Nvidia announced preliminary results for the fiscal second quarter which showed a 19% decline in revenues compared to the same period last year. The video card industry collapsed.
On an annual basis, however, revenue growth was 3%, but the gaming sector weighed heavily on Nvidia’s accounts, with a decline of 44% if compared with the results of the same quarter of 2021. Visual computing for professionals also falls (-20%) and the OEM market (-12%). The only sector in strong contrast is the automotive sector, which closed with + 59%; and there is also a shy + 1% of data centers.
The cards don’t sell and the prices go down
Nvidia blamed the decline mainly on the sell-in of video cards, ie products intended for direct sales in stores. Additionally, as seen with its “Out of Stock and In Stock” video card initiatives, Nvidia has implemented pricing programs with channel partners to reflect the challenging market conditions that it expects to continue throughout the third quarter.
By “channel partners” we mean companies such as Asus, MSI, EVGA, Gigabyte, Zotac, which therefore did not find attractive scenarios to be able to sell Nvidia cards. Part of this decline could also be due to the uncertainties of the cryptocurrency market, which have also affected miners who do not use ASIC systems and who have decided not to invest in video cards for mining.
Jensen Huang, founder and CEO of Nvidia commented on the results: “As we expect the macroeconomic conditions affecting sell-through to continue (the percentage of merchandise actually sold to the customer out of the total merchandise placed on the market by a particular retailer), we have taken action with our industry partners. gaming to regulate the prices and stocks of the channel. “
Huang is therefore saying that in the coming weeks there could be significant reductions in the price lists of the GeForce RTX 30 seriesand it is possible that the increase in discounts will be directly proportional to the approach of the presentation of the RTX 4000.
However, there is also a saturation of the market to be taken into account, with customers who, having less purchasing power and having finally bought an older generation card at a reasonable price, could postpone interest in the new GeForce.