none of it is malicious. its just the market stabalization problem
a) let's keep consumer grade stuff stable in price
b) let's charge miners 3x, because they willing to pay 3x, and destroy the scalping market which is VERY anti everything. Scalpers hurt literally everyone.
c) let's not de-stabalize nvidia's income again when eth drops in value. They don't want to be beholden to a coin's gamble either. Basically as it stands Nvidia is far invested into eth's value and if it drops their sales drop sharply because of a massive influx of cheap supply.
Except that miners will simply workaround the downgrade software (as they did in the past) and regular consumers will be the only ones with crippled hardware
Nvidia is implementing a hardware fuse system (a-la the Nintendo Switch) to prevent firmware manipulation. I can't speak to how secure these new cards will be, but the Tegra was an absolute pain in the ass to work with. It took a year before people even figured out how the firmware was loaded, much less how to interoperate between custom and official ones without blowing a fuse. To this day, approaching half a decade since the Switch's launch, you cannot coldboot the Switch into custom firmware.
Considering Nvidia's history with hardware DRM, I think there's reason to be scared. Plus, they've undoubtedly paid attention to the community as the Switch was exploited, and probably intend to further secure the firmware interface with what they've learned.
I think the big difference here is there is no money behind hacking the Switch, it's an interesting problem to a small(ish) subset of people. There's tons of folks that would make actual hard cash off those hacks which will make them much more invested in finding out how to work around the solution.
Eeeeeh, I give a lot less credence to that then I did when I was in college - back then it seemed like everyone was pirating everything (because, facts) but now a days a major consumer for video games is the millennials that have passed the cash vs. free time tipping point of piracy being attractive.
Also, reasonably priced services now exist - I used pandora when I was in college and enjoyed it even with how hamstrung and limited it was - now I use spotify and like... why even bother pirating music now?
Sure occasionally pirating a big title from Ubisoft out of spite alone is pretty attractive but I mostly just nab things off Steam and leave it at that.
Nintendo's anti-piracy efforts are so incredibly misguided - the hardware is the majority cost expenditure for most users and you've already collected that cost so why not try and make your platform not annoying. Allow people to mod games and run indy titles if they so desire. Most of this anti-piracy stuff is just lowering the value to the end consumer anyways.
I'm not really sure what you're arguing here. If you're trying to claim that piracy has no value proposition, then you're missing a market of people who maintain these torrents/sites with the hopes of archiving them for the future.
> Nintendo's anti-piracy efforts are so incredibly misguided - the hardware is the majority cost expenditure for most users and you've already collected that cost so why not try and make your platform not annoying.
Because they don't make money on the Switch. In fact, in the first few months of selling it, they were losing about $30 on every unit sold because of how expensive shipping was. Even today, the Switch runs a pretty thin profit margin, if any. Same goes for the PS5 and Xbox Series X, which gives you a pretty good idea of why these companies are so keen to keep an iron grip on software distribution.
>Nintendo's anti-piracy efforts are so incredibly misguided - the hardware is the majority cost expenditure for most users and you've already collected that cost so
why not try and make your platform not annoying.
because the console makers make little (or more often lose) profit from each system, so the draw is to make up or it by selling software. first party software or 3rd party software they get 30% of sales from.
>Allow people to mod games and run indy titles if they so desire
Tell that to the poor PSP. The reality is that 1% use it to run emulators or make homebrew and 99% use it to run free games. To the ordinary consumers, these aren't general purpose computers to tinker around with, they are toys to entertain themselves with. They have computers and phones for the former.
It's certainly not for lack of trying. Fail0verflow, one of the largest and most successful CTF teams in the world, spent nearly 2 years trying to reverse engineer the bootloader, and ended up never finding any real security exploits in the process. There were warmboot attacks (see Fusee-Gelee) that involved code injection, but even then the machine would still recognize it was running in debug mode, and block the user from access to certain functions. Besides being a great anecdote here, the history of Switch hacking is really interesting, and well worth looking into if you have the time.
The switch contains a lot of hardware fuses, with an instruction to blow one.
IIRC it's used (among other things) to set a minimum firmware revision - after upgrading to a new (signed) firmware it blows a fuse so you can no longer run an older signed firmware, which stops you rolling back to when a vulnerability still existed.
Not exactly, but it can be used to prevent you from running custom firmwares or reversing an update. On the Switch, each update would burn a physical fuse on the board, giving the OS a reliable way to determine what the latest update that Switch received was. Prior firmwares cannot be booted on a device with too many fuses burned, which is why the "1.0.0 Nintendo Switch" is going to become an increasingly hot commodity in the coming years.
I still think it's pretty likely we'll see a work around, but if that work around is a custom made firmware patch (like it was for the driver update they deployed IIRC) then that will probably mean the chips you purchased have a less rosy long term cost as future driver updates won't be applicable to your altered firmware. If it requires any physical tinkering with the chip then it definitely increases the effective cost by forcing a labour/card cost and opening up the possibility of expected chip defect as you break some proportion of the hardware you purchase in the process of fixing it.
That all said - yea some people are totally going to hack that or my name isn't 46 DC EA D3 17 FE 45 D8 09 23 EB 97 E4 95 64 10 D4 CD B2 C2.
