Nvidia wants retailers to sell their GPUs to gamers rather than cryptominers for good reason.
Nvidia Corporation invented the GPU, which “creates interactive graphics on laptops, workstations, mobile devices, notebooks, PCs, and more,” according to the company website.
Recently, the demand for cryptocurrency has driven cryptominers to tap into graphics processing units to “crunch big volumes of calculations to create or ‘mine’ digital currency like Bitcoin,” The Inquirer reported.
This is due to a number of factors, which include increased visibility despite security concerns and high risk associated.
Meanwhile, the spike in demand has led to a shortage of products (GPUs) on the market, which in turn drove up price, according to GamingBolt, who described the prices as “ridiculously high.” The Inquirer reported:
“According to Techspot, there has been a marked increase in graphics card prices in teh US, with a GeForce GTX 1080 Ti, one of Nvidia’s top gaming GPUs, jumping from an MSRP price of $700 to $1,200.”
Nvidia is asking retailers to limit sales of products to two per customer because cryptominters typically buy the technology in bulk, GamingBolt reported.
Why doesn’t Nvidia rise to meet the demand instead of trying to tighten the target market and limit purchases? It’s all about the consistency of demand that motivates them to control the situation– long-term planning.
Consistency of Demand
The American technology company is protecting themselves from a drop in demand that is inevitable if cryptocurrency falls.
Since opinions are divided on the likelihood of cryptocurrency success, the company is avoiding the high risk of expanding to meet demand that might not exist later on. Gamer demand is more consistent than the entrepreneurial efforts of cryptomining profit seekers.
“It sounds like a fair response, but it also beggars the question of just how practical this advice is, and whether or not it will actually end up bringing the situation under control,” according to GamingBolt.
Cryptocurrency may not be the major influence in pricing. The Inquirer questioned the issue:
“Whether these prices are down to retail standard competition or are being influenced by cryptocurrency miners is difficult to tell. But we did notice that the more powerful Nvidia cards seemed limited in stock, and Overclockers didn’t have the option to buy multiple GeForce GTX 1080 and GTX 1070 cards at once.”
If cryptocurrency is the issue and Nvidia successfully brings prices down by limiting sales, whether this is the best decision remains to be seen. Should cryptocurrency fall, then Nvidia will have avoided a disastrous investment. If not, they will be behind the curve.