Status Quo is No Mo
This editorial is going to jump around several subjects, but all are related in scope. Primarily I am going to discuss MSRP pricing, and the direction of the consumer hardware reviews industry overall. I have spent over 20 years in this field and have been carefully watching changes over the last four or five years but have never truly shared my thoughts on all of this.
GPU MSRP Will Go Away
This has been a very hot topic lately and a good one to start with since it is firmly at the front of many enthusiast minds and interestingly one that I started discussing a year ago privately. We have seen NVIDIA recently officially launch two video cards with no MSRP listed. You can read my previous “GPU MSRP is Not Meaningless” editorial to understand more about what the number has meant to consumers in the past and BOM cost associated with it and reading that might be needed to fully understand the context of my thoughts written here. Obviously MSRP means literally nothing to consumer pricing now, even though hardware reviewers are getting extremely riled up over this number missing from recent GeForce RTX 3080 12GB launch specifically.
I fully believe we will see more GPU launches, if not all future GPU launches over time from both AMD and NVIDIA not state an MSRP price, or “SEP” price as AMD refers to it. I am going to leave Intel out of this conversation for now as I am not sure Intel will follow the same path with its marketing, but I do believe it likely will at some time, if not right out of the gate. AMD and NVIDIA listing an MSRP price on GPU video card models for the past two years has done nothing but bring more and more bad press to each company’s doorstep as we have seen those MSRPs wind up meaningless to the consumer. AMD and NVIDIA do not like bad press, so why give a thousand talking heads a repeated target to fire at again, and again, and again? I suggest that hardware reviewers holding AMD and NVIDIA “responsible” for consumer pricing repeatedly will have to shoulder some of the burden of video card MSRP going away. Yes, there will be more disgruntled editorials and reviews that complain about no MSRP, but truly if AMD and NVIDIA are going to make this rather large marketing change, the current market factors make this very attractive to both. Every reviewer that thinks his or her whining about this change is going to have any impact on this action occurring is wrong, as every GPU that will be produced, will be sold in the current climate. If AMD and NVIDIA are going to have to weather “bad press” for no longer stating MSRPs, this is exactly the time in the market for it to happen. When, or rather if, we see the video card market start to return to something we might even think of as “normal” again, which it will not, AMD and NVIDIA will get the no-MSRP story into the review mirror, and the status quo will have changed likely forever.
It is also of great value to AMD and NVIDIA to have no MSRPs stated. This allows both companies to have much more flexibility when it comes to dynamic BOM costs. AIBs and retailers have been making huge profit margins compared to previous product cycles, and quite simply neither the AIB nor the retailer shoulder most of the risks associated with video card sales as explained in my previous editorial.
Another variable that gets removed from the "review cycle" is that hardware reviewers will no longer be able to compare past cards with a true “price point to price point” focus. This removes a critical part of most reviewers' processes when it comes to comparison data points. I would venture to say this could lean pro or con for AMD and NVIDIA, but it puts the onus back onto the reviewer to make the "correct" evaluation comparisons, and quite frankly, few reviewers will have the ability to pull this off and not upset much of their audience as this will be difficult to get consensus among their varying traffic demographics. Assuredly, no MSRP removes an easy target from AMD’s and NVIDIA’s back over time as it no longer allows reviewers to harp on about price comparisons to a card that was sold six years ago. Pricing concerns will be dropped at the feet of the AIBs and retailers. This will further disrupt the status quo among the current hardware review landscape which I will discuss more below.
No MSRP will also help AMD and NVIDIA greatly when it comes to how its products stacks have become very compacted recently. Currently, NVIDIA’s product stack has a myriad of Ampere GPU based video cards that are very close in scaling when it comes to performance and hardware specification. I think we will see the same become true later this year with AMD. No stated MSRP allows AMD and NVIDIA to launch more specifications into the market without having the burden of stated MSRP disrupting its video card stratification marketing. Both companies can keep releasing more video card specifications and allowing the market to dictate what those cards sell for to the consumer. No more MSRP pricing slings and arrows for hardware reviewers to fling and complain about constantly. AMD and NVIDIA can push its marketing messages of more products for more consumers to choose from, even though we are still currently experiencing what can only be described as a “sellers’ market,” but it still allows marketing placement strategy and messaging with much more focus from AMD and NVIDIA after disconnecting MSRP from its GPU products. The two companies are ultimately not in control of consumer pricing, so why bear the burden of MSRP? Also keep in mind the marketing, branding, and product exposure opportunities that are associated with new GPU launces is far reaching.
