What you need to know
- NVIDIA made too many gaming GPUs, creating an excess of inventory.
- The company will work with its partners to reposition the prices of graphics cards, though it’s unclear if reductions will make their way to shoppers.
- NVIDIA recently reported that its Q2 gaming revenue in 2022 fell short of Q2 2021 by over $1 billion.
Throughout the global pandemic, it’s been difficult to purchase the best graphics cards. That’s about to change, however, as NVIDIA CEO Jensen Huang recently confirmed that the company made too many gaming GPUs. As a result, NVIDIA will adjust the cost of some graphics cards for its partners. Whether those savings trickle down to everyday shoppers is yet to be seen, but it seems likely. Regardless of pricing, NVIDIA’s GPUs will be on shelves, which is a welcome change of pace.
NVIDIA recently reported its Q2 earnings figures (opens in new tab), including the fact that the company’s gaming revenue fell short of Q2 2021 by over $1 billion. The company’s overall revenue was up by $6.7 billion, representing a 3% increase year-over-year. The dip in gaming revenue was largely offset by Data Center revenue ($3.81 billion) increasing by 61%.
Huang discussed the figures in a recent earnings call (via The Verge).
“We found ourselves with excess inventory,” said Huang. “Our strategy is to sell-in well below the current sell-through levels in the marketplace to give the channel an opportunity to correct.”
“We’ve implemented programs with our partners to price-position the product in the channel in preparation for our next generation,” he later added.
NVIDIA’s RTX 4000 lineup is set to launch this fall, so the company likely wants to get rid of excess RTX 3000-series stock. Even though the RTX 4000-series cards should exceed their predecessors, Huang explained that the RTX 3000 GPUs will “be layered on top” of “exciting next generation” processors.
The company may also look toward the data center space to unload some of its graphics cards. “We hear quite broadly that GPU supply is in shortage in the cloud,” Huang pointed out.
NVIDIA CFO Collette Kress also mentioned a “new segment of the market” that NVIDIA plans to “reach with [its] gaming technology,” though she didn’t specify which segment.
