Current macroeconomic factors can fly in the face of growth in any market that might be considered discretionary spending but regardless, demand for high-end PC gaming appears strong. We only need to look at NVIDIA’s recent launch of the GeForce RTX 4090, a $1600 graphics card for hardcore gaming enthusiasts, creators and data scientists. To be honest, it’s impossible to analyze who exactly these gaming GPUs are being sold to, but demand seems to have been very strong so far with this launch.
The picture above says it all, really. Although this very high-end NVIDIA graphics card costs $1599, voracious PC enthusiasts and gamers lined up at retailers around the world during the first few days of availability, hoping to get in on the action. Here, too, there is an important distinction. Since NVIDIA was able to deliver a significant amount of cards for a day 1 global launch effort, we can deduce that there was at least a fair amount shipped out of the gate. The only question that remains is how NVIDIA’s restocking efforts may react, as many online and brick-and-mortar retail locations are currently showing out-of-stock status for GeForce RTX 4090 cards. There are still a few cards to be found from third-party partners, albeit at notably higher price points than NVIDIA’s GeForce RTX 4090 MSRP.
A source close to the company told me NVIDIA “Definitely had people standing in line before for GPUs, but for much lower-priced cards (pre-pandemic). And with the current economy that’s pretty remarkable.” We should temper this, again, with a pinch of salt of course, as availability indicators in the current months will be critical to watch. Continued sell-out flags could mean that NVIDIA is selling all the RTX 4090 GPUs it can build, or that it can’t keep up with demand. That said, if we go back to the company’s Q2 2023 earnings call back in August, NVIDIA CEO Jensen Huang commented that, “our sell-through is from the highs at the beginning of the year, but is still very solid. In fact, sales are up 70% since pre-COVID, pre-pandemic. And so it’s very clear that gaming, the fundamentals of gaming are strong, and this resource is really doing well. Not to mention that gaming platforms are used or gaming computers are used for influencers, people sharing content, creating content, VBloggers , VTubers, etc. There are all kinds of new ways to engage and spend time with video games.”
PC Gaming Demand And How NVIDIA’s Ada Will Rush To Meet It
Jensen’s observations sum things up nicely for the current market dynamic. Not only are gaming PCs with powerful graphics cards still experiencing solid demand, but the entire desktop computing platform has undergone a transformation of sorts in recent years, and even surged into the mainstream during the pandemic surge in demand for working from home. Modern gaming PCs are now not only great entertainment platforms for gaming, but they are also powerful media creation and sharing tools that more and more people from all walks of life are accessing and experiencing. And to me that broader market appeal should spell more consistent demand.
It will be interesting to see how NVIDIA’s numbers shake out in the company’s next earnings call, which it expects to take place on 11/16/2022, but the charismatic CEO, Huang, said as much in a recent investor day Q&A session at his GPU Technology. Conference (GTC) a few weeks ago. “We usually, and Ada will be no different, crawl from top to bottom. There the enthusiasts would like to see brand new products and the customers who refresh more often every two years would like to see their new products. It’s also the segment where we have to crawl for Omniverse and Omniverse workstations and servers… It was a sensible place for us to crawl first. And so, we’re going to ramp up Ada nicely starting a little bit this quarter, but mostly next quarter and very, very strongly leaving the year and going into the next year. So, that’s our current execution plan. But we’re in a really good place at the moment.”
I’m not betting much, but I think the combination of strong incentives to move remaining channel inventory from legacy products, coupled with strong demand for its latest Ada Lovelace-powered RTX 40 GPUs, could spell a brighter outlook in the near term , with a solid holiday shopping season through the end of the year on tap as well.