Yes, there is currently a ~$1m public bounty, probably more if you know where to look privately. You’d have to check your ethics at the door in both cases, but they do exist.
Nvidia did not say it will be a hardware limitation. In fact, they will almost certainly implement it in software. For example a "Lite Hash Rate" card will probably have a bit permanently set to 1 in the firmware/eeprom. The driver will read the bit, and arbitrarily enforce the restriction on such LHR card. This solves potential legal issues of retroactively crippling cards already out in the market, since only new cards sold from now on as "LHR models" will have the bit set to 1.
But miners will find another software hack (just like they did for the RTX 3060 earlier) to bypass the restriction.
Not entirely true, and also not accepting that one person's "scalper" is another person's "bought this but decided I would rather have the money it seems to be worth now that I see how much this is".
Secondary markets provide liquidity, allow for original sellers to trade money for time, provide reputational protection based on societal perceptions (this one is a bit weird, and maybe the less defensible of the reasons. Selling your own inventory on a secondary market to avoid negative press for high prices is thwarting normal market information principles, IMO), etc.
> Not entirely true, and also not accepting that one person's "scalper" is another person's "bought this but decided I would rather have the money it seems to be worth now that I see how much this is".
That’s a bit of a straw man, literally no one considers that scalping. It’s generally understood to mean buying more of scarce product than you could ever possibly need with the intent to sell it at a massive markup.
Scalpers are parasitic rent seekers in the digital age. They do nothing to improve the logistics or liquidity of markets. They merely seek to monopolise supply to extract profit from consumers for a product they did not produce.
> That’s a bit of a straw man, literally no one considers that scalping. It’s generally understood to mean buying more of scarce product than you could ever possibly need with the intent to sell it at a massive markup.
That is by no means the accepted definition, nor an apt description. I know people that bought two PS3's when they came out in 2006, one to play, one to sell. That is generally accepted as "scalping", but they were not buying more than they could ever possibly need.
Many, many people that participate in the resale market are people acting like this. They buy tickets for themselves and some extra ones while they're at it because they were lucky enough to by available at the right time and/or get lucky. Sometimes they also do it for the occassional event or good they don't plan to use.
These are "scalpers" in every single single sense of the word, and the only difference between them and someone that makes a business out of it is scale.
> Scalpers are parasitic rent seekers in the digital age. They do nothing to improve the logistics or liquidity of markets. They merely seek to monopolise supply to extract profit from consumers for a product they did not produce.
Scalpers are just brokers that work in a different product. They make money by arbitrage, where the primary sales market is underselling a good compared to the secondary sales market. Additionally, they provide accurate market pricing because people responsible in the primary market don't want to for whatever reason (common ones includes upsetting ones fans, it being more work, harder to work out contract payments, etc).
And lest you think it's easy to just point at scalpers/brokers and at all the money they make because they're selling a $50 ticket for $200, consider that those are the extreme cases, and relatively few tickets go for that. There's also many tickets that go under cost. In the same event. By significant amounts. It's not uncommon to get tickets for 20% cheaper on stubhub. In some cases, when brokers have bought tickets and the event didn't sell out, you can find tickets for single digit dollars that went for $40+ originally.
I've talked about this before here.[1] In that example, I pointed to the market conditions for a specific event at that exact moment, where the primary market (TicketMaster) wasn't sold out and charging $39.50, TicketMaster's own secondary market was charging $36.50 for the same tickets, and Stubhub was charging $27. Who reaps the benefit of getting tickets for more than a 25% discount? Who do you think ended up paying for that? Where do you think the funds came from to pay for that? (here's a hint, you need to make an occasional 200%-300% profit in that business to break even over the long run in a lot of cases)
Here's another question, why and how is this different than the stock market, and in the ways it's different, how does it matter to the perspective you're expressing?
> These are "scalpers" in every single single sense of the word, and the only difference between them and someone that makes a business out of it is scale.
You're right they are scalpers; they are buying more than needed with the hope of making a quick buck.
However, like most things it's a matter of degree. Your friends were acting in the wrong and in the aggregate they did harm the market, but the people doing it professionally cause the most harm individually and hence tend to raise the most ire.
> Scalpers are just brokers that work in a different product. They make money by arbitrage, where the primary sales market is underselling a good compared to the secondary sales market.
They create scarcity in the primary market, which forces people into the secondary market. If scalpers did not exist, then the same number of people would get tickets, but there would be a greater welfare gain for consumers.
> And lest you think it's easy to just point at scalpers/brokers and at all the money they make because they're selling a $50 ticket for $200, consider that those are the extreme cases, and relatively few tickets go for that. There's also many tickets that go under cost.
They may be taking some risk in their venture, but they're still not providing any value. They are needless middlemen in a market that already sells direct to consumers. Also the cases are not that 'extreme', ask anyone trying to buy a graphics card right now, gasoline a week ago, or toilet paper when Covid-19 was starting up.
> Who do you think ended up paying for that? Where do you think the funds came from to pay for that? (here's a hint, you need to make an occasional 200%-300% profit in that business to break even over the long run in a lot of cases)
Presumably they are claiming a bigger share of the welfare pie than they are giving, else they wouldn't be participating in the market.
