Nvidia's recent release of the GeForce GTX 980 and GTX 970 graphics processors were a shot across the bow of AMD. Built on Nvidia's "Big Maxwell" GPU architecture, early reviews crowned the GTX 980 the clear single-GPU graphics card to beat in both performance and power efficiency, and at the same $550 selling price as AMD's flagship Radeon R9 290X. Worse, the consensus opinion was that the $330 GTX 970 trumped the $400 R9 290 and delivered frame rates dangerously close to the R9 290X in many tests, despite costing so much less than AMD's cards.

So AMD's doing the logical thing: Dropping prices on Radeon R9 290 and R9 290X cards to make their price-to-performance ratio more competitive.

As first noticed by PC Perspective, Radeon R9 290X cards are now selling for $400 on Newegg, Amazon and other e-tailers, a whopping $150 drop over its previous sticker price. Radeon R9 290 prices, meanwhile, have been slashed to $300, a $100 decrease.

Fudzilla's anonymous sources say the cuts are a direct response to Nvidia's new cards.

By cutting prices so quickly and so drastically, AMD undermines the GTX 900 series' performance advantage, making power efficiency, sound, and price the more key differentiators between the Radeon and GeForce flagships. AMD's cards run hotter and louder than Nvidia's, but is the GTX 970 worth $30-plus more than a R9 290? And sure, the GTX 980 may have a performance advantage over the R9 290X in many tests, but does the difference make up for the $150 between the 980's $550 price tag and the R9 290X's new $400? That's a lot of green.

Our upcoming review of Nvidia's new cards should answer those questions. But the discussion may be moot anyway: Nvidia's GTX 980 and 970 are still in short supply and hard to find online.

Why this matters: With no new GPU architecture of its own announced, AMD's price cuts keep its flagships competitive with Nvidia's new cards--and brings high-powered gaming down to more affordable levels. AMD's flagships were built to work well with pixel-packed 4K displays.