Nvidia lowers forecasts – sales of Geforce RTX series worse than expected

The graphics card market belongs to Nvidia, at least in the higher segments where AMD has had a hard time asserting itself since the launch of the Pascal and GTX 1000 series in May 2016. Despite its special position, Nvidia now goes out and warns of a much worse quarter than expected – and it with message.

For the fourth quarter (November – January) of the company’s broken fiscal year, Nvidia lowers its revenue forecast from $ 2.7 billion to $ 2.2 billion. This is an unusually large adjustment, where a few percent up or down is normally considered to be of great importance, and which caused the share to plummet by 14 percent.

In Datacenter, revenue also came in short of expectations. A number of deals in the company’s forecast did not close in the last month of the quarter as customers shifted to a more cautious approach.

One of the reasons is lower income than calculated in the category Datacenter, which includes the Tesla plug-in cards. Nvidia says that several large deals did not close during the quarter, as a result of customers becoming increasingly cautious in their purchases. Among the factors that create uncertainty is the trade war between the United States and China, but also that there are increasing indications that the world is heading for a new recession.

However, deteriorating macroeconomic conditions, particularly in China, impacted consumer demand for NVIDIA gaming GPUs. In addition, sales of certain high-end GPUs using NVIDIA’s new Turing™ architecture were lower than expected.

Sales of Geforce graphics cards also do not reach Nvidia’s original forecasts, and even here the ongoing trade war between the United States and China is mentioned. In addition, Nvidia admits for the first time that demand for the latest Turing architecture and associated graphics cards has been worse than expected.

These products deliver a revolutionary leap in performance and innovation with real-time ray tracing and AI, but some customers may have delayed their purchase while waiting for lower price points and further demonstrations of RTX technology in actual games.

More surprising than the fact that the Turing and Geforce RTX series sold worse than expected is that Nvidia acknowledges that prices may have been set too high. In the press release to investors, the company speculates that consumers are waiting with the purchase of graphics cards in the new series, waiting for lower prices.

Same price for identical performance as Pascal graphics cards

The fact that demand for the Geforce RTX series is low is noticeable not least among SweClocker’s members, who are otherwise quick to buy new graphics cards. The tone in the community is often that the price is too high, but also that the new graphics cards do not offer any actual news that is relevant today.

When Nvidia unveiled the architecture Turing, they hit the big drum for the opportunity to run games with ray tracing in real time – something that for decades has been seen as the holy grail in computer graphics. Strangely enough, the graphics cards were launched before there were games on the market in support of finesse and when one (1) game title came, the performance did not convince.

► Test: Ray tracing i Battlefield V efter prestandauppdatering

When it comes to traditional rasterization, the architecture has a number of innovations to provide better performance, but Nvidia’s pricing meant that the Geforce RTX series gave the same price in relation to performance as the previous GTX series. The exception to this was the top model Geforce RTX 2080 Ti, which raised the performance bar, but also rose significantly in price and costs from SEK 14,000 and up.

The consequence of this has been that many have not seen any point in buying up the Geforce RTX series, with the exception of the RTX 2080 Ti, which, however, is in a price range that is out of reach for a large part of the market. A trend on the forum has been to completely ignore Turing and instead buy one of the older graphics cards in the GTX 1000 series.

Jensen Huang: Nvidia is still grounded

Despite the revenue warning, Nvidia’s CEO Jensen Huang urges calm and believes that the company is on a firmer footing than ever before. At the same time, he points out that Nvidia operates in large and ever-growing markets; gaming, design, data centers, artificial intelligence (AI) and self-driving cars.

Nvidia presents the quarterly report on February 14.