> Here's another question, why and how is this different than the stock market, and in the ways it's different, how does it matter to the perspective you're expressing?
The stock market has a social purpose. It provides a means for companies to raise capital to undertake investment. The market system is theorised to be the most efficient means to allocate this capital.
The scalpers don't serve a social purpose, they merely extract welfare from transactions that would have otherwise favoured consumers.
> Your friends were acting in the wrong and in the aggregate they did harm the market
Please explain this harm to the market. I don't see how the market was harmed in any way.
> They create scarcity in the primary market, which forces people into the secondary market.
There exists scarcity in the primary market, because otherwise there would be no benefit to buying the tickets. That's a fundamental misunderstanding you have. Resellers do not generally create demand, they capitalize on existing or future demand.
> the same number of people would get tickets, but there would be a greater welfare gain for consumers.
Define "welfare gain". I contend there is also welfare gain for consumers with a secondary market, but not necessarily the same consumers. The primary market prioritized people that are available at certain times and have money available at the initial sale time. The secondary market prioritizes people that may not have been available at the initial sale time at the cost of a more variable cost.
You can contend that your group of consumer is better or more worth than the group I've defined, but if that's your goal, please do so. Otherwise, a secondary market provides access for at least the same number of people, and sometimes more, as it's possible (and likely) that while some tickets might go at a premium, some others might go at a discount because of poorly executed strategies by brokers.
> They may be taking some risk in their venture, but they're still not providing any value.
They are. That are providing access. Without a secondary market, after the last primary market ticket was sold, it would be impossible to buy tickets to that event. Even if you allowed a secondary market but somehow restricted it to only those that intended to go but could not, you would shut out all those that wanted to go but could not be available to buy tickets during the period it was initially on sale on the primary market. For some events that's as short as a few seconds (and yes, even without brokers).
> They are needless middlemen in a market that already sells direct to consumers.
So is Amazon. So is your local Supermarket. So is any fresh fruit or produce market for that matter. I mean you can just drive to the farm, right? I hope you only like your produce and fruit in season, because people that warehouse it to sell at times when the market isn't flush with that product are just needless middlemen in a market that sells direct, right?
> Presumably they are claiming a bigger share of the welfare pie than they are giving, else they wouldn't be participating in the market.
If all you prioritize is cost, then you're not serving people very well. The very nature of a market is that the many diverse needs of the buyers will be served by different sellers that offer slightly different incentives for different costs. If we only prioritized for cost in food, we'd all be eating rice and beans every night and that's all that would be grown. Instead people prioritize taste, and nutrition, and health, and we have an actual market. If we only prioritized for cost in vehicles, we'd all be driving either a bicycle or a stripped down motorcycle, because who cares about comfort or safety?
> The market system is theorised to be the most efficient means to allocate this capital.
The market system is theorized to be the most efficient means to alloow buyers with diverse needs find a seller that can provide those needs. Sometimes that's cost, sometimes it's something else.
> The scalpers don't serve a social purpose
I've outlined some already above. To repeat, they provide liquidity, meaning there is availability of tickets at a cost people are willing to pay more often than without them. They provide the ability to find the true value of a ticket at any time, rather than the fiat price that was offered initially. This can mean that tickets are available for cheaper than originally offered for (see my real life example noted earlier).
You lost your entire argument right there. Amazon doesn't price gouge, and buys with the express intent to sell with reasonable margins to customers. They provider valuable services, like customer service and fast delivery. Scalpers provide jack shit value other than trying to rip off customers because they got something first, while offering no other value to customers.
> they provide liquidity
No, they don't. They steal liquidity, and sell items at markups while offering no other value to customers. None. Zero.
I didn't say they did. But by the argument of the GP, they are often (depending on the product) "needless middlemen in a market that already sells direct to consumers", which is what I was responding to.
> They steal liquidity
They offer stuff for sale in markets which would have nothing for sale at other times (because if supply didn't outstrip demand, there would be no profit to be made). That is liquidity where it might not have existed previously.
I understand not liking scalping. I don't necessarily like it (I would prefer there was enough supply to satisfy demand). But there's a difference between not liking something and not understanding it and denying the reality of it. You can't stop it without understanding what makes people buy things to resell at a profit, why others are willing to pay that extra amount, and why there aren't enough of that thing to go around in the first place which allows it to happen.
And you didn't provide any argument against them being "needless middlemen". Many middlemen are not needless, like Amazon, where a value is provided that benefits manufacturers, distributors, warehouses, sellers, and buyers. Some asshole buying tickets or PS5's specifically to resell with massive price hikes is not a valuable middleman providing a valuable service. They're a leech, forcing themselves into the middle of a transaction they didn't belong in the first place to steal value from both sides of the marketplace.
HBO was a perfect example of this. Cable companies acted as the middlemen, because HBO didn't have the staff or inhouse expertise to operate a direct-to-consumer facing product. Now they do, but cable companies can still offer services that make their participation as middlemen sustainable and desirable for some consumers.
> That is liquidity where it might not have existed previously.
