How NVIDIA (NVDA) Is Dominating The Gaming World

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In August 1999, NVIDIA introduced the Graphics Processing Unit (GPU) for the PC industry with GeForce 256. With its GPU, NVIDIA redefined modern computer graphics and revolutionized computing forever. Nineteen years later, there is no looking back. Defying Moore’s Law, “NVIDIA GPU computing has given the industry a path forward and will provide a 1,000X speed-up by 2025.”

Today, NVIDIA, Inc. (NVDA) is the leader in gaming graphics and performance.

Here’s how NVIDIA dominates the gaming world with its GPUs as it continues to work towards AI computing.

At $100 billion in revenue, ‘interactive’ entertainment is the largest entertainment industry presently. Behind this phenomenal growth is the cross-platform digital games and the rise of gaming video content, virtual reality and esports. On the back of technological advancements in gaming hardware and software, the global gaming market size is anticipated to reach $171.96 billion by 2025.

While this figure reflects a healthy growth, a report by Digi-Capital gives a more optimistic outlook, predicting that video gaming (software and hardware) could reach $165 billion in 2018, with the estimate to reach $230 billion by 2022. According to a report by the Entertainment Software Association (ESA), the U.S. video game industry’s value added to U.S. GDP is more than $11.7 billion.

These figures are an insight into the fast-growing gaming industry and the potential it holds for companies such as NVIDIA.

Gaming and NVIDIA are important for each other. Out of the five segments across which NVIDIA reports its revenue, gaming constitutes around 55% of its overall revenue. During the first three quarters of FY19, NVIDIA reported a revenue of $5.29 billion under gaming vis-à-vis $3.77 billion during the same period in the previous year.

NVIDIA’s GeForce is the largest platform for computer gaming. While NVIDIA’s powerful GPUs transform everyday PCs into “powerful gaming machines,” its GameWorks software allows developers to make games photorealistic. NVIDIA via its cloud-based service has pioneered Gaming as a Service (GaaS) turning Macs and regular PCs into new-age gaming machines.

The results from a survey by Steam (April-November 2018) shows that NVIDIA dominates the category of PC video card usage by manufacturer with a 74.11% share, followed by AMD (15.21%), Intel (10.53%) and others (0.15%). The PC graphics card market share for the past 3 years shows that NVIDIA has strengthened its market share; increasing from 56.7% in June 2016 to 63.6% in June 2017 to 76.4% in July 2018.

NVIDIA takes gaming to a whole new-level. NVIDIA began 2018 with an exciting announcement about the world’s first big-screen PC gaming display—Big Format Gaming Display (BFGD), designed to ensure a whole new gaming experience.

NVIDIA made a huge generational leap in gaming GPUs in August 2018 as it released the first gaming GPUs based on the new NVIDIA Turing architecture (capable of delivering 6x performance) and the NVIDIA RTX platform bringing real-time ray tracing to gamers using Artificial Intelligence (AI).

The release of NVIDIA’s GeForce RTX platform garnered industry support as the world’s top game publishers, developers and engine creators announced their intent to “bring the holy grail of real-time ray tracing and the power of AI to gamers everywhere.” Blockbuster games — Battlefield V and Shadow of the Tomb Raider — are being developed on the NVIDIA RTX platform.

NVIDIA RTX is emerging as the industry-standard game development platform for adding real-time ray tracing to games. Further, “GeForce RTX GPUs also support Deep Learning Super-Sampling (DLSS)—a technology that applies deep learning and AI to rendering techniques, resulting in crisp, smooth edges on rendered objects in games.”

Games that will use DLSS includes, Ark: Survival Evolved, Atomic Heart, Dauntless, Final Fantasy XV, Fractured Lands, Hitman 2, Islands of Nyne, Justice, JX3, Mechwarrior 5: Mercenaries, PlayerUnknown’s Battlegrounds, Remnant: From the Ashes, Serious Sam 4: Planet Badass, Shadow of the Tomb Raider and The Forge Arena, among others.  

Innovation lies at the heart of NVIDIA. The company has invested over $15 billion in research and development since its inception with $1.33 billion, $1.46 billion and $1.80 billion being spent on research and development in 2016, 2017 and 2018 respectively. In the previous financial year, 70% of its employees out of the total 11,500 were engaged in research and development.

Be it the thinnest and fastest gaming laptop–Max-Q, AI-enabled chips or Gaming as a Service via cloud, NVIDIA is always on the top. The upcoming CES 2019 in January is rumored to bring more exciting news for gaming enthusiasts, developers and companies.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Referenced Symbols: NVDA

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