term. Nvidia collaborates with other companies, and despite differences in cooler design and clock speeds, GPUs in the same series tend to perform similarly regardless of which of Nvidia’s partners made them. In other words, an RTX 3070 is an RTX 3070, and if EVGA’s products aren’t available, people will simply buy one from another company.
EVGA will continue to sell its other products, such as power supplies, but Han told Gamers Nexus that the company has no plans to return to the GPU market, not with AMD or Intel GPUs, and not with future GeForce product generations. Han also stated that EVGA will continue to sell cards based on older GeForce GPUs, including the RTX 3000 series, until supplies run out near the end of 2022. The company will keep enough of these cards in stock to cover warranty repairs or replacements for cards that are already supported.