It did exist, only it was stolen by scalpers. They're not creating value out of thin air. They're not redistributing assets geographically to make them more accessible, or offering secondary insurance or warranties that make choosing them a smart option. They're stealing opportunities from actual customers looking to purchase a service or good, but instead are forced to secondary markets because of rent-seeking parasites.
Scalpers only exist in markets where somebody is selling products below value.
Without scalpers, the product is distributed by sheer luck like a lottery, or being well-connected and knowing somebody who has early access to the product.
You can argue that a lottery mechanism or being well-connected is more fair that having the necessary money. There are a lot of people in planned economies where everything from food to housing to transportation works that way, and they would probably disagree.
> Not entirely true, and also not accepting that one person's "scalper" is another person's "bought this but decided I would rather have the money it seems to be worth now that I see how much this is".
Even just dropping resales to one GPU per person per year would make an enormous difference, let alone if it was limited to people that genuinely bought the one GPU for themselves.
It doesn't work. It's unenforceable without the government to enforce it, and even then people will skirt it.
Rules constraining how a market functions often don't work or have unintended consequences. The only real solution is to attack supply and/or demand. A rule limiting how many a person can buy doesn't actually affect demand, it just affects that market's ability to respond to demand. You get people that circumvent that, and if it's onerous enough you'll get a secondary market where they cost more but there's no limit on the amount you can buy, if there wasn't one already.
That is, it's restrictions on a free market which create secondary markets. If the price was constantly in flux base don demand, there would be no secondary market because it would provide nothing over the primary one.
People don't want that though, because we've been conditioned over the last century to expect prices to be stable because we've had large companies that decided to innovate and compete in other areas that decided pricing things accurately based on real world local conditions. I mean, I understand, I'm the same way. I don't want to walk into a store and find the thing I went to buy is twice as expensive as it was yesterday.
I do think that's a more natural and sustainable state though, as long as market principles are actually prioritized though, instead of just being paid lip service (having one entity control a large chunk of a market is bad, and so is making it hard to reason about items and features in a market, as competition and information are the life-blood of free-markets).
> It doesn't work. It's unenforceable without the government to enforce it, and even then people will skirt it.
Okay, but when I said "dropping" I wasn't talking about a rule, I was using that to demonstrate the problem.
> A rule limiting how many a person can buy doesn't actually affect demand, it just affects that market's ability to respond to demand.
There's a nearly fixed supply, because no amount of demand can affect the shortages.
There's a nearly fixed demand, because enough of the cards are going to be sold at MSRP to keep stoking it.
In a situation like that, someone arbitraging the prices is not helping supply and demand meet, they're just making a profit.
You want some amount of secondary market so that the people that very badly need a card can pay extra to get one now. But a tiny percent of cards going onto ebay is enough to fulfill that role. If half the cards end up massively marked up on ebay, it doesn't help allocate them more efficiently in any significant way, it just takes more money from people.
> when I said "dropping" I wasn't talking about a rule, I was using that to demonstrate the problem.
How is restricting activity not a rule? I don't think it would demonstrate the problem at all because I don't think it would actually do much (most people would ignore it). Maybe I'm misunderstanding what you meant originally or mean here?
> There's a nearly fixed supply, because no amount of demand can affect the shortages.
If demand dropped to the point below supply it wouldn't be a shortage.
> There's a nearly fixed demand, because enough of the cards are going to be sold at MSRP to keep stoking it.
> In a situation like that, someone arbitraging the prices is not helping supply and demand meet, they're just making a profit.
Sure they are. Without a secondary market and with a primary market that is fixed-price and a limited supply, after demand meets supply, nobody gets any more of that product, which means there's zero liquidity. With a secondary market, people re-sell for a profit, and the market has liquidity again. The people that want it are able to get it as long as they are willing to pay the extra amount. It's possible to buy the item where it would not be previously.
> You want some amount of secondary market so that the people that very badly need a card can pay extra to get one now. But a tiny percent of cards going onto ebay is enough to fulfill that role. If half the cards end up massively marked up on ebay, it doesn't help allocate them more efficiently in any significant way, it just takes more money from people.
I agree. I just don't think you can do anything about it usefully except to try to increase supply or reduce demand through various means. Everything else I've seen fails or has unintended consequences (which are hard to reason about ahead of time because they are by nature unintended).
I'm not arguing free markets always produce a good outcome, but I do think they generally provide the best outcome you can expect given the environment without relinquishing all control (and I think central planning only works for limited scopes and limited time frames).
The simple solution is to just increase the price of these cards to what the market deems they are worth, and the resale market problem goes away. The problem is that nobody (even me) really wants that, I'm just willing to say that while I don't want it for various reasons, it does solve the problem. It does that by reducing demand by increasing the price.
> It doesn't work. It's unenforceable without the government to enforce it
It seems to be working pretty well here in the UK actually, for nvidia's Founders Edition cards. They have a relationship with a single retailer, and you can buy one card.
Yes, people can circumvent it to a small extent, but not that easily.
You're just parroting your free-market religion here.
Yeah I always find it interesting that statements like that ("scalpers hurt literally everyone") can just be made and treated as gospel by most people. Not only is the statement not self-evident, but to your point, just a small amount of thought on the issue makes it obvious what the value is.
