Nvidia: We Will Have 1 Billion of Potential Customers in Several Years

Nvidia Expects Video Games to Attract New Technology Demanding Clients

by Anton Shilov
12/11/2009 | 10:28 AM

UPDATE: Attributing the quotes to senior vice president of investor relations and communications.

 

Senior vice president of investor relations and communicationsof Nvidia Corp. said at a technology conference earlier this week that in several years timeframe there will be about billion of gamers worldwide, which means that those people will be potential customers of Nvidia, a leading supplier of graphics processing units and multimedia chips.

“[According to a market intelligence], [over 200] million people were online playing games [as of 2008] and that audience is supposed to grow at 21% compound annual growth rate. So, if you do the math, in a few short years Nvidia’s addressable market just for video gamers will be a billion of people. Some of them will remain casual gamers and some of them will become enthusiast gamers and that is ultimately a market we can always sell to,” said Michael Hara, senior vice president of investor relations and communications, at Barclays Technology Conference.

Obviously, far not all people play games online using personal computers that feature discrete graphics cards, the cornerstone of Nvidia’s business. However, Nvidia also develops graphics solutions for video game consoles (Sony PlayStation 3) or personal digital media players (Microsoft Zune HD), which means that popularization of video games in general potentially means additional revenue for the company.

It remains to be seen whether prediction that in “a few short years” there will be one million of gamers who play games more or less regularly. For example, there are 4 billion mobile phones in the world today and the vast majority features some form of interactive entertainment, however, only a handful of end-users actually utilize those functions frequently. So, one billion people addressable market for Nvidia (and its arch-rival ATI, graphics unit of AMD) means gamers, who use PCs, dedicated game consoles or highly-integrated mobile devices, not just simplistic cell phones.

Nvidia believes that the market of video games will continue to grow, even amid the global economic slowdown.

“A lot of people around the world play video games. [Games] are part of their lifestyle. In hard times people play more games because they cannot afford to go out. […] It has always been an important segment [for us], […] it is a corner-stone of Nvidia. It is a good indicator that more and more people play games every day. […] Realistically, if you look at the dynamics of online gaming, if you look at the age children play at this games, it is getting younger and younger. For Nvidia [it means] increase of the installed base; ultimately, the addressable market is going to bigger,” said Mr. Hara.