Nvidia’s market share surges as gaming chip market ‘rebounds’ and boosted by AI, analysts say

AI Basics

Wallace Witkowski

Nvidia’s dominant share of the gaming chip market increased 700 basis points in March to 83% of users, a B of A analyst said, citing warned Steam data.

A flood of new gaming cards for the holiday season has saturated an already crowded market, but one analyst said Nvidia Corp. will gain more control as the rise of artificial intelligence hastens the recovery of chip makers. and believes the market is now “on the road to recovery.”

Using survey data from over 25 million active users of online gaming network Steam, B of A Securities analyst Vivek Arya notes that 82.6% of users use Nvidia (NVDA) cards Did. These cards range from his Nvidia’s GT 10 series running on the ‘Pascal’ architecture released six years ago to his RTX 40 series ‘Lovelace’ cards released in late 2022. increase.

But given the recent reopening of internet cafes in China, Aria is scrutinizing its data “cautiously.” pointed out survey data showing that 51.7% of participants using The 2018-2019 cycle saw a similar “overvaluation” as sales declined before they cleared inventory ahead of new launches.

Arya believes the gaming market is “recovering” after sales fell 50% in the fourth quarter and expected a similar decline in the first quarter, marking the fourth straight quarter of year-over-year growth. said there is. – Years decrease.

Unlike the 2021 holiday season, game cards from Nvidia, Advanced Micro Devices Inc. (AMD), and Intel Corp. (INTC) were readily available and relatively close to their late 2022 suggested retail prices. and AMD.

Arya said one “potentially underestimated” aspect of Nvidia’s video game technology is its increased use of AI, which most games already use at a basic level. I was.

Read: Nvidia CEO predicts AI revenues will grow from ‘very small’ to ‘very big’ in the next 12 months

“Existing games today use AI fundamentals to support computer-controlled responses when given certain inputs (e.g. computer-controlled opponents), but actions are pre-programmed. said Arya. “Thus, game/computer-controlled opponents cannot constantly ‘learn’ and adapt from user input/prompts. ”

“With generative AI, [large language models] It can be developed and used to enhance gameplay, allowing for everything from creating new virtual worlds, reducing predictability for game/CPU-controlled opponents,” said B of A analyst. says. Reduce costs. ”

-Wallace Witkowski

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04-07-23 0836ET

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