People love to get mad at a scapegoat rather than a root cause. So you blame the scalper rather than realizing that the concert you bought the ticket for set their prices way too low - perhaps because selling at the "true" price (somewhere between the sticker value and the scalped value) - would generate negative goodwill, or it would give the perception that an event (say Coachella as the classic example) is only "for rich people". The irony is of course that selling at an artificially low price doesn't suddenly make it not for rich people, it just adds a small random chance that you'll be able to convert your own time sitting there refreshing the website across many browsers into a cheaper-than-it-should-be ticket. But functionally the vast majority of people end up buying from scalpers or at least at a slightly above sticker price.
There's a related discussion about so-called "price gouging". IMO it's the classic scalper argument but just in a different form. Price gouging laws are not just immoral but are actively ineffective at their stated purpose; they just lead to the hypothetical price-gouge transaction never occurring. If you drive across state lines to bring HAM radios or water filters or what-have-you during hurricane katrina, and try to sell at above market rate, you'll be tossed in jail and your goods will be seized by the police, rather than making it out to the people who actually need them and are willing to pay 2x or 3x the usual price.
TL;DR: We've all got these twisted beliefs about how pricing works or the law of supply and demand, an illusion supported by the fact that our respective societies are so technologically/economically advanced that we can have massive supermarkets where you buy commoditized items that you can get at reasonably similar prices anywhere. Whereas if you go back in history to a pre-industrial time, a form of pseudo-bartering was the default and there was not this idea of a commodity, but rather every transaction, every buyer:seller relationship etc was a unique and non-commoditized interaction and thus it wouldn't seem weird to have different prices for different people or different prices at different points in time, etc.
Do you have any data on that ‘majority of people buy from scalpers’ claim?
One reason for anti price gouging laws is that it is not uncommon for people to buy out all supply, then turn around and charge more/sit on a stockpile to solve the artificially created shortage they themselves created - a term for that being ‘cornering the market’.
I haven’t generally seen too much anger at someone legitimately opening up supply by importing more or opening up more supply lines (especially if they say that’s what they’re doing). People have been pretty open to paying more in that case (albeit maybe not 10x more, though that is more because it’s hard to plausibly have such an increase in cost without literally airdropping supplies - which is a different beast).
There’s no shortage of people who tried to pull that and ended up with tens of thousands of dollars worth of toilet paper and hand sanitizer last year. If there’s not an actual shortage, merely a demand shock, trying to corner a market will not go well for you.
And many more that made millions. The ones that get caught get penalized in public/shamed, but there are many more that were not - I personally saw many amazon sellers doing it for months without any apparently penalty.
> The irony is of course that selling at an artificially low price doesn't suddenly make it not for rich people, it just adds a small random chance that you'll be able to convert your own time sitting there refreshing the website across many browsers into a cheaper-than-it-should-be ticket.
That depends on the level of demand and how low the price is.
It's pretty easy to have a situation where the number of tickets available is higher than the number of people that would have bought tickets for themselves on day one, but you hit immediate shortages when scalpers are also buying.
In a situation like that, scalpers are doing almost all harm. They add liquidity to a situation that already had enough liquidity, and extract tons of money in exchange.
> If you drive across state lines to bring HAM radios or water filters or what-have-you during hurricane katrina
That's the positive case. The negative case is someone buying it and putting it in their garage, or a store vastly increasing the price on something people need and they already had.
If you're trying to get paid for your labor, like driving essential supplies around, I would not call that gouging in the first place.
> It's pretty easy to have a situation where the number of tickets available is higher than the number of people that would have bought tickets for themselves on day one, but you hit immediate shortages when scalpers are also buying.
But the total number of people buying tickets is the same, all that's happen is it's being temporally shifted for the gain of the people that can afford to do so. This only works because the actual offered price of the tickets if far below that real cost people are willing to pay. If tickets were initially offered at an accurate price, there would be no money to be made buying them for resale (well, almost. There's still the option for artist demand to change over time with popularity).
There's only a few solutions to a supply and demand market problem where demand far outstrips supply that actually seem to work. Increase supply, or decrease demand. This has actually been done by some artists and solved the problem. Kid Rock, for example is known to play a large number of dates at a location, inundating with supply to the point only the best tickets can be sold for appreciable markup. Like, in his home town of Detroit, I think he played between 7 and 11 consecutive days in a stadium. Other artists will add dates after the initial sale depending on demand (which often destroys broker profits unless all those dates sell out too).
> In a situation like that, scalpers are doing almost all harm. They add liquidity to a situation that already had enough liquidity, and extract tons of money in exchange.
How good the liquidity there was and how much harm the brokers caused depends on how accurately demand matched supply. If there were 1000 ticket and 1000 people would ahve eventually bought them, then the brokers didn't really help. At the same time, they probably aren't going to make much money, since 1000 people willing to pay $40 doesn't necessarily mean those 1000 people are willing to pay $60, and given that reseller exchanges charge about 10% of the sale cost, they need to charge a lot more to make a profit. Brokers don't tend to want to buy for events where they can't really make money, so they try to avoid these events.
