On the evening of September 20, the second GTC 2022 conference and keynote speech hosted by Nvidia went ahead as scheduled, as previously speculated, at this conference, Nvidia launched the latest GeForce RTX 40 series graphics cards, and the first to debut at this conference is the RTX 4090 and RTX 4080 16GB/12GB three positioning high-end graphics cards, the public version of the national price of 12,999 yuan, 9,199 yuan and 7,199 yuan, compared to the previous generation price has been significantly improved.
Huang and his RTX 4090 graphics card
For Nvidia, GeForce series graphics cards are an important part of its main business, and due to the impact of the previous cryptocurrency “mining” fever, Nvidia was once in the trillion dollar market cap club, but as the “mining” fever subsided, Nvidia’s earnings also declined. However, as the “mining” fever subsided, Nvidia’s earnings also declined, which led to a sharp drop in its share price. According to statistics, the company’s stock price has plunged 55% since the beginning of this year, is the U.S. stock market value of more than 100 billion U.S. dollars in technology stocks, the largest decline in the company.
Nvidia stock price trend
The financial results announced by Nvidia not long ago are proof that Nvidia is not having a good time at the moment. Data show that in the second quarter of the fiscal year 2023, its total revenue was $6.704 billion, up 3% year-on-year and down 19% sequentially; net profit was $656 million, down 72% year-on-year and down 59% sequentially; in this, the game business revenue was $2.04 billion, down 33% year-on-year and down 44% sequentially. The game business can be said to be the main reason for the decline in Nvidia’s revenue.
This time, after a gap of two years, Nvidia again released a new graphics card for the gaming end, on the one hand, can be seen as a regular upgrade to its product line, but also hope that through the release of the new series of graphics cards, the company to provide more revenue and profits, to lift the share price all the way down. So, can the debut of new graphics cards really save Nvidia’s stock price?
The new graphics card performance improvement is obvious
Although we can often see in a variety of bars, and forums, “the world suffered Nvidia long enough” remarks, it must be said that Nvidia in the field of graphics card technology accumulation is still at the top level. This release of the RTX 40 series graphics cards based on the newly designed Ada Lovelace GPU architecture to build, and the use of TSMC 4N process (upgraded version of the 5nm process) to replace the previous generation of the poor reputation of Samsung 8nm process, in performance, efficiency compared to the previous generation have achieved a significant increase.
Nvidia RTX 4090 graphics card
This new 40-series graphics card also comes with two new technologies – SER (Shader Execution Reordering) technology and the latest version of DLSS 3 (Deep Learning Super Sampling 3.0). SER technology can make an otherwise inefficient process more efficient by dynamically reordering the workload, and can even shader performance by up to 2x, or increase the in-game frame rate by 25%.
NVIDIA DLSS 3 technology
The DLSS 3 for the game frame rate improvement is even more obvious, the new Ada optical flow gas pedal can analyze two consecutive frames, capture the guide particles, lighting, reflections, shadows and other information not included in the game’s motion vector engine calculations, capture the direction and speed of these pixels moving between the two frames, so that an optical flow field can be calculated independently, and ultimately be able to predict the next frame image. The technology can significantly improve the graphics quality while reducing the GPU rendering load, which was also demonstrated by NVIDIA on the “Cyberpunk 2077” running with DLSS 3 technology on. Officials say it has a 4x performance boost compared to DLSS 2.
Comparison of game frame rates with and without DLSS 3 technology on
The new 40 Series graphics cards also feature 3rd generation RT Core and NVIDIA RTX Remix, both for real-time ray tracing and AI neural network rendering, the new graphics cards have been significantly improved. In terms of overall performance improvements, the new graphics cards can be said to continue the leapfrogging performance of recent generations.
Nvidia reputation has collapsed?
Although the new 40-series graphics card has a lot of improvements in in-game performance, many players with installed plans still do not buy. This is partly dissatisfaction with the significant price increase of the new graphics card, but more because of Nvidia’s previous series of operations, which greatly damaged its reputation among gamers.
In terms of price, the price of the new graphics card has increased considerably compared to the previous generation. Take NVIDIA’s own public version of the graphics card, for example, the flagship RTX 4090 official price of up to 12,999 yuan, compared to the previous generation RTX 3090 rose by 1,000 yuan. If the significant increase in performance can afford the less than 10% price increase, then Nvidia in RTX 4080 12GB and 16GB version of the price increase can be said to be very ungenerous.
RTX 4090 official price of $1599
As a replacement for the RTX 3080, the newly released RTX 4080 16GB is priced at a whopping $9,499, compared to the RTX 3080 at $5,499, almost doubling the price, even the RTX 4080 12GB costs $7,199, which is also much higher than $5,499. What makes many people more upset is that, according to the previous generation of the upgrade, it was thought to be the successor RTX 3070 RTX 4070 graphics card, but the face of RTX 4080 12GB, which most likely means that the RTX 4070 graphics card that will come on the scene after, and will not have the 2070 to 3070 upgrade so much performance improvement.
