Video Card Revenues Reportedly Drop 80 Percent – End Of Mining Boom?

Over the past year the cryptocurrency mining craze has taken the world by storm. Desktop graphics cards flew off the shelves, prices shot up and video card makers saw new earnings skyrocket. This is because a modest 1 GH/s Ethereum mining farm was bringing in about $250 per day back in June 2017. It would take roughly 30 NVIDIA GeForce GTX 1070 video cards that have been overclocked to reach that mark in case you needed an idea of how many GPUs it would take.

Buying 30 NVIDIA GeForce GTX 1070 video cards when they launched in June 2016 at $399 each would set you back around $12,000. That sounds expensive, but when you are bringing in a over a hundred dollars a day, you can recoup your investment rather quickly and that is what led to the mining boom of 2017-2018. That caused video cards to fly off store shelves as people learned that they could cover the cost of a graphics card over several months of mining and the rest was pure profit after electrical costs and taxes.

Pretty much every PC gamer around the world hates miners as they sucked up all the graphics cards and caused prices to skyrocket. The NVIDIA GeForce GTX 1070 that launched at $399 hasn’t been able to be bought for that since mid-2016. The price for a GTX 1070 slowly crept up to around $500 in early 2017 and then in January 2018 the price shot up to over $750 per card when Ethereum hit an all time high of over $1400. We knew many gamers that were bashing miners on social media, but were closet mining themselves!

As groves of people started mining Ether (ETH) on desktop graphics cards the hashrate of the Ethereum Network went through the roof as did the difficulty. This means miners aren’t able to mine as much as they once were and unless they keep adding graphics cards to their mining farm, daily revenue will decrease. The price of Ether has also pulled back from its all time high of over $1400 and is currently valued at around $615. That 1GH/s mining farm that was generating $250 of Ether a day has been bringing in between $29 to $63 per day over the past two months. That caused some miners to turn off their systems and it most certainly caused many to stop buying graphics cards. To what degree we didn’t know, but Digitimes ran a story yesterday that says how just how bad the sluggish cryptocurrency market has hurt GPU sales.

Digitimes reports that the sudden decline in demand for mining graphics cards in April 2018 caused TUL, maker of PowerColor graphics cards, revenues for the month to plunge 80% to levels not seen since May 2017. Other video card add-in-board partners are reportedly seeing significant declines as well and this is causing some to say this is the end of the GPU mining boom. Both AMD and NVIDIA have said that mining doesn’t really impact them, but its pretty clear that cryptocurrency mining has helped sell graphics cards around the world. Desktop graphics card prices are back to about where they were in December 2017 and look like they are continuing to drop as some inventory is finally available in warehouses. One would think that with an 80% revenue decline that prices would drop more than they have, but it feels like something is keeping them up. Maybe these companies are crossing their fingers that the cryptocurrency market rebounds and sales go through the roof again! If not, we’ll see just how much the mining market helped these companies bring in record high profits in recent quarters.