Alternatively, if the event has more tickets than consumers to buy them, brokers don't want to buy those either. Sometimes they do, and they sell at below market, sometimes well below market, just to recoup some of their money (having 20 tickets of 1000 at the event you bought for $40 when there's still 200 for sale on the primary market when the event is in a week means lots of tickets for sale for $20 or way less).
Finally, there's events where there's a lot more consumers than there are tickets. Perhaps there weren't enough tickets at the sale day to sell out immediately. It would have sold out well before the event date though, because there are way more consumers than tickets. In this case, at that point liquidity would have dried up. Brokers provide liquidity over the lifetime of the event. That's what they provide, and for that they extract money. There's a debate to be had as to whether they provide enough value for that service, but it's false to say the event had "enough liquidity", as if there was enough liquidity there would be no margin for brokers to make money, especially not the 10% cost on sale price needed to make a profit on the exchanges.
> But the total number of people buying tickets is the same, all that's happen is it's being temporally shifted for the gain of the people that can afford to do so. This only works because the actual offered price of the tickets if far below that real cost people are willing to pay. If tickets were initially offered at an accurate price, there would be no money to be made buying them for resale (well, almost. There's still the option for artist demand to change over time with popularity).
"all" that's happening, no. Causing people to pay more, even if they're willing to pay more, means they get less benefit out of the transaction.
> Finally, there's events where there's a lot more consumers than there are tickets. Perhaps there weren't enough tickets at the sale day to sell out immediately. It would have sold out well before the event date though, because there are way more consumers than tickets. In this case, at that point liquidity would have dried up. Brokers provide liquidity over the lifetime of the event. That's what they provide, and for that they extract money. There's a debate to be had as to whether they provide enough value for that service, but it's false to say the event had "enough liquidity", as if there was enough liquidity there would be no margin for brokers to make money, especially not the 10% cost on sale price needed to make a profit on the exchanges.
There would have been enough liquidity for the people that cared about the event to be able to purchase. That's enough liquidity. There is more liquidity now, and the benefit is that some of the people who didn't care very much get tickets too. This is a benefit, but it's not worth the downsides that the average amount paid goes up so much and that a bunch of people that were ready to buy a ticket on day one are now excluded.
> moral but are actively ineffective at their stated purpose; they just lead to the hypothetical price-gouge transaction never occurring. If you drive across state lines to bring HAM radios or water filters or what-have-you during hurricane katrina, and try to sell at above market rate, you'll be tossed in jail and your goods will be seized by the police, rather than making it out to the people who actually need them and are willing to pay 2x or 3x the usual price.
The reason is they don't want private individuals entering danger zones just to make a buck - a profiteer could easily end up a victim from the dangerous situation.
More often than not price gouging just makes things worse. During the early days of the pandemic you couldn’t find toilet paper in stores, but there were people set up one the road side willing to sell it you for crazy prices. Did these people manage to setup an international supply chain to furnish their road side store? Almost certainly not, they cleaned out the supermarkets ahead of other people.
The same thing happened with the colonial pipeline hack.
Aren't scalpers only there because the product is clearly underpriced? Why not increase prices till the scalpers are gone or simply auction the GPUs off? That's clearly what the market is pointing at.
Normally I'd agree (eg: I think limited concert tickets should simply be auctioned off).
This is a little trickier. You have a consumer grade product aimed at a mass market segment (gamers) being used as a glorified financial market device (crypto).
You could just sell it at whatever price people are willing to pay for (crypto) and make a big buck. You'd likely wreck the gaming industry in the process. If you feel the crypto market is there to stay forever and that it's your best bet as a manufacturer going forward, it could possibly be a good move.
If you think its a temporary fad though, that the gaming market has a larger long term return (if it's allowed to thrive), and that this setback, even if temporary, is harmful to your long term plan, then it's an issue. If you think that the gaming industry beyond the GPU market (eg: streaming grids) have value, and you want to foster those because it will make more money in the long run, then the current situation isn't looking so good.
What it looks like is a large public company thinking more than quarter to quarter for once. It's actually kind of confusing, but that's what it looks like to my untrained eyes.
This is missing half the story. Yes, things can be temporarily underpriced and then an appeal to scalpers makes sense, as scalpers can instantly raise the price to the market clearing rate. But at the same time they can instantly lower the price to the market clearing rate.
What manufacturers and consumers both want is price stability. They want prices to change in regular intervals and in predictable amounts. Both producers and consumers, but much more producers than consumers, need to make long range plans which require stable pricing. So when the iPhone first came out there was huge demand. Why didn't Apple auction the phones off? Because Apple wanted to anchor expectations for what the phone would cost over the long term. They certainly did not want consumers thinking that if they waited the phone would become cheaper. Thus they did not want consumers to think the phone's price was subject to a daily auction. Instead, it's better for Apple to have occasional shortages than to let people think that iPhone pricing will be moving up and down a lot. That allows consumers to make long term plans as well.
So manufacturers want stable pricing, they want happy consumers, and they don't want surprises. Consumers want the same thing. That's why people hate scalpers. You can draw all the supply demand curves you want, but that doesn't change the fact that people need to make long range plans, and this requires stable pricing.
