Nvidia is scrambling to get graphics cards to gamers amid crypto boom

Nvidia’s (NVDA) most loyal customers, — gamers — are feeling the squeeze as cryptominers buy up every graphics card they can find, driving card prices through the roof.

That’s not something Nvidia would normally have a problem with but its keeping an eye on the matter. The graphics card maker announced record fourth quarter revenue of $2.9 billion on Thursday, with its gaming division leading the way with $1.7 billion for the quarter.

That’s a huge slice of the pie, and it continues to grow. Gaming graphics cards revenue was up 29% year-over-year. But gamers, the customers who backed Nvidia over the years, simply can’t get their hands on any cards because cryptominers have been snatching them up.

The problem has gotten so bad that Nvidia CEO Jensen Huang said during the company’s earnings conference call that he is pushing retailers and system builders to prioritize gamers over cryptominers.

“We typically have somewhere between 6 to 8 weeks of inventory in the channel, and I think you would ascertain that, globally, the channel is relatively lean,” Huang said. “We are working really hard to get GPUs out into the marketplace for the gamers, and we are doing everything we can to advise e-tailers and system builders to serve gamers.”

That certainly sounds like a ridiculous move on the company’s part. After all, a sale is a sale, right? Who cares if gamers or miners get a hold of graphics cards, as long as it adds to the company’s bottom line. Nvidia should care because gamers are the consumers that it relies on the most. And gamers are a notoriously loyal bunch. They’ll support the companies they back to a fault. But when they feel slighted, they can become frustratingly belligerent. I should know, I’m a huge gamer.

Cryptominers buying up graphics cards by the truckload wouldn’t be such an issue if it wasn’t for the fact that supplies of the processing behemoths have become so limited that Nvidia said its channel inventory is at historical lows in the fourth quarter. The low inventory has naturally led to a huge spike in prices for graphics cards, which has put a serious hurting on gamers. Nvidia doesn’t know exactly how many of its cards are being snatched up by miners, but it did say that it expects demand from those customers to increase going forward.

“Our main focus remains on our core gaming market, as cryptocurrency trends will likely remain volatile,” said Nvidia CFO Colette Kress.

Why graphics cards are in such high demand

Graphics cards are important because they allow PCs to perform the incredibly strenuous calculations needed to produce the near life-like graphics today’s games are capable of. Without a powerful enough graphics card, you can’t play the latest and greatest games on your PC. Sure you can get a console like Sony’s (SNE) PlayStation 4, Microsoft’s (MSFT) Xbox One or Nintendo’s (NTDOY) Switch, but PC gaming is as much a culture as it is a pastime.

PC gaming affords players the ability to modify their games with special features created by fellow gamers, which can lead to even better experiences and even entirely new games. There’s also that fierce loyalty I spoke of that gamers have for the platform they choose to play on. God help you if you tell a PC gamer that consoles are the superior system.

If you’re the type of person who simply wants to get into PC gaming in the easiest way possible, you can buy a pre-build desktop or laptop and get going. But a good number of PC gamers prefer building their own machines. It gives them a greater sense of ownership, accomplishment and a chance to truly customize their system. To do that though, you need a graphics card.

Even if you buy a PC, you’ll eventually want to upgrade its card as games become more demanding over time.

Skyrocketing prices

Normally, the price of a high-end graphics card, such as Nvidia’s GTX 1080 Ti is listed on the company’s site for $699. That’s a lot of scratch, but can be worth it for games. But with cryptominers scooping up the cards to perform the calculations needed to mine for cryptocurrencies like bitcoin, prices have skyrocketed to as high as $1,800 to $2,000 on sites like Amazon (AMZN) and Newegg. It’s important to note that Nvidia doesn’t set prices for cards sold outside of its own site and the price for the cards on its site remain the same, but you can’t buy one there because all cards are currently sold out.