This will relieve pressure on both AMD and NVIDIA from stating these prices and then getting their feet held to the fire by reviewers when cards do not show in retail at those prices. I am sure both AMD and NVIDIA have marketing managers sitting around watching reviewer after reviewer slamming its company for “fake MSRP” and are now thinking about a solution to that. The simple and elegant solution is to do away with MSRP, and while reviewers will gripe about that as well, those complaints will soon be nothing more than old news sent to the archives of old reviews.
Computer Hardware Reviewers Becoming Old News
There are going to be some things said here that are very likely to upset a lot of people I know and respect, so my apologies in advance. I sincerely hope you get to throw this editorial in my face in a few years and show me just how wrong my predictions were.
Much as print magazines have become a thing of the past, so will long-form written hardware reviews and in-depth YouTube hardware reviews to a large extent. Yes, there are a few “print” magazines still around, and we will see some holdovers in the hardware reviewer web space as well. Long-form written review sites are already feeling the burden of their business models becoming irrelevant. HardOCP’s business model was changing rapidly with up and coming “TechTubers” taking much of that audience and is one of the reasons that I walked away from it three years ago. I truly did not want to even try to transition HardOCP into a YouTube “thing” although I found YouTube to be a good supplemental format for adding to written reviews. Arguably, a lot of TechTubers will likely be on the way out of that genre as well as I see the business model changing much like it did with written reviews. Surely there will be a couple of “big guys” left in the space, but the Wild West days of TechTubers is close to over. The money gravy train associated with that bubble is popping as we speak, albeit a bit more slowly than I first thought. That business model is slowly being replaced by the Influencer. Sponsorship monies and company PR support is moving away from “hardware reviewers” and rightly so from a company ROI perspective.
To fully understand why a company would support a traditional hardware reviewer with early access video card samples, specifications, driver support, and a general point of communication, we must ask ourselves a couple of questions, “Why should AMD and NVIDIA continue to spend millions of dollars doing this?” and “What is the ROI in terms of sales and overall “good press” that is obtained by those actions?” It has been done that way for the last couple of decades because those hardware reviewers very much impacted purchasing decisions of the consumer. Why did companies support HardOCP at such great expense? We gave their brands and products exposure and greatly impacted purchasing decisions. Sadly, hardware reviewers no longer truly have a huge role in this, at least currently, and I do think that the status quo around hardware reviewers is about to greatly change.
I think it is very possible that we are about to see “day one” computer hardware reviews go the way of the dodo. AMD and NVIDIA are aware that hardware reviewers are no longer impacting consumer buying decisions in a huge way, so there will be no reason to support those reviewers with company resources. I think most hardware reviewers will be relegated to purchasing video card hardware to be reviewed on their own dollar, product that has already been publicly released, if they want to review a specific video card. If you think some sites are “too big to fail” in this environment I would argue that notion is incorrect. Sites that are constant sources of being overly critical of products can rest assured those companies no longer allow reviewers to bite the hands that feeds it. Yes, they can still “bite,” it will just not be at the actual expense of the company producing the hardware. I started a site called “HardConsumer” (please disregard the Flash download prompt) 15 years ago that reviewed pre-built and ODM computers in-depth. I am seeing that business model now being reproduced by several hardware review sites currently. It was extremely expensive content to produce, and the fact is that we were told over and over that we were “too critical” by advertisers, and I was never able to move that specific model forward successfully in terms of real ROI. The ODMs of pre-built computers did not need us to get exposure in a world at the time where softball journalism was common in the industry. I think we are about to see the same reality be reflected again in our current video card market.