But "scalpers" are the people who stabilise prices, by buying when it's cheap and selling when it's expensive. (Remember that a nominal low price that you can't actually buy at is worse for the consumer than a high price that's actually available).
That's not the point: the point is that Nvidia want to still have regular customers who, when they think "I need a gaming rig" think "Nvidia".
If Nvidia becomes "GPUs are cryptominers", then once demand dries up, their marketshare is zilch, and no one's writing games optimized for Nvidia cards anymore, and there's a big pile of bugs they've not fixed with new games trying to use Nvidia cards.
Even worse, consoles aren't having these availability problems. If you buy a console, and you start building a games library, making friends who you play with on a daily basis (and you usually cannot crossplay between consoles and PC due to skill differences between controller/m+kb, sometimes it works with a controller on PC but most of the time it doesn't) then you are now locked into that ecosystem. You aren't buying a NVIDIA 40 series card, you are buying a PS5 Pro. The longer this goes on, the more customers NVIDIA is losing in the long term.
Inventory levels for consoles aren't quite normalized and available but with a stock tracking discord you can have a decent shot at getting a notice, going to a website, and successfully checking out if you hurry. In contrast you have zero shot at GPUs as a human, there are "cook groups" (the same groups that buy up fancy sneakers and scalp them) using backdoor exploits and botnets or networks of proxies embedded in browser addons, and the hardware is literally are gone the second it's up, or even before.
Rather notoriously, one of the cook groups got ahold of the DigitalRiver item IDs for the 3080 before the launch, and they used API requests to poke orders into the backend. So the items sold out before the listing even went up on the website. That is emblematic of the problem, every mechanism is being probed and any backdoor is being used to punch in orders before humans can get them. There are exploits and botnets and proxies being used and everything, hugely organized and sophisticated operations.
Every major retailer and every AIB partner (Zotac, Asus, etc) is heavily botted to the point where you stand no chance unless you pay for a $600/mo sneakerbot.
To be honest, I used a Telegram alerts group (Brobot) for 3090s and 5950Xs and was able to get both within a week of trying. There were only a couple opportunities but I managed to get 2x3090s and a 5950x within those windows. It's definitely doable, just very annoying. I'd rather get a spot in line than race to be through the door every time.
The scalpers are there because the supply of cards is too low. There is a global supply crunch for pretty much everything right now, but Nvidia also doesn’t want to build out supply for something (mining) which they consider a short term issue.
Increasing supply is the way to get rid of scalpers.
Absolutely - if they wanted they could make a killing (short term) and auction to Eth farms.
That said, they are trying to preserve market / mind share in the longer term with existing customers (gamers, AI/ML) and partners (OEMs etc). And those folks aren't ready to pay the crypto price point.
So they are giving up short term money (from auctions etc) for ideally long term market share.
Short term they could make a lot of money that way, but then they may lose gamers who will likely still want gpus after miners no longer need them. It's not a one off transaction.
partners and distributors are forcing retailers and etailers to take PSUs and motherboards if they want to get GPUs, frequently very shitty mobos+PSUs that have been stuck in inventory for a long time and they've been having trouble moving. Like, large quantities, 50 A320 motherboards for one GPU type quantities.
This is one of the reasons that Newegg is doing the Shuffle with those terrible deals - they are passing some of the junk they've been forced to buy along. So now you get a 3 year old watercooling-only mobo and a grenade-tier PSU with your GPU.
This applies to brick and mortar stores too, it's not just about keeping PC builders happy, but if they let one guy walk in and buy every GPU they've got, then they don't get the person coming in to build a PC and buying a motherboard, memory, etc, and they need to move those products because distributors are making them buy them to get GPUs.
The behavior of the AIB partners and distributors is really, really predatory here, they are definitely taking advantage of being the ones in control of a highly desirable commodity.
> a) let's keep consumer grade stuff stable in price
Consumer GPUs had far from a 'stable price' before the mining boom.
GPUs have more than tripled in MSRP once you factor in that NVIDIA has moved lower-tier chips that previously only featured in their lowest end x50 and x60 tier GPUs up the stack and started selling them for $400+ MSRP. Look at the GTX960, which launched at $150 in 2014, against the 3060 which launched at an MSRP of $330.
It's even worse at the high end. Flagship GPUs like the 980ti and 1080ti launched at MSRPs of $650 and $700 respectively, now the high end GPUs are $1200 (2080ti) and $1500 (3090).
> none of it is malicious.
It absolutely is malicious. NVIDIA is trying to stop a strong second hand market from being formed so that they can continue to charge ridiculous prices for GPUs that should be 1/2 to 1/3 their current price if the market was healthy.
I don't know how you think that if GPUs were cheaper then miners would be buying less of them. Miners are a black hole for computing power - they can absorb near infinite amounts of processors since they know (or strongly believe at least) that they'll pay for themselves pretty quickly.
I think Nvidia has some problems and their chips should be cheaper - but if that were the case then this solution (splitting the markets into regular consumers and miners) would be even more necessary.
