In February, when the prices of cryptocurrencies were rising, Nvidia released new processors specifically for mining crypto. They can’t power a computer monitor, but they can make valuable Aether Coins.
On Wednesday, the company announced an update on how cryptocurrency (CMP) is performing in the market. The company had sales of $ 155 million from CMP cards for the first quarter of its fiscal year ended May 2 and expected sales of $ 400 million for the current quarter – impressive numbers for a brand new line of products.
Jensen Huang, CEO of Nvidia, talks about the new line of products not as an exciting frontier for the company, but as a bone exposed to cryptocurrency obsessives to protect gamblers. As it turns out, gaming processors – the original and core business of Nvidia – are still the most important. They have sales of $ 2.76 billion, an increase of 106% over the previous year.
The reason Nvidia is now looking at crypto chips is to save gamers from having to supply graphics processors or GPUs, Huang explained. While GPUs can be used for mining, the CMP chips cannot be used for gaming, and it is easier for Nvidia to make the CMP chips.
The CEO says its core gaming market is the largest it has ever been and he can’t risk missing out as crypto miners keep buying cards for gamers.
“We hope that the CMPs will keep the miners happy and stay in the professional mines” and that the product will “protect the graphics card supply for gamers,” Huang said when he called analysts.
“The games industry is really big, and what’s really exciting, beyond that, is that gaming is no longer just gaming. It’s being poured into sports, esports. It’s poured into art. It’s poured into social networks. And so gaming has such a it’s the greatest form of entertainment and I think the experience we’re going to have is going to be a while, “said Jensen.
Finding one of the new GeForce RTX 30 graphics cards from Nvidia is not easy.
The cards sell for just $ 399 and cost up to $ 1,499, depending on the configuration. However, consumers rarely find them online at these prices.
Due to the low supply and high demand, they fly off the shelves when they are in stock, and when they don’t, buyers from a reseller pay a high premium – sometimes more than double the list price.
The huge demand for GeForce graphics cards was the main reason Nvidia sales rose 84% to $ 5.66 billion in the first quarter, exceeding both Wall Street and the company’s expectations.
Who is buying these cards?
It is possible that there is simply a massive demand for PC games, accelerated in part due to the Covid-19 pandemic, as well as a global shortage of microchip manufacturing capacity.
But it’s also possible that these cards could be bought by cryptocurrency miners who can convert the problem-solving capacity of a graphics card into significant amounts of ether, a cryptocurrency that has hit several all-time highs this year.
Nvidia is not sure. CFO Colette Kress said it was “difficult to determine how much” cryptocurrency miners have contributed to its gaming division.
But it wants to unravel the question. Nvidia is starting to add software to its gaming cards to make mining more difficult.
Over the past five years, Nvidia’s inventory has grown by more than 1,200%. This is backed by the company’s expertise in graphics processors, originally intended for gaming, but now at the center of some of the most exciting areas of technology.
As Nvidia first commercialized the GPU, investors flocked to the stock, hoping Nvidia would sell these chips to self-driving automakers, cloud computing providers (especially for artificial intelligence applications) and, most recently, cryptocurrency miners.
Neither of these companies has really been blown up. Nvidia still has an auto business, but it declined 1% and made just $ 154 million – less than sales of CMP cards in the first quarter alone. Data center business revenue grew 79%, but much of that came from an acquisition last year.
Meanwhile, Nvidia insists that there is still a huge demand from gamers that won’t end anytime soon. One look at social media threads about new graphics card sales shows that many gamers are frustrated that they can’t get one. Nvidia’s 30-series cards are a bigger upgrade than most years with new technologies like ray tracing, and Nvidia is at the beginning of its cycle.