Gaming is big business at Nvidia right now, with its most recent financial quarter closing at a record $5.66 billion high mostly due to its GeForce GPU sales. Demand (partially driven by mining) for the cards has been so high that it continually outstrips supply, even with Nvidia amping up production this quarter. While that's a sign that there's even more money to be made here in future quarters, Nvidia said in a recent earnings call that it expects to continue facing supply issues into the second half of the year. Still, the company's working to push out even more cards, plus to stop gamers and crypto miners from eating into each other's supplies with separate gaming and mining GPU SKUs.
Let's talk numbers. Nvidia's first quarter for the 2022 financial year ended on May 2, and its $5.66 billion revenue pull was up 84% from the same quarter a year ago and was over $1 billion above Wall Street estimates. Gaming GPUs accounted for $2.76 billion of that number, making them the main source of the company's revenue for the quarter. That makes sense, as Nvidia spent much of early 2021 ramping up production of its high-end GeForce RTX 30-series GPUs, plus launching performance-mainstream GeForce RTX 3060/RTX 3060 Ti boards. That helped the company considerably increase its GPU sales both sequentially (by 10%) and year-over-year (by 106%).
Nvidia admitted in an earnings call yesterday that many of its gaming GPUs did end up at Ethereum mining farms, but did not estimate the share of its graphics processors that were bought by miners. It also promised that it's "taken action" to help crypto miners not eat up all gaming GPU stock.
"We believe gaming also benefited from crypto mining demand, although it's hard to determine to what extent," said Colette Kress, Nvidia's chief financial officer, during the company's conference call with analysts and investors, according to SeekingAlpha. "We've taken actions to optimize GeForce GPUs for gamers, while separately addressing mining demand with Cryptocurrency Mining Processors, or CMPs."
CMP GPUs are cheaper and easier to produce than gaming or professional GPUs, since Nvidia does not have to test all of their capabilities, such as texture units, render back ends, video encoders/decoders, and display outputs. To some degree, this allows Nvidia and its production, testing, and packaging partners to redirect resources towards other products, such as GeForce. This could help increase supply for both groups, easing the urge for the gaming and crypto markets to cannibalize each other.
Still, while having more GPUs in production and more resources available is a good sign for gamers currently contending with the overpriced graphics card market, Nvidia does not expect shortages of graphics boards to end in the near future, both due to constraints and because of high demand.
"We expect to remain supply constrained into the second half of the year," said Kress. "We absolutely have the strength and overall demand to grow. [We expect] continued growth from Q1 to Q2 as we are working hard to provide more supply for the strong demand that we see."
Sales of Nvidia's datacenter hardware (which includes datacenter GPUs) also thrived this quarter, totaling $2.048 billion, a 79% increase from Q1 FY2020. Nvidia's earnings from its ProViz, automotive, OEM (i.e., cheap discrete GPUs sold to PC makers), and dedicated Crypto Currency hardware businesses were also up considerably from the first quarter of 2020. Earlier, Nvidia predicted that its CMP revenue would total $150 million in Q1 FY2022.
