EVGA’s Decision to Exit the GPU Business is Likely Its Own Fault

Last week, EVGA startled the gaming and enthusiast communities by announcing its complete withdrawal from the graphics card market due to disagreements with its “tyrannical” partner, Nvidia. 

Product Manager Jacob Freeman confirmed the news | Image: EVGA

Igor’s Lab released their opinions on EVGA’s decision today, claiming that the majority of the company’s issues were self-inflicted.

Igor claims that in comparison to Nvidia’s other AIB partners, EVGA acts extremely differently as an add-in-noard (AIB) maker. The only aspect of the manufacturing process that EVGA handles directly is engineering; all circuit boards and cooling are produced by outside vendors.

As a result, EVGA’s GPU margins are remarkably low for an AIB partner because a significant portion of its resources must be returned to the third parties in charge of producing the actual graphics cards.

Igor enquired about margins from a number of rivals and discovered that worst-case situations, which include EVGA’s strategy, account for around 5% of margin earnings.

Even worse, EVGA is shipping significantly less GPUs overall than its other AIB partners, operating at a volumetric loss. This is likely due to the fact that EVGA primarily targets the American markets, in contrast to AIB competitors who produce and distribute GPUs globally.

Image: JPR

We have no reason to doubt that EVGA’s stated justifications for leaving Nvidia including the fact that Nvidia withholds MSRP data until GPUs are publicly introduced is accurate. 

EVGA also claims that Nvidia forced AIB partners to set GPU prices to specific categories on specific models. The fact that EVGA has one of the lowest profit margins in comparison to the other Nvidia AIB partners is interesting to note, though.

It’s obvious that we don’t fully understand the circumstances. We may never know much more than we do right now since Nvidia and its partners don’t seem to want to or are unable to speak candidly and on the record about sales, profitability, and other statistics.

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