Nvidia’s newest PC graphics cards are struggling to attract sales like the earlier RTX 3000 series, according to the company’s latest earnings report.
Gaming revenue fell 46% year over year to $1.83 billion during fiscal Q4, which spanned November 2022 to the end of January. Nvidia's total earnings for the quarter, which include its data center business, reached $6.05 billion, down 21% from the year before.
During that same period, Nvidia began selling the RTX 4080 and then the RTX 4070 Ti desktop GPUs while ramping up sales for the RTX 4090. However, many consumers have complained that the company’s latest products are too expensive, costing from $799 up to $1,599 or more — or enough to buy a standalone PC.
This comes after Nvidia reported its gaming sales dropping 51% year over year in fiscal Q3. In an earnings call today, CFO Colette Kress attributed the ongoing slump to a “channel inventory correction,” where retailers and vendors are still trying to sell off existing product supplies due to low demand. Another factor has been COVID-19 hitting China, one of Nvidia’s largest markets.
However, Kress said the channel inventory correction is now largely behind the company. She also noted the RTX 4090 and RTX 4080 models were quick to sell out when they initially launched, saying gamers had responded “enthusiastically” to the products. But since then, the RTX 4000 series has generally been in stock across retailers.
That’s a huge contrast from over a year ago when demand from both consumers and cryptocurrency miners caused the RTX 3000 series to be out of stock for months. Despite the falling demand for consumer graphics cards, Nvidia remains bullish on its technology, citing the rise of AI-powered chatbots, such as ChatGPT, which rely on the company’s GPU hardware to train the AI model.
Still, Nvidia expects some financial pain in the next fiscal quarter, when the company’s total revenue is estimated to reach $6.5 billion, a 21% year-over-year dip.