The NVIDIA CFO has said that the company had limited visibility of the impact of cryptomining on GPU demand in its Q2 FY2023 report. The statement comes as much of the crypto market has seen drastic drops throughout 2022 and as the Ethereum blockchain prepares to enter its next phase as proof of stake called The Merge or Ethereum 2.0.
Our GPUs are capable of cryptocurrency mining, though we have limited visibility into how much this impacts our overall GPU demand. Volatility in the cryptocurrency market – such as declines in cryptocurrency prices or changes in method of verifying transactions, including proof of work or proof of stake – has in the past impacted, and can in the future impact, demand for our products and our ability to accurately estimate it. As noted last quarter, we had expected cryptocurrency mining to make a diminishing contribution to Gaming demand. We are unable to accurately quantify the extent to which reduced cryptocurrency mining contributed to the decline in Gaming demand.
NVIDIA saw epically record-breaking sales with its Ampere GPU launch. Inventory was consistently sold out around the globe while cryptocurrency reached all-time highs. During this time consumer graphics card prices, from MSRP to AIBs and resellers, soared to never before seen levels as demand greatly exceeded supply. In May 2022 NVIDIA was fined by the SEC for failing to disclose how many gaming GPUs it had sold for cryptomining in its FY18 reports.
However, as the crypto market cooled so did the demand for GPUs. With miners presumably largely out of the equation, demand is now back in the hands of gamers and a press release for its Q2 FY2023 financial results states that second-quarter gaming revenue sales revenue is “down 33% from a year ago and down 44% from the previous quarter.”
The NVIDIA CFO has said that operating expense growth has been slowed and investment balancing measures are in place for long-term revenue growth. Gaming and Profesional Visualization revenue is expected to further decline during NVIDIA’s Q3 FY2023 as the market corrects and partners prepare for the forthcoming launch of the NVIDIA GeForce RTX 40-series graphics cards.
Source: NVIDIA