NVIDIA’s financial report this year revealed a phenomenon, that is, this GPU design company, which is almost the benchmark in the industry, has lost a lot of money in the gaming industry. If data centers and other fields were not still the backbone to support NVIDIA’s revenue and expenditure figures, NVIDIA might have been even more embarrassed in the eyes of investors this year. In this regard, NVIDIA CEO Jensen Huang rarely admitted that they were too optimistic about the gaming industry this quarter and produced too many GPU chips, but it did not have a positive impact on the company’s finances. In order to appease investors, NVIDIA will obviously use some radical methods to get investors to change their minds.
Although the epidemic is not necessarily a bad thing for the entire PC industry, it has still made a small profit. But after this wave of demand passed, demand for PCs soon became unsustainable and showed a downward trend. This trend also affects other suppliers in the entire PC industry, including NVIDIA. On the one hand, although NVIDIA has made a small profit through the “mining” craze, on the other hand, the demand for PCs has not been met. This has caused a supply shortage in the entire GPU market for a while. Even a graphics card has been highly speculated for a long time, so expensive that many gamers would rather use internal graphics for their computers than buy a graphics card to cheat themselves.
Nowadays, many players are watching the virtual currency market plummet, and the demand for graphics cards, one of the main components of mining machines, will also decrease a lot, causing the price to fall all the way to the current “normal” price. They are also watching the graphics card market enter the Three Kingdoms War, Intel’s intrusion, and AMD and NVIDIA will launch new cards. Many players want to wait until the new products are launched before considering purchasing, so as not to waste money and ensure that they buy products that truly fit their budget.
NVIDIA CEO Jensen Huang recently admitted that NVIDIA overproduced many gaming GPUs due to poor decision-making. Some of these GPUs may be used in electronic game consoles, but I believe many of them are also used in independent graphics cards. In addition to selling independent graphics cards to serious players who need to upgrade their computers, I believe that more buyers are small bosses who operate private virtual currency mines.
Last year, not only were these GPUs not worried about finding buyers, they also had to increase production speed in order to make more money in this wave. But this year is different from last year. The price of virtual currency has dropped, which has eroded the profit margin of mine owners. Therefore, more people are selling virtual currency or selling mining equipment to realize cash. As mining demand froze, the market demand for GPUs also dropped, so the production capacity that they worked hard to build has now become a hot inventory.
According to Huang Renxun in the earnings call, he will next implement plans with graphics card partners. On the one hand, he will develop a promotion plan for these GPUs, and on the other hand, he will also work hard to prepare for the next generation of RTX 4000 series graphics cards. Obviously, whether it is selling inventory or launching next-generation products, Huang wants to emphasize that his company can definitely do it and will work hard to reverse the losses in this year’s financial report.
Judging from the current market trends, perhaps the best thing NVIDIA can do is to lower the price of RTX 3000 series GPUs and stimulate purchasing through activities and gifts. Although there are still some waiting parties who have a wait-and-see attitude (as do I), there are still many players who are frustrated because they cannot afford a graphics card that meets the budget and performance targets due to scalpers over the past year. I believe this wave of price cuts will soon stimulate the purchasing desire of these players and allow NVIDIA to effectively reduce inventory levels.
However, price cuts alone may not be so easy to clear out the inventory. If the sales of this wave of inventory are still not as good as expected, maybe NVIDIA will use the family heirloom sword, first by emasculating functions and specifications, and then giving a new model. A set of Huang’s knife skills and vest skills can give these GPUs a new sales direction. In the past, NVIDIA has not changed the name of a GPU three times. As long as it can be sold, NVIDIA will not hesitate to do this.
Collette Kress, NVIDIA’s chief financial officer, did not explicitly acknowledge such speculation, but he hinted that NVIDIA would indeed do something different to market these GPUs. What’s more, even if NVIDIA has experienced a short-term loss, the demand in the gaming market is still large. It is expected that NVIDIA will have more unexpected tricks to impress investors.
Source: KOCPC Chinese