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NVIDIA at the Center of the Gaming Revolution

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Nov. 20 2020, Updated 3:44 p.m. ET

Gaming customer base expands

NVIDIA (NVDA) is expanding its revenue base in the data center and AV (autonomous vehicles) markets by segmenting its end-to-end AI (artificial intelligence) and AV offerings. NVIDIA is adopting a similar approach in its traditional PC gaming business.

At its Investor Day 2018, NVIDIA’s senior vice president of the GeForce business unit, Jeffrey Fisher, stated that the gaming market has evolved over the years from one- or two-player games to multiplayer games. Citing third-party research data, he stated that over the last ten years, worldwide gaming software revenues have tripled to $100.0 billion and that the number of gamers also tripled to more than 2.0 billion individuals.

Gaming is no longer just for young people, as gamers continue playing as they get older. Initially, about 75.0% of gamers were under 35. Now about 50.0% are over 35 and 50.0% are under 35.

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Gaming becomes social

Currently, gamers can share their gaming pictures and videos on YouTube and Twitch and play with many people around the world. Gaming has become more social, with 70.0% of gamers playing a game only to be social. This social nature of gaming has given rise to esports, as several gamers play on a social platform as many people watch.

The popularity of esports has grown rapidly. Formal esports tournaments are being held, with organized leagues attracting a large number of viewers and major sponsorships. The more formal esports becomes, the more professional gamers evolve, attracting larger audiences.

PC: A preferred gaming device

Gaming has become increasingly popular with more people participating on a variety of devices and platforms. Most gamers prefer playing games on PC, as it is an open platform that offers more gaming options and flexibility to choose their hardware and performance parameters.

According to third-party estimates, more than 20,000 games were available on PCs worldwide compared with 1,500 games on Sony’s (SNE) PlayStation 4, the most popular game console.

NVIDIA: A preferred gaming GPU

As gamers increase their gameplay on PCs, they also upgrading their PCs with discrete GPUs (graphics processing units). Gamers are upgrading their PCs as more graphics-intensive AAA games are being developed. These games can’t run on integrated GPUs offered by Intel (INTC).

Among PC gamers, NVIDIA’s Pascal-based GeForce GTX GPUs are the most preferred. According to data from Steam, 86.0% of esports players use NVIDIA’s GPUs. In less than two years since the launch of the Pascal GeForce GTX 10 series, about 30.0% of NVIDIA’s installed base has upgraded to Pascal.

Next, we’ll see how NVIDIA plans to tap the expanding gaming market.

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