With demand for GPUs so weak, Nvidia reports a 51% drop in gaming revenue in the third quarter.
In the third quarter that ended October 30, Nvidia’s gaming revenue fell to just $1.57 billion from $3.2 billion a year ago.
This will reduce the amount of graphics cards Nvidia sells to retailers, Oversupply situation We are facing the GPU market.in the investor Note(opens in new window)CFO Colette Kress said both China’s ongoing economic recession and COVID-19 lockdown “continue to weigh on consumer demand” for both laptop- and desktop-based GPUs. said.
Another factor behind the drop in demand is the decline in cryptocurrency mining. Back in September, Ethereum Finished GPU-based mining has been a key driver of Nvidia graphics card sales over the past two years.
“We believe the recent shift in validating Ethereum cryptocurrency transactions from proof-of-work to proof-of-stake has reduced the usefulness of GPUs in cryptocurrency mining,” Kress wrote. “This may have contributed to an increase in aftermarket sales of GPUs in certain markets, which could impact demand for some products, especially at the low end.”
During the third quarter of the fiscal year, Nvidia GeForce RTX 4090 Despite its hefty price tag of $1,599, it’s a graphics card that continues to sell out. Still, the product failed to support his Nvidia gaming earnings this quarter.
Weak demand has also led to a surge in Nvidia’s graphics card supply. Earnings reports show that the company’s inventory has reached $4.45 billion, up from $2.2 billion a year ago.
Even as gaming revenue plummets, Nvidia continues to grow in the enterprise space. Data center revenue in the third quarter increased his 31% year-over-year, while automotive revenue increased his 86%. In total, revenue for the period he reached $5.9 billion, down 17% from a year ago.
Nvidia expects the challenging fourth quarter of its fiscal year, which ends in January, to continue. The company expects his revenue to remain at $6 billion for the period, down from $7.6 billion a year earlier. That said, Kress expects GPU supply to reach normal levels as the company ends Q4.
“We are adapting quickly to the macro environment, correcting inventory levels and paving the way for new products,” Nvidia CEO Jensen Huang said in a statement.