I’ve written intermittently about the plunge in Bitcoin, one of the biggest asset bubbles in history, in the last several months. Another sign of troubled times ahead for people who bought into the bitcoin craze near the top is the pronouncement from graphics card maker Nvidia Corp that they expect sales to cryptocurrency miners to slow down and to have to rely more on their old gaming mainstay:
Too many cryptocurrency clients and fewer cloud computing orders than expected underwhelmed Nvidia Corp (NVDA.O) investors on Thursday, although the graphics chip maker said a supply shortage that hit its core video game audience had eased.
The U.S. company best known for chips that enhance video game graphics has diversified into an array of businesses including artificial intelligence, self-driving cars and digital mining, but investors are most concerned with its inroads in the market for cloud computing.
Chief Financial Officer Colette Kress said that the company expects cryptocurrency-related revenue to fall 65 percent to about $100 million in the next quarter. Retail prices for Nvidia’s gaming chips surged earlier this year as miners snapped up chips, a development Nvidia addressed by releasing mining-specific chips.
“While supply was tight earlier in the quarter, the situation is now easing,” Kress told investors on a conference call. “Gamers who had been priced out of the market last quarter” were able to get their hands on new chips a reasonable price, she said.
“At the core of it, gaming is strong,” Chief Executive Jensen Huang told investors on the conference call. “The pent-up demand is quite significant and I’m expecting the gamers to be able to buy new GeForces pretty soon.”
Nvidia has long been the premier designer and manufacturer of graphics cards for gaming desktop and laptop computers, and their high end graphics cards are always in demand for enthusiasts who want to push the quality of the graphics they can get to the limit.
Unfortunately for gamers, the video cards are also crucial tools for cryptocurrency miners, and when the crypto craze really took off last year, bitcoin miners overwhelmed the existing supply and caused massive price inflation. Gamers were often unable to buy video cards, and when they could they had to pay exorbitant prices.
Now it seems like the bitcoin crash will give PC gamers some relief.