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Nvidia gaming GPUs now make just a sixth of the company’s revenue

With data center revenue continuing to take over at Nvidia, graphics cards have become less of a money maker for the company.

nvidia q4 fy 2024 earning report ai hits gaming gpus

The latest Nvidia earnings report is out and it shows the company is continuing to become less of a graphics card maker. and more of a maker of chips for data centers, at least when it comes to overall revenue. Revenue from gaming now makes up just one sixth (12%) of the company’s total earnings, down from 28% the previous year.

As the maker of the single best graphics card in the world, and plenty of other top tier GPUs too – such as the recently released RTX 4070 Super, the gaming GPU industry has long relied on Nvidia to drive it forward. However, the sheer amount of money it’s earning from other areas has the potential to push the company away from focusing on producing the graphics cards we all use for gaming.

Looking in more detail, the fourth quarter financial year report (Q4 FY 2024) shows the company earned $24B in the last three months but only $2.8B of that came from its gaming division. For the same period last year, the company earned just $1.9B from gaming – so that’s still a solid 56% increase – but it pales in comparison to the 409% increase in data center revenue, which rose from just $3.62B to $18.4B.

Much of that data center increase is based on AI chips such as the Nvidia H100. At a cost of around $30,000 a piece, these monster AI-processing GPUs (yes, they’re effectively still GPUs) house 14,592 CUDA cores, 80GB of HBM3 capacity, and use a colossal 5,120-bit memory bus. And if you think that sky-high price is all just Nvidia gouging money out of business customers… well, there’s certainly a profit margin there, but estimates of the raw cost of manufacturing these chips, by analyst Raymond James, puts them at costing Nvidia around $3,320 each.

So does this all mean Nvidia is likely to abandon the gaming GPU market? No. Earning $2.8B in three months is still a huge amount of money that will keep the company motivated to continue churning out the likes of its upcoming RTX 5000 GPUs, and other gaming GPUs in the generations beyond.

What it perhaps does mean is that the company won’t need to fight to gain new customers by lowering prices. Along with Nvidia still earning a lot from its existing gaming division, it still commands are domineering position in terms of graphics card market share, with the latest Steam hardware survey showing the company still has a 74% share of the market, compared to just 16% for AMD.

Still, with GPU prices having broadly dropped in recent weeks, the market is in a better place than it has been for many years, with the likes of the RTX 4070, RX 7600, and RTX 4080 Super all offering surprisingly good value for their segments.