After many years, Nvidia has a really fearsome competition as ATI has a cheaper, smaller and better priced chip, while Nvidia has big, expensive and not that much faster chip called GT200. For many years ATI was close enough, but never a step ahead, at least until now.

ATI did its homework really well and RV770XT / PRO are the best chips that ATI ever made; and at the same time, GT200 is faster but cannot really put much distance between itself and RV770XT cards.

Nvidia has already dropped the average selling prices of its GT200-based products, G92-based products and 9600 and 9500 and this clearly indicates that they will cripple the average selling prices and the profits in the current quarter.

Q3 2008 will be very bad for Nvidia, especially when it comes to profits. Nvidia cannot make as much money as it used to per chip and therefore both revenue and profit will be down. We believe that this is a general trend for the future, as graphics will get cheaper due to the heavy competition.

This is a real DAAMIT situation for Nvidia as they have to convince its shareholders that making less money per chip is still fine.