AMD's Herkelman claims Navi price drop an anti-Nvidia bait-and-switch

AMD has claimed that its last-minute price-drop on next-generation Radeon RX 5700 family graphics cards was, in fact, a pre-planned manoeuvrer designed to force rival Nvidia into mispositioning its equivalent boards.

AMD officially unveiled its Radeon RX 5700 range, based on its next-generation Navi graphics architecture, at the Electronics Entertainment Expo (E3) in June and did so with official pricing. When the boards finally dropped earlier this month - in Radeon RX 5700 and Radeon RX 5700 XT forms - they came with a price cut from the E3 unveiling: $50 off the higher-end Radeon RX 5700 XT and $30 off the Radeon RX 5700. The cut appeared to be a reaction to Nvidia's RTX Super family of Turing GPUs, themselves a pre-emptive strike against AMD's Navi-based products - but AMD Scott Herkelman, vice president and general manager for its Radeon division, claims otherwise.

In a video interview with Hot Hardware, Herkelman claims that the E3 pricing was an intentional misdirection - a 'jebait', in his own words, a term borrowed from the Twitch streaming community - based on extensive modelling of rival Nvidia's pricing structure. 'We started modelling different competitive scenarios,' Herkelman told the site. 'Their die size is quite big, and we knew what they could probably afford in terms of margins and pricing and what they were currently pricing their products at. We started using this data to say, okay, if they're starting to see lower sales they're going to be under tremendous amount of pressure on price, and they're going to be under a tremendous amount of pressure to figure out what they’re going to do to increase sales once we launch Navi. We know that they have a tremendous burden on their gross margins, because their die size is big, and so we just game-played SRPs [suggested retail prices].

'The prices that we originally put out, we waited to see what they put out. And then we made the appropriate move not only to deposition their Super series but also to logjam their 2060 and 2070, because we knew that they’re having slower success. And we wanted to do a double Jebait, which is not only block their Super strategy but also slow down their 2060 and 2070. That was the real jebait. I can't go into too much more about detail, but it's been so much fun these last couple of weeks just playing that out. It's just fun finally to win.'

While it's easy to dismiss Herkelman's claims as revisionist to hide a panicked last-minute price cut, he offers once piece of evidence to support his claims: A Tweet published just prior to the price cuts with a single word: 'Jebaited.'