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.
Our strategy with RTX was to take a lead and move the world to ray tracing. And at this point, I think it’s fairly safe to say that that the leadership position that we’ve taken has turned into a movement that has turned next
– generation gaming ray tracing into a standard. Almost every single game platform will have to have ray tracing and some of them already announced it and the partnerships that we’ve developed are fantastic. MicrosoftDXR is supporting raytracing, Unity is supporting ray tracing, Epic is supporting raytracing with the Unreal Engine 4, leading publishers like Electronic Arts have adopted RTX and supported raytracing. Even movie studios, Pixar has announced that they’re using RTX and will use artifacts to accelerate their rendering of films.And so, Adobe and Autodesk jumped on to RTX and that will bring raytracing to their content and their tools. And so, I think at this point it’s fair to say that that raytracing is the next generation and it’s going to be adopted all over the world.
Jensen Huang, NVIDIA CEO
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.
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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.
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