NVIDIA gaming revenue: down 33% from last year, GPUs are depressed

NVIDIA has confirmed that it pulled in $6.7 billion in revenue during its earnings results for Q2 FY2023, with the company explaining the reason: lower sales in GeForce RTX series graphics cards because of a "tough macroeconomic environment".

2

During the call, NVIDIA's chief financial officer Colette Kress explained that the 33% drop in Gaming revenue for NVIDIA from this time last year, 44% sequentially. Kress explained that the decreases in GeForce GPUs were "primarily attributable to lower sell-in of Gaming products, reflecting reduced channel partner sales due to macroeconomic headwinds".

Translation: the neutron bomb that went off in the GPU crypto mining boom -- and the massive drops in cryptocurrency pricing, and power costs and power concerns in multiple countries in the future -- and the massive prices of GPUs in the last 12-18 months haven't helped, oh and the now back-to-Earth pricing of GPUs isn't enough to spur huge sales of our previously confident sales of GeForce GPUs.

• Read more: NVIDIA helps AIBs purge old GPUs: compromise of 'NVIDIA AIB Revolt'

Kress did note that their GeForce GPUs are capable of cryptocurrency mining, but notes that NIVDIA has "limited visibility into how much this impacts our overall GPU demand". Translation: we don't want to tell you how many GeForce GPUs we sell to crypto miners. Kress continued, adding:

"Volatility in the cryptocurrency market - such as declines in cryptocurrency prices or changes in method of verifying transactions, including proof of work or proof of stake - has in the past impacted, and can in the future impact, demand for our products and our ability to accurately estimate it. As noted last quarter, we had expected cryptocurrency mining to make a diminishing contribution to Gaming demand. We are unable to accurately quantify the extent to which reduced cryptocurrency mining contributed to the decline in Gaming demand".

2

Kress said in full: "Gaming revenue was down 33% from a year ago and down 44% sequentially. These decreases were primarily attributable to lower sell-in of Gaming products, reflecting reduced channel partner sales due to macroeconomic headwinds. In addition to reducing sell-in, we implemented pricing programs with channel partners to address challenging market conditions that are expected to persist into the third quarter".

"Our GPUs are capable of cryptocurrency mining, though we have limited visibility into how much this impacts our overall GPU demand. Volatility in the cryptocurrency market - such as declines in cryptocurrency prices or changes in method of verifying transactions, including proof of work or proof of stake - has in the past impacted, and can in the future impact, demand for our products and our ability to accurately estimate it. As noted last quarter, we had expected cryptocurrency mining to make a diminishing contribution to Gaming demand. We are unable to accurately quantify the extent to which reduced cryptocurrency mining contributed to the decline in Gaming demand".

NVIDIA CEO Jensen Huang said during the call: "We are navigating our supply chain transitions in a challenging macro environment and we will get through this. Accelerated computing and AI, the pioneering work of our company, are transforming industries. Automotive is becoming a tech industry and is on track to be our next billion-dollar business. Advances in AI are driving our Data Center business while accelerating breakthroughs in fields from drug discovery to climate science to robotics. I look forward to next month's GTC conference, where we will share new advances in RTX, as well as breakthroughs in AI and the metaverse, the next evolution of the internet".