The really simple solution to AMD's collapsing gaming GPU market share is lower prices from launch

AMD says it wants more PC gaming graphics market share. As well it might, what with the latest data showing it owns just 12% of the PC graphics card market to Nvidia's monumental 88%.

There's a simple solution to that. Price. Now, this may seem like a retina-popping glimpse of the painfully obvious. But it needs saying, because all the evidence is that AMD doesn't get it.

These days, it feels like you know exactly how an AMD GPU launch is going to play out. A new GPU or family of GPUs is launched at prices that simply aren't appealing enough in terms of the performance and features comparison with Nvidia. Duly, they fail to get any traction.

Cue the usual stories about AMD's latest generation of GPUs making zero impact on the Steam hardware survey. Eventually, AMD drops prices to levels that would have made the cards really pretty interesting at launch. But by then, everyone has lost interest, Nvidia has acquired even more mindshare and the attention has shifted to next-gen GPUs.

The AMD Radeon RX 7900 XT is a perfect case in point. At launch, it was $900. For starters, that was weirdly proximate to AMD's $1,000 RX 7900 XTX flagship. But more importantly, it was just far too much money in a context where Nvidia is perceived to have such a substantial features advantage. Offering slightly better old-school raster performance and a bit more memory for a little less money than Nvidia is not going to cut it.

But imagine if the RX 7900 XT had launched at its current street price of about $680. Now you're talking. It's hard to say for sure that it would have been a smash hit. But it would have got my own scanners pinging, that's for sure. I'd have been sorely tempted by RTX 4080-plus raster performance and a heap more VRAM for a little over RTX 4070 money. 

Of course, there's always the question of profitability. Could AMD have done the RX 7900 XT at $680 and still made money? From the outside, that's hard to say. But what we can be sure about is that the way it's going about it isn't working. After all, AMD's GPU division is now flirting with single-digit market share.

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AMD's GPU division is now flirting with single-digit market share.

So, here's a game plan for AMD. Take it on the chin with RDNA 4, its next-gen GPU architecture. Launch that new Radeon RX 8800 XT with RX 7900 XT levels of raster performance, plus a bit of a ray tracing upgrade, for $400 and absolutely blow everything else away at that price point.

Maybe AMD wouldn't make any money doing that. But so long as it's not a case of massive losses, it would reignite interest in AMD graphics. Meanwhile, move heaven and earth to get RDNA 5 working properly with what I'm expecting to be a true chiplet architecture, and cash in on the new-found appetite for Radeon graphics with a top-to-bottom family of GPUs around two years from now. Price them low, too. Not as low as RDNA 4, but still low enough to have them hammer Nvidia for raster at a given price point and be in touch for ray tracing.

Then build from there with subsequent generations. That isn't going to get AMD to 50% market share in two generations. But I bet it would move the needle, which categorically isn't happening now. AMD has barely managed a dent over the last decade.

There are caveats to all this. Should AMD launch an RX 8800 XT GPU that cheap with RX 7900 XT of performance, I suspect keeping real-world pricing at $400 won't be easy. But that's a good problem to have and AMD can work with board makers to ensure that regular batches of cards are sold at MSRP to those willing to queue a bit, even if the typical pricing is higher.

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Likewise, it will require a fair old up front investment. The returns won't kick in for several years. But that's true however AMD goes about any attempt to win back substantial market share from an utterly dominant Nvidia. And this would be a positive plan, not the usual madness of repeating past failures and hoping things will turn out differently.

Moreover, AMD will definitely need to be very aggressive to offset the huge mindshare Nvidia now possesses. Nvidia's perceived advantage with its DLSS upscaling technologies and ray-tracing performance is so overwhelming, AMD has to do much more than just offer a slight raster performance edge for a tiny bit less money. Something more radical is clearly required.

Will AMD do it? For sure, it's an implausible scenario. But it's not an impossible one. Heck, maybe if AMD fans spread the word about a bit more the company might take notice. That kind of thing—companies responding to clear customer sentiment—has happened before. Maybe, just maybe, it will happen again.