On Wednesday, the company provided an update on the evolution of its cryptocurrency cards (CMP) in the market. It recorded $ 155 million in revenue from CMP cards in its first fiscal quarter, which ended May 2, and forecast sales of $ 400 million in the current quarter – impressive numbers for a whole new range of products.
But Nvidia CEO Jensen Huang talks about the new product line not as an exciting frontier for the company, but as a bone thrown at cryptocurrency obsessives to protect gamers. It turns out that game processors – Nvidia’s original and core business – remains its biggest business, generating $ 2.76 billion in revenue, a 106% increase from last year.
The reason Nvidia is now moving into crypto chips is to save graphics processor (GPU) supply for gamers, Huang explained. While GPUs can be used for mining, CMP chips cannot be used for gaming and it is easier for Nvidia to manufacture CMP chips.
The CEO says his core gaming market is the biggest it’s ever been and he can’t risk missing out because crypto miners keep buying cards for gamers.
“What we hope is that CMPs satisfy miners and stay in professional mines” and that the product “protects” the supply of graphics cards for gamers, Huang said on a call with analysts. .
“The gaming industry is really big, and what’s really exciting on top of that is that gaming isn’t just a game anymore. It’s infused into sports, esports. It is infused into art. It’s infused into the social and therefore gambling has It’s the greatest form of entertainment and I think the experience we’re having is going to last for a while, ”Jensen said.
Hard to find
Cards sell for as low as $ 399 and go as high as $ 1,499, depending on configuration, but consumers rarely find one online at these prices.
Insufficient supply and high demand mean they fly off the shelves when they’re in stock, and when they’re not, buyers pay a hefty premium – sometimes more than double the list price – at a retailer. .
Huge demand for GeForce graphics cards was the main reason Nvidia’s sales soared in the first quarter, rising 84% to $ 5.66 billion, beating expectations on both Wall Street and the company.
Who buys these cards?
It is possible that there is simply a massive demand for PC games, partially accelerated due to the Covid-19 pandemic, as well as a global shortage of microchip manufacturing capacity.
But it’s also possible that these cards are bought by cryptocurrency miners, who can turn a graphics card’s problem-solving ability into significant amounts of Ether, a cryptocurrency that has reached several highs this year. .
Nvidia is not sure. CFO Colette Kress said it was “difficult to determine how much” cryptocurrency miners have contributed to her gaming division.
But he wants to unravel the issue. Nvidia is starting to add software to its game cards to make mining more difficult.
Over the past five years, Nvidia’s stock has grown by more than 1,200%, bolstered by the company’s expertise in graphics processors, which were originally intended for gaming but are now at the heart of some of the games. most exciting areas of technology.
Because Nvidia first brought the GPU to market, investors flocked to the action in hopes of seeing Nvidia sell these chips to autonomous automakers, cloud providers (especially for artificial intelligence applications). ) and, more recently, cryptocurrency miners.
None of these companies really exploded. Nvidia still has an automotive business, but it was down 1% and generated just $ 154 million – less than CMP card revenue in the first quarter alone. Sales of its data center business grew 79%, but much of that figure came from an acquisition last year.
Meanwhile, Nvidia insists it still sees huge demand from gamers that isn’t going to end anytime soon. A glance at the discussion threads about sales of new graphics cards on social media reveals many gamers frustrated at not being able to get one. Nvidia’s 30 Series cards are a bigger upgrade than most years, with new tech like ray tracing, and Nvidia is at the start of its cycle.