Graphics card maker Nvidia is also feeling the sting of the current economic climate.
Its recent financial report revealed the company fell short of Wall Street's Q3 expectations, blaming "challenging market conditions" for this setback (via CNBC).
Two weeks ago, Nvidia predicted it would not meet Wall Street's finacial estimates, commenting that it had seen a significant slow down in growth driven by "disappointing" sales. At this time, Nvidia also stated it would see a decline in its gross margin.
This has turned out to be accurate.
Refinitiv - an American-British global provider of financial market data and infrastructure that is a subsidiary of the London Stock Exchange Group - expected Nvidia to report $8.10bn in revenue. The actual figure was $6.7bn.
In addition to this, Nvidia revealed its game department revenue has experienced a greater decline than the company was initially predicting. Latest figures on this state it is down by 33 percent year-over-year (to $2.04bn).
But what are the reasons for this decline?
"Macroeconomic headwinds across the world drove a sudden slowdown in consumer demand" for gaming products, said Nvidia CFO Colette Kress on a call with analysts this week.
CNBC also posits another reason: cryptocurrency mining. Nvidia graphics cards have been in high demand during the pandemic, with many now working from home. However, CNBC suggests questions remain on whether this was driven by cryptominers who believe Nvidia cards are efficient at mining Etherium.
"Volatility in the cryptocurrency market – such as declines in cryptocurrency prices or changes in method of verifying transactions, including proof of work or proof of stake – has in the past impacted, and can in the future impact, demand for our products and our ability to accurately estimate it," said Kress.
"We are unable to accurately quantify the extent to which reduced cryptocurrency mining contributed to the decline in Gaming demand."
But now crypto prices have collapsed, and the demand is no longer there. This has left Nvidia with a surplus of GPUs that no one wants.
In addition to this crash, another aspect to consider is that PC gamers are expecting the new generation of GPUs to come out sometime towards the end of this year.
Therefore, rather than buying anything now, many are waiting for the next wave of products to be made available.
The world economic situation is also affecting other companies, with Sony today raising the price of its PlayStation 5 console and Meta increasing the price of its Quest 2 VR headset.
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