Upgrades in Game Consoles Create Opportunity for NVIDIA
NVIDIA: GPU-Accelerated Computing Could Be a Game-Changer
NVIDIA’s gaming products
In the previous part of this series, we saw that NVIDIA (NVDA) sees strong growth opportunity for its GeForce GPUs (graphic processing units) in the emerging markets (EEM), including China.
On the software front, NVIDIA offers GeForce Experience, an optimization platform that updates the software driver to make it ready for the latest games.
Not only does NVIDIA serve the gamers, it also serves the game developers through its GameWorks platform, which is a part of NVIDIA SDK (software development kit). The kit creates self-contained software libraries that are integrated into the world’s popular game engines such as Unreal 4 and Amazon’s (AMZN) new Lumberyard.
While these are opportunities tapped under the platform and network approach, the company is seeing opportunity in the production value of content as well.
Production value of content
The upgrade in console games—Sony’s (SNE) PlayStation 4 and Microsoft’s (MSFT) Xbox One—has raised the performance benchmark by seven to eight times to 1080p and 60 fps (frames per second). To achieve this level of performance, one needs a GTX 960 GPU (graphics processing unit), which costs close to $200.
Developers are developing games according to the new benchmark. The latest AAA games recommend the GTX 960 GPU, with a majority recommending GTX 970 or 980. This has created an increasing need for serious gamers to upgrade their PCs to get the ultimate gaming experience, or “production value,” of these AAA games.
According to NVIDIA, out of its installed GPU base of around 100 million, about 80% need to upgrade their GPUs to play the latest AAA games. The 100 million–user GPU installed base is not the gaming universe. There are some discrete GPUs and games on Steam that also need upgrades.
Every new upgrade in console games raises the performance benchmark, creating an opportunity for NVIDIA.
Opportunities in gaming content
In PC gaming, some developers give gamers access to modify the game and create their own content, which is called Mods. This requires a GPU which is more powerful than the recommended GPU. This trend is gaining popularity, creating an opportunity for NVIDIA to sell high-grade GPUs.
Another major opportunity is the launch of Oculus Rift and HTC Vive VR (virtual reality) headsets. Over 90% of installed PCs are not VR-ready. They need to upgrade their PCs with the recommended GPUs to get the intended VR experience.
However, there is more to VR than just gaming. NVIDIA’s CEO, Jen-Hsun Huang, describes VR as “a new computing platform.” We will look at other VR opportunities in the coming part of this series.
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