The holidays are shaping up to be happy for gamers on a mainstream budget. According to X-Bit Labs, AMD said it had reduced the price of its ATI Radeon HD 4870 videocard and that at least one online vendor will be selling the 512MB model for $199.

"The price of the ATI Radeon HD 4870 is dropping and we expect that the 512MB and 1GB boards should be available on Newegg today for around $199 and $239 respectively, offering an even more compelling value," a spokesperson for ATI/AMD said.

A cursory glance on Newegg backs the spokesperson's claim (not that we ever doubted him) with two 512MB models -- Sapphire and HIS -- already marked down to the promised price point, and even less if you want to try your hand at the mail-in-rebate game. The 1GB models haven't yet dropped quite as low, not before MIR anyway (we were right to be skeptical).

This year has been a good one for PC gamers as AMD and Nvidia have repeatedly cut prices and taken other measures, such as die shrinks (Nvidia) and giving graphics partners the green light to overclock (AMD), to try and one up each other.

Image Credit: ATI via Ubergizmo