Nvidia CEO says video gaming market is slowing down

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Chip designer Nvidia Corp forecast its sales of video game chips would decline in the current quarter, and startled some analysts by laying out new supply-chain issues resulting from China’s COVID-19 lockdowns. Also Read — Dyson announces the results of its annual global dust study for 2022

Chief Executive Jensen Huang told Reuters that Nvidia‘s gaming business revenue will post a percentage drop in the mid-teens for the current quarter compared with the previous quarter. Also Read — Apple iPhone 14 launch may be delayed due to Covid-19 impact in China

“Overall the gaming market is slowing,” Huang said. Based on the softer market demand, Nvidia has chosen to reduce what it sells into the China market, he said. Nvidia is also taking a hit from Russia and sees “slower sell-through” in Europe, he said. Also Read — Global refurbished smartphone market records 15% YoY growth in 2021, Apple takes lead

Nvidia shares fell 6.7% in extended trading, even though the company’s first-quarter revenues and earnings topped analyst estimates. The shares are down about 40% so far this year in tandem with a wider selloff in growth stocks over concerns of aggressive interest rate increases by the U.S. Federal Reserve.

Concerns over inflation are spreading through the U.S. economy, as consumers weigh purchases of items such as laptops and video game consoles.

Nvidia forecast second-quarter revenue of $8.10 billion, plus or minus 2%. Analysts on average expected $8.45 billion, according to IBES data from Refinitiv.

The lower revenue forecast included an estimated reduction of about $500 million relating to Russia and the COVID lockdowns in China. Chief Financial Officer Colette Kress saidthe $500 million figure included about $400 million lost in