Falling Cryptocurrencies Causes Drop in Profits for NVIDIA, Graphics Card Maker

As graphics cards drop in value, more gamers can get one on the market, but NVIDIA  lost money.


The fall in the cryptocurrency market also caused a drop in the profits of NVIDIA , manufacturer of graphics cards used to mine these virtual currencies.

In the announcement of preliminary results for the second quarter of this year, NVIDIA said it had generated 6.7 billion dollars, a figure higher than that of 2021, but less than the 8.1 billion dollars it forecast for this cycle.

Cryptos fall, profits fall

The graphics cards, although intended for PC gamers, found their boom during the pandemic because they can process the cryptographic loads of cryptocurrency networks such as Ethereum, causing users to set up large “farms” to obtain great rewards.

This caused a shortage of units in the market, with the miners being the only beneficiaries.

However, with the sharp decline in currency values, large mining systems have become unprofitable, causing them to auction off their graphics cards on the second-hand market. This also caused NVIDIA partners to have sold fewer new graphics cards .

“As we expect macroeconomic conditions affecting direct sales to continue, we have taken steps with our gaming partners to adjust channel pricing and inventory,” said NVIDIA CEO Jensen Huang. That means we may see more price drops for cards that have already been dropping in value in recent weeks.

The competition started to rise

Its direct competitor in the graphics card market, AMD , did get better numbers during the quarter with 1.7 billion dollars due to its supply of custom hardware for consoles such as the Xbox Series X|S and PS5.

NVIDIA ‘s small overall revenue increase, mind you, is due almost entirely to the company’s data center business, including machine learning applications. Supposedly, NVIDIA will release its next-gen RTX 4000 series GPUs later this year.