NVIDIA’s gaming business is in poor shape, and the situation benefits AMD, which is relying more and more on its GPUs to support its growth. But NVIDIA can count on other sectors to guarantee good financial health.
NVIDIA has published a preliminary report on the results of its second fiscal quarter, which ended on July 31, 2022. The American group is posting very solid performance overall, with revenue of $6.7 billion and growth of 3% revenue compared to the same period last year. But the company’s gaming division has shown worrying signs of weakness in the last quarter.
Gaming revenue, primarily comprising graphics card sales, but also GeForce Now subscriptions, dropped 33% in this second quarter of 2022 compared to the second quarter of 2021. Of the 3.06 billion dollars generated last year, NVIDIA has recovered “only” 2.04 billion dollars in recent months. A poor performance offset by the excellent form of the Greens’ Data Center activity with an estimated turnover of 3.81 billion dollars over the period, i.e. a 61% increase from one year to the next.
NVIDIA driven by its enabled servers, graphics cards down
If NVIDIA is of course not to be pitied, these results sound like a failure for the company, whose projections anticipated revenues of $8.1 billion for this quarter. Jensen Huang, Founder and CEO of NVIDIA, attributes the shortfall to poor sales of gaming products. He cites “adverse macroeconomic conditions” and the “component shortages” to explain this setback, and explains that NVIDIA has taken steps with its partners to adjust prices and inventory, as the manufacturer expects the market difficulties to continue in the coming months.
It should be noted that AMD seems less affected by economic conditions. The Reds announced 6.6 billion in sales for their second quarter, of which 1.7 billion comes from the gaming branch and graphics cards, thus catching up on NVIDIA. The presence of AMD components on the consoles Xbox Series and PS5 is probably no stranger to it.
NVIDIA remains confident for the future, citing in particular the field of artificial intelligence as a growing market in which the firm is very well positioned. And the gaming branch should bounce back with the upcoming arrival of the GeForce RTX 4000s.
Source: Nvidia