Market (ge)forces —
Cheaper GPUs are good for gamers, but bad for Nvidia’s bottom line.
Andrew Cunningham –
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Nvidia won’t officially report its second-quarter financial results until the end of the month, but the company is trying to get through the preliminary results today. As with many other tech companies in the last month, the results have been mixed at best. With $6.7 billion in revenue, Nvidia managed to deliver year-over-year growth, but the result was still bad news, as the figure was $1.4 billion lower than the $8.1 billion it had previously forecast.
Nvidia blames the shortage on weak demand for its gaming products On expectations, including its GeForce graphics processors. Nvidia noted “lower channel partner sales,” meaning that partners such as Evga, MSI, Asus, Zotac, Gigabyte and others sold fewer new GPUs than expected. This decline can be attributed in part to the plummeting value of mining-based cryptocurrencies like Bitcoin and Ethereum — fewer miners are buying these cards, and miners looking to offload GPUs on the second-hand market are also for gamers A cheaper source of graphics cards is available.
” As We expect macroeconomic conditions affecting sales to continue, and we act with our gaming partners to adjust channel pricing and inventory,” said Nvidia CEO Jensen Huang. This means we may see further price reductions for existing GeForce GPUs, which have been falling in price throughout the year. Some cards haven’t returned to their original advertised prices, but they’ve been getting closer.
In comparison, AMD’s quarterly gaming revenue increased from 13 last year $1.7 billion this year, thanks in part to its semi-custom hardware-powered consoles like the Xbox Series S and X and the PlayStation 5. Nvidia’s GPU technology powers the Nintendo Switch, but beyond that, Nvidia More reliant on PC gaming revenue.
The good news for Nvidia is that the small overall increase in revenue was driven almost entirely by Driven by the company’s data center business, which includes GPU-accelerated AI and machine learning applications and GPU-accelerated cloud-hosted virtual machines. Nvidia’s data center revenue is expected to grow 61 percent from last year, from $2.37 billion to $3.81 billion.
Nvidia is said to be coming later this year Introducing its next-generation RTX 4000 series GPUs. Based on the new Lovelace architecture, these GPUs may appeal to some gamers who initially ditched the RTX 3000 series due to shortages and price hikes, and are now avoiding GPUs knowing that replacements are coming.
