Radeon 6970 pricing not what it seems

AMD says one thing, retailers say another. So who's pricing is correct, and when will reality match RRP?

So yesterday was the official launch of AMD's new 6970 and 6950 Radeon video cards. So far, our testing is showing this to be a spiffy little addition to the Radeon family, and at AMD's RRP of $419 locally, a damn good price/performance choice.

But, for now at least, no one's actually selling the card at AMD's recommended retail. The card's been seen listed for everything from $499 to over $600... So is this a giant ripoff, or is AMD telling porkies?

Well... to be honest it's rather more complicated.

From the horse's mouth
AMD's adamant that their pricing is not only correct, but will be seen at retail before too long. Our question, though, is how this initial price confusion has even come about?

So we asked our man at AMD, the Technical Manager for the ANZ region, Garrath Johnson. "There have been some adjustments in price over the last few days," he told us, "which may have taken some time to filter down but you should see prices settle quickly." There are apparently plenty of cards on the market, according to AMD, so it's certainly not a case of rarity of product driving up prices.

"To me it looks like a couple of companies have decided to risk selling before the embargo time and are charging a substantial premium," he commented. So does he expect those prices to drop?

"I have heard of prices that are sub $500 now," Garrath responded. "Given it has only been half a day since the launch I don't think it will be too long before we see prices approaching the RRP." Of course, what does that mean to the consumer, and what does this ‘price movement' mean for those retailers who have already purchased stock? Even we expected the card to cost much more, based on initial reports from AMD.

"I believe that is being handled via a rebate to the distributors," Garrath told us. "I guess it is up to them how they pass it on."

What the retailers say
When we announced the pricing yesterday, we were contacted by one of the folks at AusPCMarket. They're currently selling 6970s from GIGABYTE, HIS and Sapphire for $572-599 - that's a minimum $150 over the stated RRP.

But Michael Vorstermans, from AusPC, was quick to point out that they're not exactly operating on a huge margin here - the wholesale price they're purchasing cards at is itself above AMD's RRP, and that's before GST or any notion of profit is factored in. Their price, we've discovered, is around $470, ex GST.

"I'd love to talk to your guys at AMD," he told us, "because the pricing they're claiming is not being reflected at any level of the purchasing process." And, if we had to guess, those rebates Garrath mentioned are likely to only be spottily passed on at best, or at the very least only slowly and as retailers request them - quite possibly after reading this article!

All of which leaves consumers in an interesting position. There are few other industries where pricing is so complex, and if you want to be the first on your block with the latest tech, it does look as though that's going to cost you. Even if a card's price does drop - and as we've been typing this we've been seeing lower prices on sites like PC Case Gear - it doesn't help anyone who's bought the card on release date.

So who's to blame?
Well, that's a bloody good question.

It would seem easy to look at AMD's price changes as the root of the issue, but that doesn't take into account the fact that the chain that sees the card go from manufacturer to your gaming rig is a complex one.

Similarly, we certainly don't think the retailers are at fault. In our chats with Garrath the matter of broken retail embargoes, and subsequently inflated prices, did come up, but that doesn't seem the culprit either. Regardless of when they're selling the card, retailers like AusPCMarket are only working with the wholesale prices they've been given.

Which leaves a finger to be pointed at the distributors, but that's a famously nebulous space. The scale these companies tend to operate at is rather large, and being able to nimbly keep up with last minute price changes is a tall order.

Even more challenging is where it leaves us, the reviewer - at an RRP of $420, the 6970 is a damn fine card, but at the prices it's being reported at by some retailers, it's a far less attractive option. As we speak the card's being reviewed, so what kind of scoring can we give it for Value, or Overall quality? And how valid will that score be by the time of print?

I guess we'll have to wait and see just how far the prices fall, and for now that's our best advice to you, too. It's kind of unfair on retailers caught up in these pricing shenanigans, and given this is a good product from AMD we don't like effectively saying don't buy it yet. But at the same time, we don't want to see our readers pay more than they have to for their tech.

Unless you really need that shiny new stuff, that is.