The main reason for the collapse of Nvidia’s reputation, or because of its inaction and even complicity in the prevalence of “mining”. As a result of the “mining” fever, the last generation of 30-series graphics cards released soon after the market is a card hard to find, even if you can find new graphics cards on the market, the price is generally much higher than the official retail price. This makes many players who want to set up a desktop computer suffer.
Netizen collation of the last two years Nvidia graphics card prices (Figure source Zhihu)
While many gamers are scratching their heads for a new graphics card, the computing power of the major virtual currency platforms is increasing. This clearly reflects the fact that many graphics cards are being shipped to major “mining houses” located around the world in the first place. As a graphics card manufacturer, Nvidia has not intervened in this serious disruption of the normal market order.
According to data provided by research firm Wedbush Securities, in the previous six quarters of the mining boom, Nvidia’s average revenue from mining cards was about $800 million per quarter, at least $4.8 billion over six quarters, or about RMB 33 billion. Such a high amount of revenue naturally does not allow Nvidia to have the motivation to sanction “mining” behavior. It was only after Nvidia saw that the “mining” industry was dying that it hurriedly launched a locking power graphics card in an attempt to win back gamers. But at this point, NVIDIA’s previous series of moves have triggered a spontaneous boycott by many players, which has also affected the sales of its graphics cards.
The “mining disaster” impact graphics card market
In addition to the spontaneous boycott of players, Nvidia also needs to face a grim fact, that is, the mining disaster triggered a large number of second-hand mining cards back, will inevitably cause a greater impact on the current fragile graphics card market.
As a result of the crackdown by many governments, the price of virtual currency represented by Bitcoin has plummeted in the past year, and the reduction in revenue has also affected the enthusiasm of the “miners”, many of whom have a significant amount of graphics cards have chosen to start liquidating their positions and leave the market, which makes the price of used graphics cards on the market has dropped a lot. Not long ago, Ether announced that it would shift from Proof of Work (PoW) to Proof of Stake (PoS) consensus mechanism, but also hit the graphics card mining hard, at least in Ether, graphics cards have been difficult to bring revenue.
Net rumors of current RTX 3070 mining card prices
After the announcement of the EtherChip merger not long ago, a large number of 30-series mining cards have also appeared on second-hand trading platforms today, while the price of an RTX 3070 mining card has even fallen below $1,500. In addition to the flood of low-cost used mining cards on the market. The current graphics card market “bad money drives out good money” phenomenon is also becoming more and more prominent. As there are too many 30 series graphics cards in the “mining field”, there are even manufacturers who will be used mining card processing in accordance with the new card sales. Therefore, in the eyes of many people, the current circulation of 30 series graphics cards on the market, all according to the mining card, seriously affects the desire to buy graphics cards, but also makes even the new 30 series graphics cards, in the market is also difficult to sell. This has caused a large inventory backlog for Nvidia and other graphics card manufacturers, which is the main reason why Nvidia has recently repeatedly said that it wants to reduce prices to clear inventory.
PC market decay has appeared
As a result of the continued high price of graphics cards, the global computer market has a strange phenomenon: only the price of the desktop computer host, it has exceeded the laptop. This makes the pursuit of cost-effective desktop DIY market, there is almost no competitiveness, many users who had hoped to assemble a desktop to play the game finally chose the cheaper price of the game book. And in the case of online classes, online office and other increasingly popular, the PC market ushered in a long-awaited boom.
But the good times are not long, with the global epidemic prevention and control gradually into normalization, coupled with the global digital market began to fall into shrinkage, the first two years of the welcome return of the PC market in 2022 also began to stagnate. Many computer manufacturers and research institutions have more than once downward adjustment of the global PC shipments this year.
According to IDC’s latest report, it expects global shipments of traditional PCs to fall 12.8% to 305.3 million units in 2022. And with the decline in notebook sales, the core components of notebook companies naturally bear the brunt. Including CPU providers Intel, AMD and memory providers Samsung, Hynix and other companies, performance are affected by the decline in sales of the PC market. As one of the PC graphics card providers, Nvidia naturally can not escape.
IDC’s PC market forecast for the next few years
Although notebook computers equipped with NVIDIA’s unique graphics account for only a small part of the notebook market, but because of its large base, NVIDIA’s mobile graphics cards are also an important way to ship its graphics cards, and considering the current desktop graphics cards are worse, the importance of the mobile side naturally speaks for itself. And the general environment of the PC market’s declining performance, but also become another problem that NVIDIA needs to face.
Written in the end
Overall, although the Nvidia 40 series graphics cards have a significant upgrade in performance, but their own previous “mining” behavior condones a series of “trolling” and excessive price, it is still difficult to get consumer recognition of the new graphics cards. In addition, the three announced 40 series graphics cards are mainly positioned high-end, while the real gamer’s mainstream choice of 4060 and other graphics cards, but also because of well-known reasons chose to delay the release.
The launch of this new graphics card is not a strong medicine for the current Nvidia share price. This is also reflected to the capital market as it is. Although it released the new graphics card yesterday, its share price did not rise, and even fell by 1.54%. Therefore, Nvidia really wants to regain the confidence of the market, in addition to progress in technology, in how to make up for the previous “mining” and collapse of the reputation, but also needs to come up with more sincerity in the other 40 series of graphics cards after.