Nvidia has warned that sales in its second quarter results will fall short.
Second quarter revenue is expected to come in at $6.7 billion, down 19 percent from the previous quarter, according to a US Securities and Exchange Commission filing Monday. The company previously said it expected $8.10 billion in sales for the quarter.
Nvidia, which is named after a Roman vengeance daemon, said the problem was gaming revenue which was $2 billion, down 44 percent from Q1 and a drop of 33 percent from the prior year.
Nvidia’s stock sank more than eight percent on the back of the news.
Once considered recession-proof, the gaming industry is weakening as consumers reconsider purchases of discretionary items such as video-game consoles when faced with a choice of it being either that or the power bill or food.
CEO Jensen Huang said in a statement: “As we expect the macroeconomic conditions affecting sell-through to continue, we took actions with our gaming partners to adjust channel prices and inventory.”
On the plus side, Nvidia’s data centre revenue was $3.8 billion, up a percent from the first quarter and up 61 percent from the prior year.
Still, while those numbers are record setting, it fell short of estimates due to supply chain problems, Nvidia said. The company noted that quarterly results will also include a $1.3 billion charge due to excess inventory and commitments in anticipation of demand.
Nvidia will officially report its quarterly results on August 24.
