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
Discussion (7 replies)
Join Discussion →Do they think people are retarded? As if we don't remember them shipping 10's of thousands of die packages directly to chinese mining farms? The shipping containers full of cards headed directly to mining farms?
That company is a joke.
I literally laughed at this.. Nvidia should be SHARPLY fined for that idiotic statement. And if I were a voting board member I would be IMMEDIATELY pushing to have that CFO fired parachute or not and someone FAR more competent put in their place.
That is LITERALLY an ostrich maneuver on part of that CFO. *Jams head up ass of CEO* "No there is NO WAY we could have predicted this... btw we are gonna get fined again."
Anything to shore up the share price.
I literally started this piece when I had heard some brief news about Jensen hinting that the 40-series would be launching soon during the call and it was going to be a kind of fluff, here we are and what's coming kind of thing, but when I read deeper into the pr pieces they posted my jaw dropped.
Just be freaking honest.
"Like before when cryptocurrency values spike and the capability to mine these currencies runs well on our product to where it is profitable to do so. Businesses buy our product in bulk as long as the ROI makes sense to them. We leveraged this demand by increasing prices as much as we thought the demand could bare and moving through as much product as possible to attempt to satisfy this longer than expected spike in demand. In addition consumer demand was at an sustained high with many having increased capital to spend on our product. The entire market took action to gain maximum profit during this time. Now that spike is receding and in an effort to recoup costs those that bought our cards en mass for mining are now selling to the consumer market. We have a new product on the horizon. And have ramped down our production due to reduced demand but still have excess new inventory in the market competing with the used market. We expect shrinkage year over year growth with a likely contraction.
While we are excited for our next product stack we are aware that the demand spike does not exist at this time so expect sell through to the Market to be lower as well as negative sentiment of our individual consumer base to further slow sales.
To combat this in the future we are instituting a bulk lease program for those that need more than 10 of our cards at once. This will allow us to meet the demand during a mining spike, spread out of pocket costs over a longer period of time for our bulk users. As well as have a lever to more properly control the secondary market to better predict and drive sale through of our individual consumer base that we value.
I bet the entire NV corporate site is completely illuminated by gas lighting.
Yeah, but it was like a legal two-step. Maybe we knew mining was responsible for our sales, maybe we didn't. Maybe it'll happen again, maybe it won't. I'm guessing someone in the company is hoping for something to replace ETH and trigger another buyout swath for the next gen but just in case they want to assure investors they got them covered.
The part about them saying they expected cryptocurrency to make a diminishing contribution to gaming demand is a slap in the face for gamers. Pretty sure none of the gaming market saw it as a positive contribution and it seems peculiar to even connect the two outside of NFT references. I guess all those giant mining farms were really LAN parties in disguise.