Nvidia build too many GPUs – Now expecting sales while it works on something new

Nvidia build too many GPUs – Now expecting sales while it works on something new

Web Desk
August 25, 2022

Nvidia build too many GPUs – Now expecting sales while it works on something new

PC sales dropped significantly this quarter, putting Nvidia and Intel under pressure.
Nvidia’s strategy is to sell-in well below the current sell-through levels in the marketplace.
The company may be powering a new generation of high-performance mobile gaming PCs.

PC sales plummeted this quarter, putting Nvidia and Intel under pressure. ‘What will you do with the billions in lost growth?’ ask investors. While that’s frustrating for Nvidia’s Q2 results, it’s intriguing for gamers, because Nvidia hinted at big things to come.

Firstly, Discounts! CEO Jensen Huang confirmed what we’ve believed for months: Nvidia developed too many gaming GPUs and is now selling them for less. Huang had surplus inventory. “We found ourselves with excess inventory,” says 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,”

To sell as many RTX 3000 graphics cards and chips before the RTX 4000 series arrives this fall, it’s reducing pricing – to wholesalers.

The final pricing is left to partners and retailers, but they have incentives to empty shelves, even if they disguise it as a deal. Either way, the trend is down, with some cards showing for MSRP after demanding 2-3x their price on eBay.

Huang said current-gen GPUs will “be placed on top” of “exciting next-gen” chips. “We hear that GPU supply is in low supply in the cloud,” he said. Nvidia may have other options besides low-balling its GPUs.

Secondly, CFO Collette Kress said Nvidia may have a different plan to boost gaming income. She said Nvidia plans to reach a new market segment with its gaming technology.

Who knows? AMD is powering a new generation of high-performance mobile gaming PCs, years after Nvidia abandoned the notion (though it did become the Nintendo Switch). Maybe since my previous Verge post was on a handheld console. I don’t know if it’s a gaming-focused metaverse.

Nvidia emphasised during today’s Q2 2022 earnings call that gaming demand hasn’t gone off a cliff despite the unexpected reduction in revenue. GeForce sell-through is still up 70% since before the epidemic.

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