NVIDIA confirms GPU market crisis

The GPU market has experienced a significant decline in recent years and seems far from returning to normal shortly. It is in a significant crisis.

NVIDIA, for its part, has confirmed that it is in the midst of a crisis. In its latest financial results for 2023, the company reported a 46% decline in profits compared to 2022, indicating a significant change in the industry.

GPU market crisis

NVIDIA’s 2023 financial results were not positive news for the company. The company reported a 46% drop in profits compared to 2022, and its revenue also suffered a 9% decline. This is in stark contrast to the previous year when the company reported a 62% increase in revenue and a 34% increase in profit.

Last quarter they achieved profits of $1.83 billion, down 46% from last year but up 16% from the third quarter of fiscal 2023, from August to October. Gaming should include all GeForce graphics and part of the profit from Nintendo Switch sales (remember that Nintendo’s console carries NVIDIA graphics).

The decline in profits and revenues is attributed to the post-Pandemic crisis, which has decreased demand for computer equipment. In addition, the company’s products are facing increased competition from other companies such as AMD and Intel.

However, according to NVIDIA:

“The gaming industry is recovering from the post-Pandemic recession, and gamers are enthusiastically embracing the new Ada Lovelace architecture GPUs.”

This means they seem to be happy with the initial sales of the RTX 40 series since its launch at the end of the previous quarter. In addition, their financial results have started to show in this most recent quarter.

In the gaming industry, AMD is quite competitive.

The green brand is still in the lead in sales, but Lisa Su’s brand has come very close in net profits if we compare NVIDIA’s results with those of AMD, its main rival in this sector.

As we have said, NVIDIA’s gaming results were $1.83 billion while AMD’s were only 7% less with profits of $1.644 billion; although we have to take into account that AMD’s PC gaming graphics and part of the profits from PS5, PS4, Xbox Series X/S and Xbox One have to be added.

It is a competitive industry, plus the GPU market has many players, increasing the pressure on NVIDIA’s market share and profits.

Moreover, the significant drop last quarter and the slight recovery at the end of the fiscal year are consistent with GPU shipment data in the Chinese market.

Header: NVIDIA