NVIDIA's CFO, Colette Kress, highlighted some important aspects of their gaming business including the existing channel inventory and their recent GeForce RTX 4090 / 4080 launch.
NVIDIA Reports Strong Sales For GeForce RTX 4090 'Ada' Graphics Cards, Channel Inventory Stabilizing
Colette Kress, NVIDIA's Chief Financial Officer, stated that they have been under-shipping GPUs in the gaming segment for some time. This was revealed during the Credit Suisse 26th Annual Tech conference. We know that the market was recently flooded with an over-excess of used GPUs due to the crypto craze coming to an end and with prices falling down on last-gen GPUs, both in retail and used markets, there was little to no demand for any more GPUs. With that said, NVIDIA is now starting to refresh its older RTX 30 GPUs with new offerings and resuming shipments to stabilize its channel inventory and backlog.
The company expects that their channel inventory would be back to normal by the end of Q4 and they will resume shipments starting 1H 2023. The company also anticipates building up its channel for the Ada launch and all the additional Ada-based GPUs (Desktops/Workstations/Laptops) coming to the market.
So we have been under-shipping. We have been under-shipping gaming at this time so that we can correct that inventory that is out in the channel.
And as we discussed, we plan, hopefully, by the end of Q4, as we approach the end of Q4, that we will be in a solid position to that. That means as we move forward, we will start to get back up. We'll get to some point of an equilibrium between sell-through and sell-in. And then we will likely get to where we'll be selling in to build the channel for our Ada launch and all of the additional Ada products that we will see coming to market.
Colette Kress, NVIDIA Chief Financial Officer
Kress also reports that NVIDIA's GeForce RTX 4090 and RTX 4080 are still in their early days. We know from our previous reports that NVIDIA had shipped around 160,000 RTX 40 series graphics cards since the mid of November. This number might be higher now but we also know that bulk of the shipments includes the GeForce RTX 4090 graphics card which has been the highlight launch of the Ada family so far. The NVIDIA GeForce RTX 4080 on the other hand hasn't seen as much of a response as the RTX 4090 owing to its poor performance to dollar value. Even scalpers who got the cards and tried to sell them at absurd prices are resorting to selling them at the MSRP since no one is interested in them.
Ada is just in the early days right now of shipping. We have shipped, one of our very high-end cards are 4090 and our 4080 is just now starting to sell as well.
Colette Kress, NVIDIA Chief Financial Officer
It is also pointed out that NVIDIA's GeForce RTX 4090, despite being the flagship with a starting price of $1599 US, sold out within 2 weeks. We know that NVIDIA initially shipped 100,000 cards (GeForce RTX 4090) so that's very impressive if the chipmaker managed to sell the entirety of its stock in under 2 weeks.
Our Ada launch, 4090 when it came out, yes, it was only the very first card and the high-end card, it's sold out in 2 weeks. So we're very pleased to see something that was a nod for us, that we knew that gaming, no matter what time of year, no matter what the situation is still a very important entertainment industry.
Colette Kress, NVIDIA Chief Financial Officer
NVIDIA has also pointed out their popularity by including numbers from Steam's hardware survey. The company states that the top 15 cards on the SHS are from NVIDIA. The GTX 1650 recently took up the top spot with a 6.27% market share, followed by the GTX 1060 at 5.77% market share & the RTX 2060 taking up the 3rd spot as the only 'RTX' graphics card with a 4.64% market share. Neither the RTX 4090 nor RTX 4080 have so far shown up in the Steam Hardware Survey but they should be starting to take up some share by Q1 2023.
We did see some great new gamers joining that market and taking advantage of the leadership that we have in terms of gaming. Not only is Ada a leader in the industry, so as Ampere. So number 1 and number 2 top architectures are NVIDIA. We continue to watch what we see in terms of Steam. Steam has still a record level of gamers online, gaming. And the top 15 cards on Steam are NVIDIA, all 15 out of 15. So this is an area that gamers will be gamers for life. And we watch this industry both at the great times and also during some of the hard times. It is a sport that is economical because you can choose many different form factors at many different price points for the gaming that you want to do.
Colette Kress, NVIDIA Chief Financial Officer
NVIDIA is expected to introduce more mainstream GeForce RTX 40 series graphics cards in the first half of 2023. The company recently scored big-time in the latest discrete GPU market share report, claiming up to 88% market share according to the JPR report. We can expect this trend to continue in the coming quarters till NVIDIA and AMD enter the mid-range segment where the majority of the market share comes from.
