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NVIDIA Corp.'s Most Popular Product in 2015

By Ashraf Eassa – Feb 8, 2016 at 10:25AM

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The graphics specialist's most popular product in 2015 was also its most controversial.

In late 2014, graphics specialist NVIDIA (NVDA -1.51%) launched a couple of new graphics processors based on its Maxwell architecture: the GTX 970 and the GTX 980. Easily the star of the show was the GTX 970, a card priced at around $330 that delivered similar performance as the company's GTX Titan graphics card, which launched at a whopping $999 in in early 2013.

However, some controversy around the card broke out in early 2015 due to two things:

  1. NVIDIA had provided incorrect specifications in the reviewers' guide sent to professional reviewers; and
  2. Although the GTX 970 cards came with four gigabytes of memory on board, only 3.5 gigabytes of this memory runs at "full speed," with the remaining half gigabyte running at lower speed.

At the time, this looked like a PR nightmare for the graphics specialist. However, fast-forward to today, it's clear that not only were NVIDIA's GTX 970 sales not particularly affected by this "controversy," but that the part was easily NVIDIA's most popular product among PC gamers in 2015.

Digging through the numbers
These days, the vast majority of PC gamers use a program known as Steam to purchase, download, and play games. One of the nice things about Steam is that every month it conducts a hardware survey, which collects data on the kinds of components that Steam users (who are likely by and large gamers) have in their machines.

This data is very useful to game developers as it allows them to understand what kinds of hardware they can reasonably target for their games. One of the nice things about this data for the investment community is that it allows us to get a glimpse into what gamers are buying, market share shifts among component vendors, and so on.

At any rate, according to the Steam Hardware Survey, the GTX 970 -- as of January -- is the most popular graphics processor among gamers, capturing 4.28% share among all Steam users who participated in the survey.

The second most popular is Intel (INTC -1.11%) HD Graphics 4000 with 3.19% share (likely casual gamers playing low-intensity games on laptops), with the NVIDIA GTX 960 coming in third place with 2.53% share.

GTX 970 has been and continues to be a hugely successful product for the graphics specialist.

What does this data tell us?
In addition to painting a positive picture from a market share perspective for NVIDIA, these results also show that gamers are quite willing to pay for performance if they feel they're getting good value. The GTX 970 is a $330 card, which is hardly "budget" among discrete cards, and the GTX 960 is a roughly $200 card.

This is a long-term positive for NVIDIA. Indeed, I suspect that as long as NVIDIA is able to deliver compelling performance improvements at the typical gaming processor price points, it should be able to continue to grow its gaming graphics processor business nicely in the years ahead.

The next move for NVIDIA
NVIDIA is expected to roll out its next-generation graphics architecture, known as Pascal, at some point in 2016. It's not clear yet when in 2016 the Pascal architecture will arrive, but I suspect that once it does, the performance enhancements it should bring to the table as a result of an updated architecture and a migration to a new chip manufacturing technology will be enough to catalyze another upgrade cycle among gamers.

Ashraf Eassa owns shares of Intel. The Motley Fool recommends Intel and NVIDIA. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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