Miners lost to gamers – Newspaper Kommersant No. 221 (7422) of 11/29/2022
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Retailers note a significant reduction in prices for a number of components for personal computers in November: the cost of video cards of the middle price segment decreased by 40-50% year-on-year, and RAM cards – by 15%. Experts attribute the dynamics to a decrease in the popularity of mining after the transfer of the Ethereum platform to a system without the use of video cards. However, market participants emphasize that prices have not fallen for all components, but for hard drives and motherboards, on the contrary, they have grown.
According to M.Video-Eldorado, in November prices for video cards in the middle segment (40-60 thousand rubles) decreased year-on-year by about 40%. Ozon has similar estimates, they talk about a fall of almost 50%. Marvel Distribution confirms the trend, but notes a price decrease of only 20%. The situation is similar, according to M.Video, in the segment of RAM cards: on average, their price has decreased by 15%.
In 2021, the prices of both new and used video cards in Russia were steadily growing, they were fueled by the rush demand from miners caused by the dynamics of the bitcoin exchange rate. Then the demand for such equipment on trading floors increased by 70%. At the same time, Russian distributors at that time could only satisfy 13% of the demand for new video card models (see Kommersant dated February 27, 2021).
In 2022, the situation has changed several times. “If you look at the dynamics of prices throughout the year, we will see a sharp increase in March, then a decrease and stabilization by May, then an increase again in the summer and, finally, stabilization again, and then a decline in the fall,” explains Roman Nekrasov, co-founder of the Encry Foundation. . According to the expert, prices for AMD Radeon or Nvidia video cards fell by an average of 8-12% after the September transition of Ethereum from PoW consensus (ETH mining using video cards) to PoS consensus (ETH mining using staking, this approach implies earning on cryptocurrency without use of computing power).
Ethereum is the second most popular asset that at the moment stopped needing video cards, adds Roman Kaufman, co-founder of Berezka DAO and Weezi. “The transition to PoS left hundreds of thousands of miners idle, this is especially clear in Asia, where even the sale of video cards by weight has begun, at $400-500 per 1 kg,” he says. Other factors also played a role, including “a decrease in the degree of anxiety around sanctions and possible difficulties with the supply of video cards to Russia,” says Mr. Nekrasov.
The fall in global demand for computers, as well as the actual cessation of mining on video cards, led to a significant decrease in demand for components, confirms Alexey Rusakov, head of the Citilink PC Components purchasing group. “Demand in the graphics card market has declined, and manufacturers have significant inventory left, resulting in a 54% drop in prices compared to last year,” he says. Also, according to him, due to a decrease in demand and a glut in the market, RAM boards fell in price by an average of 20%. Citilink expects the trend to continue.
According to distributor 3Logic Group, the demand for video cards in the country fell by 20%, says Maxim Rodionov, head of the company’s purchasing department. “But the decline would have been tougher if gamers had not corrected it: they were able to buy video cards at reasonable prices,” he notes.
The only category of components where prices have increased by an average of 13% are hard drives, Mr. Rusakov adds. “Here, the limited supply of the market plays a decisive role,” he explains, “due to the departure of absolutely all manufacturers from Russia and the difficult supply of parallel imports, as well as the growth of logistics costs.” Marvel Distribution adds that motherboard prices have gone up as well. “They are difficult to purchase and bring because of the complicated logistics, and parallel imports add 12-20% to the price,” they say.
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