Nvidia has observed that stock levels of its RTX 3000 graphics cards are almost back to normal now, but then hinted that while supply will remain strong enough going forward, demand is set to fall off as next-gen Lovelace GPUs hove into view.
This comes from Seeking Alpha (opens in new tab) which published an earnings conference call (spotted by PC Gamer (opens in new tab)) for Nvidia’s fiscal Q1 2023 (the quarter running up to May 1), featuring CEO Jensen Huang and Chief Financial Officer Colette Kress.
Kress made some very interesting comments, including that: “Channel inventory has nearly normalized and we expect it to remain around these levels in Q2.”
In other words, stock levels of Nvidia’s current line-up are almost back to where they are normally, and we’ve been seeing evidence of that recently with prices starting to get back to MSRPs as well.
The CFO further observed: “As we expect some ongoing impact as we prepare for a new architectural transition later in the year, we are projecting Gaming revenue to decline sequentially in Q2.”
What does that mean precisely? Well, the ‘new architectural transition’ refers to the launch of RTX 4000 GPUs, so Kress seems to be suggesting that current-gen (Ampere) GPU sales are going to drop in Q2 due to the impact of those next-gen Lovelace products.
Analysis: GPU buyers may soon want to play a waiting game
This appears to be a heavy hint that Nvidia is indeed going to do what the rumor mill has been speculating about recently, and launch RTX 4000 graphics cards pretty soon.
Remember that the fiscal Q2 Kress is referring to is the period that runs from May through to the start of August. Now, one prolific hardware leaker has recently floated the idea that Nvidia could launch Lovelace in July, which is the final month of fiscal Q2, and if this were the case, with Team Green running an initial reveal of RTX 4000 GPUs at that point, sales of RTX 3000 products would no doubt be affected.
In short, hyping next-gen is going to depress current-gen sales, in theory. Everyone’s eyes will be on Lovelace and its purported major performance improvements, so who’s going to want to buy an RTX 3000 GPU with the new models just around the corner? (One theory is a mid-July unveiling for Lovelace, with GPUs starting to go on sale from September).
So, it’s easy to read into the CFO’s statement and see it as a fairly strong signal that an RTX 4000 launch may not be far away, to begin having an ‘ongoing impact’ in terms of current GPU sales declining as fiscal Q2 rumbles on.
The caveat here, mind, is that we’re not sure exactly what Nvidia might be springing on us to begin with in terms of the initial Lovelace launch. There are rumors that it might just be the RTX 4090 which turns up initially, with a longer wait for less exorbitantly priced cards (the RTX 4070 may not arrive until November, if the grapevine is right – but huge pinches of salt with all this, of course).
At any rate, what we might be able to look forward to is RTX 3000 pricing dropping below recommended levels – maybe even considerably below, if retailers feel the need to stoke interest in the cards due to falling demand. Here’s hoping…
Oh, a final thing to note – Kress also let us know that almost a third of GeForce GPU owners out there have an RTX graphics card now, so the number of gamers dabbling with Nvidia’s take on hardware accelerated ray tracing is certainly growing, as you might expect.