GPU sales are expected to take a 30 to 40 percent dive this quarter, as demand evaporates.
GPU vendors — particularly AMD — have been blessed over the past year by Bitcoin and Litecoin driving up demand for video cards. GPUs, given the nature of their processor architecture, have proven to excel at cryptocurrency mining which led to a big spike in demand for AMD’s R9 290x card. For months the card was either sold out, or only available at inflated prices on eBay because of demand from miners.
But the outlook now is bleak. Over the past eight months, the difficulty level of Bitcoin and Litecoin spiked as more people started mining and hyper-efficient application-specific integrated circuit (ASIC) miners came online. In addition, since the beginning of the year the price of Bitcoin has dropped enormously owing to a loss of confidence in the cryptocurrency due to the Mt. Gox fiasco. A recent report from Digitimes quantifies this, as it reports sales are expected to drop 30 to 40 percent compared to the same quarter last year. Reportedly there is a major glut of inventory lower down the supply chain, and board partners are considering cutting prices to clear out this excess inventory.
But the real elephant in the room is that for most gamers, the current — and last generation — of graphics cards are simply good enough. There’s not a demand for new GPUs from gamers, because games themselves aren’t demanding enough to warrant the upgrades. Most major games now are developed first with consoles in mind, which means they won’t be anything close to taxing on high-end GPUs.
Until there are a series of games that push new GPUs to their limits, Nvidia and AMD are going to be stuck with stagnant sales. This is a big problem that no amount of rebranding can solve.