I also disagree with it being malicious, I think it's a perfectly reasonable decision to attribute to some pretty sane decisions around market preservation. We here know about miners eating up the GPU supply, but for the average consumer Nvidia is just hording their chips or they're idiots that didn't produce enough - no matter what the imagined reason they're the people between the average consumer and shiny ray tracing in minecraft.
> I don't know how you think that if GPUs were cheaper then miners would be buying less of them.
It would increase supply by forcing fabs to scale (would take years anyway, but should happen sooner rather than later).
> Miners are a black hole for computing power - they can absorb near infinite amounts of processors since they know (or strongly believe at least) that they'll pay for themselves pretty quickly.
And that isn't going to change even with these limited GPUs. Mining with ethash is still profitable even with the halved hashrate, and other algorithms like kawpow and cn-gpu are not limited at all.
The only thing that's going to get rid of PoW mining is the entire shitcoin market tanking. As long as the bubble continues there's going to be idiots spending money on scalped GPUs.
The fabs did scale down near the beginning of COVID-19 AFAIK when the economy was in a panic and all sorts of manufacturers were canceling orders from people further up the chain - and that does account for some of the shortage we're seeing now (since that production time was resold to other consumers) but it's a much smaller impact than the 30XX line's attractiveness to miners. I don't think there is honestly the capacity to meet these levels of demand right now (as opposed to there being readily available production capacity that's either idle or doing something that could be outbid).
I also don't really see how keeping all of the consumer groups (miners and regular folks) using precisely the same model of card instead of two incredibly unbelieveably similar cards would actually increase demand. If anything there being a card optimized for hashing (i.e. with unnecessary bits stripped off) might lower the cost to produce such a card and allow miners to actually purchase more of the card compared to paying for a nearly top of the line consumer video card.
I don't actually know how much we'll see Nvidia try and scale up (since that extra purchased capacity will be a liability if Eth suddenly tanks) but I think their decision to increase scale will only be minorly impacted by this effort. I will admit there will be some impact since they could refuse to increase the 3070 supply (please correct me if I've got model numbers turned around) without having as dramatic an effect on their customer base - however, that'd honestly just return them to square one where the miners are going to pick up consumer grade 3080s to keep up with mining projections.
I think the important thing here is that nothing is being made impossible - it's being made difficult which should have a corresponding effect on the value of these cards to miners unless they screw it up again in a major way. People trying to absolutely prevent video game piracy have either
1. Screwed it up and allowed a sharpie to defeat their system
2. Bricked a whole bunch of legitimate users' computes and ended up in class actions
The successful approach to prevent piracy is to price things fairly and while making it less convenient to pirate things - honestly a huge driver here in the modern world is content that's enriched by being online, not stupid "You must have an internet connection to play this single player game" but "If you're online you can tap in a friend for help" - that sort of online integration significantly lowers the value for pirates while allowing legitimate users to only see upsides.
> Look at the GTX960, which launched at $150 in 2014, against the 3060 which launched at an MSRP of $330.
Looks like I'll be hanging on to my 960 for the foreseeable future, then. I'm not interested in mining, but I've started thinking a bit about playing with CUDA, and I'm suddenly a lot less interested if Nvidia might decided to gimp my work because I inadvertently did $FOO that is commonly done by miners.
nvidia could take advantage of eth craze in short run and auction cards or chips. They would make a ton more in short run. But crypto folks would be only customers (in short run) and rest of market would risk migrating away from them.
Crypto is very very frothy, so preserving some supply to bread and butter / ecosystem supporting sales makes a lot of sense to me.
c) is nonsense. There are no downsides to a temporary boost in Nvidia's profits, even if it means profits eventually falling back to normal levels when ETH drops in value. Also, LHR (gaming) GPUs and CMP (mining) GPUs share the exact same supply chain and components. When/if crypto demand suddenly drops, Nvidia will still have to deal with the oversupply of components. Having segmented the market between LHR and CMP GPUs does not in any way make it easier for Nvidia to forecast overall production capacity.
It is a real risk when gamers (the every day bread and butter) or ML model folks (emerging bread and butter) markets will stop using them because they can’t get reliable supply. Both of those groups do quite a lot of driver validation, workload tuning, and other platform specific stuff. If another competitor gets those markets, that will hurt for a long time.
According to Tom's hardware analysis the CMP gpus are leftover Turing architecture that would otherwise have gone to the now less desirable GTX 1660 Ti, or 2080 Ti.
And when they are finally using the new Ampere silicon, it's likely those chips that did not pass QA for being made into a RTX 3080.
So they are getting rid of overstock/dead stock already.
The issue is that production is inelastic compared to demand, so scalping provides no additional value and creates higher prices by making demand seem even higher.
It also creates an incentive for those unwilling to pay high prices to find ways to do without, or to delay their purchase until production has caught up.
none of it is malicious. its just the market stabalization problem
a) let's keep consumer grade stuff stable in price
b) let's charge miners 3x, because they willing to pay 3x, and destroy the scalping market which is VERY anti everything. Scalpers hurt literally everyone.
c) let's not de-stabalize nvidia's income again when eth drops in value. They don't want to be beholden to a coin's gamble either. Basically as it stands Nvidia is far invested into eth's value and if it drops their sales drop sharply because of a massive influx of cheap supply.