Nvidia has published its quarterly figures and admitted that it has produced too much – are the prices falling now?
Nvidia has produced too many GPUs – are prices falling now?
The PC market is currently experiencing quite a slump. Manufacturers like Nvidia didn’t see this market slowdown coming and are now in an uncomfortable position because they simply produced too much. In Nvidia’s case, these are GPUs, as The Verge also reports.
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What is an annoying situation for Nvidia and its investors with the current quarterly results are exciting times for gamers. Because Nvidia is now trying to get the best out of the situation for the company and investors – gamers can only benefit from it.
There will be some discounts on RTX 3000 products for customers
The first attempt to counteract the market decline will be discounts, as confirmed by Nvidia CEO Jensen Huang:
“We have excess inventory”
“Our strategy is to sell well below the current sell-through level in the market to give distribution an opportunity to correct.”
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“We have implemented programs with our partners to price position products in distribution to prepare for the next generation,”
he said on the conference call.
This speaks in favor of selling the current graphics cards and chips from the RTX 3000 series much cheaper in order to sell as many as possible before the cards of the new RTX 4000 series reach the market. Since this primarily means sales, it will take some time before the lower prices reach the end customer. But since retailers are also interested in clearing their shelves, prices will sooner or later tumble.
Further plans to secure the sale
In addition to the exciting prospects for discounts for end customers, Nvidia also has other plans to boost sales. In addition, one would like to convey to customers that players with cards from the current RTX 3000 series are well prepared for the future and would like to boost their marketing accordingly. And there is still room for current Nvidia cards in the cloud area:
“We’ve heard GPU supply is tight in the cloud”
, said Huang. So Nvidia might have other options other than reducing inventories of its GPUs through low prices.
Nvidia CFO Collette Kress also hinted that Nvidia may have something else in mind to improve its earnings. Nvidia have
“a new market segment that we want to reach with our gaming technology”,
she said during the conference call. Which channel from the gaming area that should be, however, remains open.
However, Nvidia has repeatedly stressed during its Q2 earnings release that gaming demand hasn’t slumped despite the sudden drop in sales, noting that Geforce sales are still 70 percent higher than before the pandemic.