Nvidia dropped its quarterly earnings after market close on Wednesday, and the number that jumped out at me wasn't the total revenue (still north of six and a half billion, which is a lot of money by any sane measuring stick). It was the gaming segment. Down about a third year over year. Down even more than that from the previous quarter. Jensen Huang got on the call and basically admitted what everyone building a PC already knew in their gut: the graphics card market spent the last two years being completely insane, and now it's crashing back to earth.
I want to be a little happy about this and I mostly am, but let me back up first, because if you weren't trying to buy a GPU between 2020 and now you might not fully get why this matters to me personally.
I tried to build a new rig in early 2021. Tried is the operative word. RTX 3080s were supposed to launch at $699. I watched them get bought out by bots in under a minute, then resold on eBay for $1,400, sometimes more. Mining rigs were the reason: Ethereum miners were buying every card that existed, and scalpers were riding shotgun on top of that demand, and the two groups together made it functionally impossible for a normal person to buy a graphics card at MSRP for the better part of two years. I wrote about this back in September 2020 on here (go dig through the archives if you don't believe me) and I was furious about it then. I stayed furious about it, honestly, through most of 2021.
So now here we are. Crypto had its ugly spring (Luna imploding in May, the broader market getting cut in half, mining profitability falling off a cliff as coin prices dropped), and Ethereum is getting ready to ditch proof-of-work mining entirely sometime next month, which means the single biggest source of artificial GPU demand for the last two years is about to disappear completely. Add in a general slowdown in PC sales as people who bought laptops and desktops during the pandemic aren't in a hurry to upgrade again yet, and you get exactly what Nvidia reported: a gaming card glut. Retailers and board partners are sitting on inventory nobody particularly wants right now, at prices set during a boom that's over.
Which, again, is good news if you're a buyer. I checked prices on a 3080 yesterday out of curiosity and found one hovering just under $700 at a legitimate retailer, no bots, no line, no refresh-the-page-every-eight-seconds nonsense. That's basically MSRP, two years late. I don't think I've seen that since the card launched.
The part that's a little uncomfortable is thinking about what happens next, because Nvidia's answer to a gaming slump isn't going to be "sell cards cheaper forever." The 40-series cards are coming — everybody expects an announcement sometime this fall — and there's a real chance Nvidia uses the current inventory mess as cover to launch the new generation at higher prices than the outgoing one, on the theory that people got used to paying scalper-adjacent prices anyway so a jump from $699 to something like $899 won't feel as outrageous as it should. I have no inside information here, I'm just a guy who's watched this company for over a decade of blogging about it, and that's the pattern I'd bet on. Companies don't usually give back margin once customers have proven willing to pay it.
I also can't shake a mild irritation at how long this took to resolve itself. Two full years of a hobby getting priced out of reach for a huge chunk of the people who actually wanted the hardware to play games, not mine coins, and the fix wasn't some industry-wide accountability moment, it was just crypto collapsing under its own weight and taking mining demand down with it. Nobody solved the scalping problem. The market just got un-hot, mostly by accident, the same way it got hot in the first place.
Anyway. If you've been holding off on a build, and you've got the patience to actually wait a few more weeks and watch where prices land once the earnings dust settles, this might finally be the moment. I'm eyeing a 3080 for the machine in my office that's still limping along on a card from 2018, and for the first time in a long while I don't feel like I'm being robbed for the privilege.