Another disruption that I am seeing pushing these changes to fruition is the fact that the demographic that is purchasing these products has overall changed as well. I have watched this slide for the past 20+ years. Consumers overall no longer want to be educated on a product; they just want to be told what to buy and fall back on brand loyalty. I have used the following analogy for quite a long time, but I think it is even more fitting today than ever. Did you ever care what chip was used inside your VCR? I would suggest 99% of consumers never did. You just wanted to be told which one would serve your needs and to many it was important that it was a familiar or respected brand. Obviously, under-supply in the video card market is pushing more and more buying decisions to just buying whatever you can get into and through your shopping cart. I do think however that more and more people are not concerned with the inner workings of high-tech components and just want to buy something that suits their needs from a known brand that falls inside their budget. This market is evolving but I think the handwriting is on the wall especially regarding generations following Gen X. I do think that Millennials and Gen Z’ers are influenced to spend their money in different ways.
So where will these marketing budgets shift to? Those will be going to “influencers” as touched on above. We are seeing more and more channels on Twitch, YouTube, TikTok, Snapchat, and the likes, that are getting extreme amounts of eyes to those. This is not some big secret, but we have yet to see the computer hardware companies fully embrace this outlet, however, there are those have surely been dabbling in it. Intel has spent hundreds of millions of dollars in this sector already, primarily in e-sports, but that has been for more of a shotgun approach at marketing, which Intel is very good at. Intel has excelled at branding and AMD and NVIDIA need to do the same, as well as its AIBs. I could argue that many of the AIBs in the video card business are already acutely aware of this, while others are not, or simply do not have the resources to push into wide branding campaigns. What I do think will happen is that we will see the likes of AMD, NVIDIA, and much more at an AIB level, take their marketing budgets and other resources and push hard into the “influencer” landscape, leaving behind the “hardware reviewer” to fend for itself. Have you noticed how more hardware reviewers are constantly and continuously pushing merch in its content? This is very telling that the underlying revenue generation from traditional content is currently failing.
If you have a “bad” product launch with an influencer, it is “one and done” for the most part. The influencer is then moving onto talking about the next shiny item that he or she is paid to show off for the day. A company does not have to deal with weeks and weeks of constant complaints about an issue. Using an influencer to market your product very much speaks to the changing generational demographic that just wants to know what to buy, not how it works, or what tiny percentage better it is at doing X. Moving resources away from traditional tech reviewers will absolutely push some of those channels and publications to irrelevance and sadly failure. The day one reviews which drive so much of the traffic and revenues will be transitioned to influencers and with that so will hardware sites and channels controlling the narrative around those products at launch. Initial narrative control will be back in the hands of AMD and NVIDIA.
We have seen much of the world’s hardware tech content already move from education, to “edutainment,” and now to simply what some themselves refer to as “entertainment.” Surely there will be outliers, but the landscape around hardware reviews is very much going to change over the next few years and MSRP going away is only the first indicator of those things coming to pass. Video card reviews, which have been the lifeblood of hardware review sites and channels is about to see huge changes. I see that we as enthusiasts will have to accept consolidation in the tech journalist genre, as wide-ranging independent editorial is becoming a thing of the past. This transition will be a reflection of the audience that AMD and NVIDIA want to penetrate primarily for branding purposes. First party and bona fide influencer created content will be number one for PR and marketing departments in the future. Simpler content such as user unboxings, sponsored videos, streams, TikToks, etc., generate huge numbers in terms of market exposure are generally benign when it comes to negative product messaging and churn. This will be a huge win/win/win for AMD and NVIDIA in terms of resources, ROI, positive branding to younger generations, and product exposure.
Don’t take my opinions above as something I am happy about or even want to see happen at all. This is also not a process change that will execute in one fatal blow. This will be slow-burn transition. There are many more discussions to be had about the topics presented here. I did not want to mention any media outlets by name as to I thought that would poison the discussion’s direction. I also wanted to keep this under 2000 words as well (and failed), because let’s face it, hardly anyone is going to read this entire piece anyway.
Feel free to cut and paste this editorial in its entirety with a simple attribution link as with any other post you might read on HardOCP.com.