According to DIGITIMES, demand for graphics processing units (GPUs) for mining of cryptocurrency is showing signs slackening off. 

In a bid to get ahead of the potential pain that could cause its business, leading graphics processor maker NVIDIA (NASDAQ:NVDA) has reportedly begin taking steps to preemptively shift more of its GPU sales back to end users who want them for gaming, according to DIGITIMES' sources. 

An NVIDIA Titan X graphics card.

Image source: NVIDIA.

Let's go over those measures. 

Some partner restrictions

According to the Taiwan-based media company's report, NVIDIA is imposing several new marketing restrictions on its graphics card partners. First, graphics card makers can't "publicly promote cryptocurrency mining activities." Second, NVIDIA's partners aren't allowed to "actively sell its consumer graphics cards to [cryptocurrency] miners." 

"NVIDIA hopes to shift its main sales target back to consumers in the gaming market," DIGITIMES writes. 

Unfortunately for NVIDIA, the reality is that those who are interested in cryptocurrency mining probably were not made aware of it through marketing activities by graphics card makers, nor is it possible for graphics card makers or their distribution partners to distinguish among their customers between gamers and cryptocurrency miners. 

In short, these restrictions are unlikely to be effective. 

Jacking up prices

DIGITIMES also says that NVIDIA "has further increased its GPU quotes recently" in an apparent attempt to "help cover the gap that may occur after GPU demand starts sliding." 

Increases in GPU prices to add-in-board partners will result in one of two things: Decreased profitability for graphics cards in the event that NVIDIA and the board partners ultimately aim to sell these cards at manufacturer suggested retail pricing, or an essentially permanent hike in graphics card prices.

In the former situation, NVIDIA could partially offset the impact from lower graphics processor unit demand, but it would leave its partners holding the proverbial bag. In the latter situation, graphics card makers don't sacrifice per-chip margins, but overall graphics card sales would come down (assuming, of course, that mining-related demand subsides). 

This is a lose-lose situation

I don't envy NVIDIA and its cryptocurrency-related conundrum. In the near term, the insatiable demand for graphics cards among miners has had -- and could continue to have -- a positive impact on the company's financial results. 

However, if that demand eventually falls off -- and over the long-term, it probably will, as specialized chips are produced to handle the mining of high-value cryptocurrencies -- NVIDIA will face potentially significant year-over-year declines in GPU shipments and revenue.  

Moreover, while NVIDIA is apparently taking some steps to shield itself from the potential damage that a slowdown in cryptocurrency mining-related GPU demand would do to its financials, the reality is that those moves are unlikely to fully mitigate the impact. 

Longer term, after NVIDIA works through the headwinds associated with that probable GPU demand decline, things should be better for the company. Right now, it's extremely difficult for gamers to get their hands on its graphics cards, which hurts NVIDIA's long-term goal of building a market for its GeForce gaming platform. 

Once gamers can buy graphics cards at reasonable prices again, and assuming that the PC gaming market remains healthy, NVIDIA's GPU business should eventually get back on the gamer-centric growth path that it was on before the cryptocurrency boom. 

Ashraf Eassa has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Nvidia. The Motley Fool has a disclosure policy.