In a brief announcement posted on EVGA’s forums, the company outlined its split from NVIDIA, while emphasizing that it affects the next generation of graphics cards and that EVGA will continue to provide current-generation products and support existing customers.

EVGA will not carry the next generation graphics cards. EVGA will continue to support existing current generation products. EVGA will continue to provide current generation products.

EVGA is committed to our customers and will continue to provide sales and support for the current lineup. Also, EVGA would like to thank our great community for the many years of support and enthusiasm for EVGA graphics cards.

EVGA Administration Meanwhile, in a briefing attended by Jon Peddie Research and Gamers Nexus, EVGA CEO (and founder) Andrew Han laid out some further details about the transition. These are both great pieces, and since I’m not going to just repeat them point by point, I’d encourage readers looking for a first-hand account of the update to check them out. As mentioned in both pieces, EVGA’s split from NVIDIA comes as the company’s relationship with NVIDIA, according to EVGA, has soured over the years. More specifically, AIB’s margins have slowly shrunk over the past two decades, with JPR reporting that gross margins at AIB’s partners have fallen from 25% in 2000 to 10% in 2015 and finally an estimated 5% this year. . Meanwhile, as NVIDIA slowly ramped up its efforts to sell its Founders Edition (report) video cards directly to Best Buy and other retailers, AIBs like EVGA have put themselves in a position to directly compete with their partner-turned- Supplier. Jon Peddie Research: AIB Gross Margins v. NVIDIA Gross Margins That, in turn, has put EVGA in a position where it’s losing money selling high-end NVIDIA cards, a significant shift from what are typically the higher-margin products sold by video card vendors. And while consumers benefit from this in the short term through cheaper video cards, losing hundreds of dollars per video card is not sustainable – nor is it a sustainable business practice in the first place. As a result of these factors (and no doubt more stories known only between EVGA and NVIDIA) EVGA has chosen to part ways with NVIDIA. This means that EVGA will not sell graphics cards based on NVIDIA’s next-generation GPUs, and that EVGA is reducing production of its existing GeForce RTX 30 series cards. According to Gamers Nexus, EVGA expects to sell out of current-generation cards for retail by the end of the year, with the company setting aside a balance of these cards as spares to meet warranty obligations. EVGA RTX 3090 The FTW3: A money-losing product Perhaps just as notably, EVGA has also made it clear that it is not immediately partnering with a competing GPU vendor. So, for now at least, it’s not going to be a case of EVGA switching to AMD or Intel. Instead, EVGA is set to stay out of the graphics card market indefinitely. Certainly, according to GN and JPR, the company hasn’t completely closed the door on working with another GPU vendor, but they’re also not actively looking into the matter at this time. And while this marks a huge cut in EVGA’s business – Gamers Nexus reports that graphics cards account for 80% of EVGA’s revenue – EVGA isn’t going out of business. The company still has a successful and respectable power supply business, as well as a more specialized presence in high-end gaming motherboards and peripherals. This also means that EVGA will continue to support existing customers of the graphics card even after their remaining stock of graphics cards is sold out, as the company still wants to maintain its excellent reputation for customer service.

Comment: A big loss for consumers and an opening to vertical integration

EVGA’s exit from the graphics card business easily represents the biggest change in the retail graphics card landscape in a decade. EVGA isn’t the first NVIDIA partner to part ways with the company – BFG and XFX were both major NVIDIA partners in the ’00s – but EVGA’s exit looks to be the biggest yet. According to JPR, EVGA held 40% of the North American retail market and was a major player in Europe as well. EVGA has been NVIDIA’s de facto partner in the premiere in the West, both in terms of overall video card volumes and in terms of shared usage, with a legacy of producing high quality graphics cards backed by the best support in the industry. As a result, EVGA’s exit is a big loss for consumers and graphics card enthusiasts in general. While NVIDIA can (and undoubtedly will) shift allocations to its remaining AIB partners – Zotac is arguably NVIDIA’s next best-known exclusive supplier in North America – this still represents a reduction in competition in graphics card designs, especially with premium products where EVGA did some of its best work. And none of the remaining AIBs have a reputation for support that matches EVGA’s (though to be sure, reputation isn’t necessarily representative of the real world). The immediate future of EVGA: More Mobos and PSUs But the full impact on the consumer market will depend on what NVIDIA does next. It’s clear from the EBGA briefing that there has been some friction between the two companies for some time, so while these revelations are new to outsiders, internally the businesses have been at odds for some time. This means that NVIDIA has had plenty of time to prepare for the EVGA split (they first reported in April), and NVIDIA already has its own retail operations. In fact, it is these retail activities that seem to have led to what is happening today. It wasn’t until the Pascal/GTX 10 generation of the series (2016) that NVIDIA started selling their own retail cards. for the 20 years before that, NVIDIA relied on AIBs to carry their products. And even after that point, NVIDIA deliberately limited its reach by only selling cards directly and later only through Best Buy. However, I have long wondered how AIBs feel about NVIDIA coming into competition with their own board partners, and now we have an answer, it seems. EVGA is partially driven out by NVIDIA’s direct presence in the market, with the Founders Edition cards undercutting EVGA’s products in price. It’s a relationship that inherently puts AIBs like EVGA at a disadvantage, since NVIDIA has the best brand recognition (all cards are NVIDIA cards) and much of NVIDIA’s R&D is paid for by its internal need for cards reference. This means that AIBs face additional costs on top of buying hardware from NVIDIA, especially if they want to opt for premium designs like EVGA was able to do. In short, NVIDIA’s decision to sell video cards directly, whether intentional or not, is putting pressure on AIBs. And NVIDIA’s proprietary AIBs like EVGA are the most vulnerable. EVGA’s exit from the graphics card market, in turn, opens the door to larger changes in graphics card manufacturing and distribution. Video card complexity has grown significantly over the years, and so has R&D costs at every level. GPUs aren’t just getting more advanced, they need ever thinner PCB routing for memory, more advanced VRMs, massive cooling and more. It’s no different than the fab market, where each generation raises cost levels and discourages the kind of competition that results in lower prices, lower margins and an inability to afford the next generation of the game. All of this, in turn, makes vertical integration look increasingly attractive. While AIBs in one form or another have played a key role in the graphics card market since the dawn of the PC era, offering retail access and support that GPU vendors either didn’t or didn’t want to deal with, the real value they add that, unfortunately, is declining. Graphics cards are getting so complex that, especially at the higher end, the best move may well be to stick with the reference designs. All of this further reduces the value (and uniqueness) that AIBs can offer. The EBGA experiments were not always completed… In short, this may be the time when we see video card production shift to GPU vendors themselves selling their cards, without the use of AIBs. So instead of having 10 graphics cards in a generation and then many variants of AIBs – as is now the case with NVIDIA’s GeForce RTX 30 series – we would have something more akin to desktop processors where there are around a dozen SKUs supplied directly by the manufacturer . Of course, this has been tried once before, with disastrous results (kids, go ask your parents about 3dfx), so it’s far from certain. But EVGA leaving opens the door for NVIDIA to come in and take back 40% of the retail market for themselves if that’s what they want. And if NVIDIA doesn’t fill the void, then NVIDIA’s remaining AIBs will no doubt be happy to do so. The volume gap from EVGA’s output means that almost half of the NVDIIA graphics card market in North America is available. It’s a huge opportunity to reshape that landscape and grab the kind of market share that would take years and years to peel off under more normal circumstances. So, although a dark day for…