Why South Africans are angry about graphics card prices

The launch prices of graphics cards in South Africa have increased rapidly in recent years, while salaries have stagnated or declined relative to inflation.

Comparing the prices of new graphics cards to the average take-home pay in South Africa may also point to a larger issue – that high-end consumer electronics is becoming too expensive for the average middle-class person in South Africa.

When the first retail prices for Nvidia’s new GeForce 30-series graphics cards started to appear in South Africa, PC gamers and hardware fans criticised how high the local prices were.

Enthusiasts compared the rand pricing of the RTX 3070, 3080, and 3090 from MSI and ASUS to the 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 — the large disparity in prices led local buyers to wonder whether they were getting fleeced.

As part of an investigation into these consumer complaints, MyBroadband compared the launch prices of Nvidia graphics cards dating back to the original Riva TNT in 1998.

The comparison showed that the launch prices of graphics cards increased more than anticipated in recent years, even considering the weakening rand and inflation.

Nvidia’s pricing vs reality

Local retailers and graphics card distributors explained to MyBroadband that the pricing Nvidia gives as the suggested retail pricing for its reference or “Founders Edition” cards always causes them headaches.

Manufacturers can’t reach Nvidia’s low prices with their non-reference cards at launch, resulting in unfavourable comparison and unhappiness from customers.

However, the chart below shows that Nvidia’s hype machine is only partly to blame for people’s unhappiness over graphics card prices in South Africa.

The data shows that many people now find themselves in a place where they can no longer afford to keep up with their hobby, where just two years ago an average month’s salary was enough to buy an Nvidia GeForce GTX 1080 Ti at launch.

Graphics card prices and take-home pay in South Africa

The following chart plots the launch prices of Nvidia graphics cards over the years against the average take-home pay in South Africa, according to the Bankserv’s take-home pay index.

Take-home pay vs inflation in South Africa

The following chart plots the average salary (nominal) against the inflation-adjusted average salary (real) of the Bankserv Take-home Pay Index.

It shows that when inflation is taken into account, the average take-home pay in South Africa has been trending downward. This means that on average, South Africans earning a salary have been getting poorer every year.

South Africa’s official salary and inflation statistics

The Bankserv Take-home Pay Index is used in this comparison as an alternative to South Africa’s official salary statistics from Stats SA.

For the sake of completeness, we include a chart based on the figures from Stats SA’s Quarterly Employment Statistics. Stats SA’s quarterly reports track the average monthly earnings of people working in South Africa’s formal sector, excluding agriculture.

Stats SA’s official inflation index, the Consumer Price Index, is used to calculate the inflation-adjusted monthly earnings in the chart below.

While this paints a different picture than the Bankserv Take-home Pay Index, even Stats SA’s official figures show that inflation is starting to outpace people’s annual salary increases.

Now read: AMD vs Nvidia – New graphics card showdown

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Why South Africans are angry about graphics card prices