EVGA Won’t Make Next-Gen NVIDIA Cards

In a move that will have significant repercussions for the video card industry in North America and Europe, EVGA today has announced that the company is parting ways from NVIDIA. As a result, the company will not be producing video cards based on NVIDIA’s next-generation of GPUs – and won’t be immediately switching allegiance to AMD or Intel, either. Consequently, NVIDIA is losing their largest add-in board (AIB) in North America, and the broader North American video card market is losing one of its biggest and best-known vendors.

In a brief announcement posted on EVGA’s forums, the company outlined their parting from NVIDIA, while underscoring that this affects the next-generation of video cards, and that EVGA will continue to provide current-gen products and support existing customers.

Meanwhile, in a briefing attended by Jon Peddie Research and Gamers Nexus, EVGA’s CEO (and founder) Andrew Han laid out some further details about the transition. These are both great pieces and as I’m not going to simply rehash them point by point, I’d encourage readers looking for a first-hand recounting of the briefing to check them out.

As laid out in both pieces, EVGA’s parting from NVIDIA comes as the company’s relationship with NVIDIA has, according to EVGA, soured over the years. Most notably, AIB margins have been slowly shrinking over the past couple of decades, with JPR publishing that gross margins at the AIB partners have fallen from 25% in 2000 to 10% in 2015, and finally an estimated 5% this year. Meanwhile, as NVIDIA has slowly ramped up its own efforts to directly sell its Founders Edition (reference) video cards in Best Buy and other retailers, AIBs like EVGA have been put in a position of directly competing with their partner-turned-supplier.

Jon Peddie Research: AIB Gross Margins v. NVIDIA Gross Margins

This, in turn, has put EVGA in a position where they are taking a loss on selling high-end NVIDIA cards, a significant shift from what are normally the highest margin products sold by video card vendors. And while consumers are benefitting from this in the short term via cheaper video cards, taking a loss of hundreds of dollars per video card is not sustainable – nor is it a viable business practice to begin with.

As a result of these factors (and undoubtedly more tales known only between EVGA and NVIDIA) EVGA has opted to part ways from NVIDIA. This means that EVGA will not be selling video cards based on NVIDIA’s next generation of GPUs, and that EVGA is ramping down production of existing GeForce RTX 30 series cards. According to Gamers Nexus, EVGA expects to run out of current-generation cards for retail by the end of the year, with the company setting aside a remainder of those cards as spares to honor warranty obligations.

EVGA RTX 3090 Ti FTW3: A Money-Losing Product

Perhaps equally notable, EVGA has also made it clear that they are not immediately partnering with a competing GPU vendor, either. So for the moment, at least, this is not going to be a case of EVGA switching allegiances to AMD or Intel. Instead, EVGA is going to be out of the video card market for an indefinite period of time. To be sure, according to GN and JPR, the company has not completely closed the door on partnering with another GPU vendor, but they also aren’t actively pursing the matter right now.

And while this marks a massive cut to EVGA’s business – Gamers Nexus reports that video cards represent 80% of EVGA’s revenue – EVGA is not going out of business. The company still has a successful and well-regarded power supply business, as well as a more niche presence in high-end motherboards and gaming peripherals. This also means that EVGA will continue supporting its existing video card customers even once their remaining video card stockpile runs out, as the company still wants to maintain its sterling reputation for customer service.

Commentary: A Big Loss for Consumers, and a Opening the Door To Vertical Integration

EVGA’s exit from the video card industry represents what is easily the biggest shift in the retail video card landscape in over a decade. EVGA is not the first NVIDIA partner to part ways with the company – BFG and XFX were both major NVIDIA partners back in the 00s as well – but EVGA’s exit would seem to be the biggest yet. According to JPR, EVGA held 40% of the North American retail market, and they were a sizable player in Europe as well. EVGA was NVIDIA’s de facto premiere…