Graphics card giant Colette Criss says the company was unable to estimate the decline in crypto mining demand that affected second-quarter results, which fell short of analyst expectations on Wednesday.
The chip giant released its financial results for the three months ending July 31, which revealed a 19% quarter-over-quarter decline in revenue to $6.5 billion, while net income fell 59% to $656 million.
Revenue from the gaming division, which includes sales of high-end graphics processing units, fell 44% in revenue from the previous quarter to $2.04 billion, which Nvidia attributed to “challenging market conditions.”
Chris, who is also the company’s executive vice president, said that Nvidia has limited insight into how the crypto market will affect demand for their gaming products:
“Our GPUs are capable of mining cryptocurrency, although we have limited view of how this will affect our overall GPU demand.”
“We are unable to accurately quantify the extent to which the decline in cryptocurrency mining is contributing to the decline in demand for games,” she added.
While the chip giant’s GPUs are designed for gaming purposes, the high demand for cryptocurrency mining activities over the past few years has contributed to the company’s stock price increase by 320% over the past five years.
Chris said, however, that the decline in cryptocurrency prices and changes in the consensus mechanism have in the past affected demand for and appreciation of their products:
“Volatile volatility in the cryptocurrency market – such as declines in cryptocurrency prices or changes in the way transactions are verified, including Proof of Work or Proof of Stake – has impacted the past, and could affect the future, demand for our products and our ability to accurately estimate it.”
With the Ethereum consolidation scheduled for September 15th, the change in the proof of stake network consensus could reduce demand for crypto miners. This could cause a problem for crypto mining products like Nvidia’s CMP170 HX, which currently costs around $4,695.
Related: Nvidia will pay $5.5 million as part of SEC case over ‘inadequate disclosures’ about crypto mining
However, cryptocurrencies such as Bitcoin (BTC), Litecoin (LTC), Monero (XMR), and Dogecoin (DOGE) are among the networks still working on Proof of Work consensus mechanisms with no observable plans for a future transition.
Nvidia’s stock price is also down 5.89% over the past five days on Nasdaq.