Why Nvidia RTX 30-series graphics cards are so expensive in South Africa

South African retailers Evetech and Titan-Ice recently listed prices for the newly announced GeForce RTX 30-series graphics cards from ASUS and MSI on their websites.

Enthusiasts quickly compared the rand pricing of the RTX 3070, 3080, and 3090 from MSI and ASUS to the manufacturer suggested retail pricing that Nvidia announced when it officially unveiled the cards at the beginning of September.

While such direct comparisons using the rand-dollar spot exchange rate are fraught with pitfalls — US prices do not include sales taxes such as South Africa’s 15% VAT — MyBroadband recently compared the launch prices of Nvidia graphics cards dating back to the original Riva TNT in 1998.

The comparison showed that the price of new Nvidia graphics cards have increased much more than anticipated, even considering the weakening rand and inflation.

To find out what has caused these higher-than-expected retail prices for Nvidia GeForce RTX 30-series graphics cards in South Africa, MyBroadband asked Evetech and Titan-Ice for comment.

Evetech did not respond by the time of publication.

Titan-Ice founder Johan de Klerk told MyBroadband that the prices on their website are based on wholesale prices given to them by the local agents of ASUS and MSI. These prices are a starting point only and are not final.

“The mad rush with GPU launches leaves a lot to be desired,” De Klerk said, adding that the dollar-based recommended retail prices that have been circulating leaves several things unaccounted for in our local market, such as transport costs.

“As a retailer, we are not exposed to the basket of costs that the local agents are served with by the local government as well as the transport chain,” stated De Klerk.

“I suggest you get in contact with either the local agents or the local offices of the brands involved for a proper explanation.”

MyBroadband contacted MSI and ASUS to ask what has caused the local prices of GeForce 30-series cards to be so much higher than the indicative pricing from Nvidia.

ASUS did not provide feedback by the time of publication.

MSI’s business development manager for Sub-Saharan Africa, Niel Campbell, explained that the pricing Nvidia announces when it launches new graphics cards has often been a challenge for Add-In Board (AIB) partners.

Nvidia’s suggested retail pricing is “starting from”, not “up to”

“In the past, Nvidia’s reference designs were given to AIBs like MSI to sell as a first-run batch while our custom cards are being prepared,” Campbell said

“Not so long ago Nvidia decided to sell their own reference cards directly to try to push down retail pricing as much as possible and to cause some excitement with low launch prices.”

However, Campbell said that these reference cards from Nvidia are quite limited and can only be purchased directly from their website, so they are not available to South African resellers.

“It is extremely difficult for AIBs to get close to those prices. It has been an issue before so Nvidia decided to add ‘starting from’ to the price tag.”

Campbell noted that Nvidia’s prices are also based on its reference design. MSI adds a custom cooling solution, designs a custom printed circuit board, and includes additional features with its cards.

Some of the GeForce 30-series cards that MSI builds will also be factory overclocked versions of the GPU, which will attract a higher price.

Price drivers: Foreign exchange, shipping

Regarding questions on what drives the cost of graphics cards in South Africa, Campbell said that when you buy goods in US dollars, the banks do not use the spot rate to exchange your rands for foreign currency. Banks add a conversion fee, so the rate is always higher.

Vendors also use the worst-case scenario when estimating launch prices to try and avoid disappointing customers by having to increase prices when the stock lands.

“Shipping costs at the moment are at an all-time high due to limited cargo flights being available. That should hopefully improve as the COVID-19 restrictions are eased,” Campbell added.

Campbell emphasised that the cards are not yet in South Africa, that pricing is an estimate and might still change closer to the launch date.

Comparing South Africa’s prices with the rest of the world

Campbell also noted that most overseas retailers are not listing pricing yet, even though Nvidia asked all AIB partners to include suggested retail pricing.

He pointed to an article on TechPowerUp which reported that the launch prices of GeForce RTX 30-series cards from third-party vendors is also much higher in Germany than Nvidia’s suggested retail prices.

The article refers to listings of custom GeForce 30-series cards on CaseKing.de. At the time of publication, CaseKing listed custom cards from Gigabyte, Inno3D, and Zotac.

It priced the GeForce RTX 3080 by Inno3D at 760.45€, or roughly R15,000. This is much more expensive than Nvidia’s “starting price” of $699 (R13,847 when including Germany’s 19% VAT).

Campbell said that it would be prudent to wait for overseas pricing on their cards to emerge and then compare the local estimates to see if they are in-line.

Limited stock

Responding to questions of how much stock of the new GeForce Series-30 cards has been allocated to South Africa, Campbell said that the first batch will be extremely limited.

“We should be receiving stock on a weekly basis going forward. From October, supply should be more stable,” Campbell stated.

“The cards will be available through all resellers but only a few have decided to start listing the cards ahead of launch.”