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AMD's Vega Cards Aren't Good Enough

Advanced Micro Devices' (NASDAQ: AMD) long-awaited reentry into the high-end gaming graphics card market has finally arrived. The company launched mainstream Polaris graphics cards last year, aggressively going after the $200-and-under portion of the market, but eschewing the high-end. That helped AMD win some market share back from NVIDIA (NASDAQ: NVDA), but it wasn't enough to turn its core computing and graphics segment profitable.

With the launch of its Radeon RX Vega cards, AMD can finally challenge NVIDIA in the most lucrative portion of the market. The RX Vega 64, priced at $499 and available today, will take on NVIDIA's GTX 1080. The RX Vega 56, priced at $399 and available on Aug. 28, will go toe-to-toe with the GTX 1070.

The Radeon RX Vega 64. Image source: AMD.

Still playing catch up

Unfortunately for AMD, reviews of these cards suggest that the company is still playing catch up. Review site Anandtech, after running both cards through their paces, concluded that the RX Vega 64 and the GTX 1080 provide similar performance at 4K resolutions, and that the RX Vega 56 provides an average 8% advantage over the GTX 1070. That doesn't sound so bad on the surface, but there are two problems.

First, AMD's new cards are power-hungry monsters. According to Anandtech, the RX Vega 64 consumes between 110W and 150W more power than the GTX 1080 to achieve the same level of performance. For PC gamers who care only about performance, this is a non-issue. But more power means more heat and higher electricity costs. AMD does offer a liquid-cooled version of the RX Vega 64 for $699, featuring higher clock speeds, but this only solves half the problem and adds $200 to the cost.

The RX Vega 56 fares a little better, consuming between 45W and 75W more power than the GTX 1070. For gamers looking for a $399 graphics card that offers the best performance, the RX Vega 56 is it. But if power efficiency is a factor, the choice becomes less clear.

The second problem is that NVIDIA's GTX 1080 and GTX 1070 have been on the market for a long time. The GTX 1080 launched in May 2016, and the GTX 1070 launched in June 2016.  More than a year later, AMD's Vega cards match the GTX 1080 and only slightly beat the GTX 1070 in terms of performance, but require far more power to do so.

Vega's launch has similarities to AMD's last attempt to break back into the high-end market. The 2015 launch of the Radeon Fury line of graphics cards failed to shake up the market because they only matched the performance of NVIDIA's long-available comparable offerings. Fury wasn't disruptive, and neither is Vega. You don't win heaps of market share by fighting last year's battle today.

Given AMD's lack of presence in the high-end market, Vega will certainly win the company at least some market share. But it doesn't look like anything close to a home run, which is what AMD needed. Another problem: NVIDIA will be launching its next-generation Volta gaming graphics cards relatively soon, likely sometime early next year. Those cards will almost certainly trounce Vega in terms of performance.

Like the Radeon Fury two years ago, Vega simply isn't good enough.

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Timothy Green has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Nvidia. The Motley Fool has a disclosure policy.