During NVIDIA’s 2019 Q1 earnings call, the company’s prospects weren’t too bright compared to last year. Both the consumer GPU business as well as the Data Center segment dropped when it comes to the YoY revenue. However, compared to the last quarter of 2018, the stocks were relatively in better shape and saw a minor spike of 5% after the announcement.
Back in the latter half of 2018 when the Turing GPUs were launched, they didn’t get a very warm reception. No one was impressed with the prices, and then after the cards started shipping, there were only one or two titles that actually supported RTX specific features, namely Battlefield V, followed by Metro Exodus. Although NVIDIA was able to win back some favor with the GTX 16 series lineup, the high-end space left a lot to be desired.
At the first quarter earnings call, despite the company’s mediocre performance, the company CEO, Jensen Huang was very optimistic, while throwing the blame for the low revenue on a variety of factors from the shortage of Intel CPUs to the crypto-currency hangover. He claimed that the “leadership position” NVIDIA has taken, has resulted in ray tracing becoming a standard for the next-gen gaming platforms. He highlighted the recent adoption of ray tracing by Unity, Unreal and EA’s Frostbite engines while also vaguely pointing to Sony’s announcement to incorporate ray tracing in the next-gen PS5 console.
To be fair, he’s not wrong. NVIDIA’s RTX GPUs did popularize ray tracing among the masses, and if not for them the next-gen consoles and most game engines wouldn’t have supported the technology, at least not so soon. However, things aren’t looking so rosy for NVIDIA. The company’s profit from the gaming segment was down by 30%, compared to last year and the Data Center business was even worse off. The coming months will be crucial for almost all semiconductor manufacturers, with many new architectural and product launches planned for Computex and E3.