On Friday, September 19, 2014, NVIDIA formally launched their newest Maxwell GPUs, namely the GTX 970 and its more powerful sibling, the GTX 980. iLL Gaming was lucky enough to get a review sample of the GTX 980 and we were informed by NVIDIA India that the MSRP for the GTX 980 and the GTX 970 will be ₹46,000 and ₹28,000 respectively. These prices were also confirmed at the launch event that was held in Mumbai.
After we published the review and looked at the feedback we were getting on social media and forums, we saw two common complaints being repeated. The first was that the Stock variants of the cards weren’t listed at any online retailer. However this turned out to be a premature complaint and the stock models were seen at e-tailers subsequently.
The second complaint which concerned us more was that prices for the cards as reported on these sites were at least ₹7000-₹10000 higher than what NVIDIA had confirmed to us. Due to this huge difference, the integrity of our review was even called into question. The increased prices would obviously have changed our Value for money calculations and thus resulted in a lower overall score for the card. And so we decided to investigate what exactly brought about this price disparity.
We initially asked NVIDIA India, Asus India and Zotac India for comment on the matter as well as verified the prices of the cards in online retail as well as at physical retail locations. We were initially told that the prices at retailers were inclusive of taxes which might be causing the disparity. But we found that most dealers add just 5% VAT which would amount to ₹1400 for the ₹28,000 GTX 970 and ₹2300 for the ₹46,000 GTX980.
After further consultations with Asus India, a clearer picture finally emerged. NVIDIA India wanted Day 1 availability for the cards which resulted in Asus and Zotac sending stocks to their regional distributors in advance with tentative prices that were the higher prices quoted at launch. However NVIDIA wanted the manufacturers to sell at the lower prices that it quoted to us and these were finalised at the last moment. However, the communication about the lower prices took some time to reach the distributors and the retailers. Thus it so happened that Prices for the early buyers were much higher than the prices desired by NVIDIA India.
NVIDIA India subsequently explained the marketing process behind this to us. The tentative suggested prices that were sent to the Manufacturers like Asus and Zotac were decided by NVIDIA much in advance and these were on the higher side to allow for adjustment. The Final MSRP, which is the price NVIDIA suggests as the ideal price for the product, was decided just a day prior to launch and this was subsequently communicated to the manufacturers who passed it on to the distributors who in turn passed it on to the retailers. Manufacturers can add cost overheads to this MSRP and price their special variants accordingly. The Retailers can also add their own overheads and taxes though the MSRP provides for Profit Margins for them. The problem in this case was that the MSRP communication took almost a week to reach all the retailers so that price corrections could be applied to their initial tentative pricing. Thus we are now seeing the GTX 980 and GTX 970 priced at their MSRP and some dealers are using it as an opportunity to show steep discounts by keeping the tentative prices on record as well.
NVIDIA also told us that in case there are buyers who paid more than the MSRP and prices adjusted according to it, there is a policy to issue refunds of the balance amount. And that concludes our iLLvestigation.