As Nvidia’s gaming results underwhelm, the company sees “very tight” quarters ahead

An intense focus on AI has been overwhelming the gaming industry in recent months.

Nvidia, once a gaming tech company that now intensely and overwhelmingly focuses on AI, knows a bit about that.

The company’s gaming division booked $3.73 billion in revenue in its fourth quarter, underperforming Wall Street’s expectations of $4.03 billion. As has been par for the course over the past two years, the former golden goose division was absolutely dwarfed by Nvidia’s data center business.

Now, amid the ongoing “RAMmageddon” — in which AI’s compute needs gobble up available memory, driving up costs for consumer electronics — Nvidia says the next few quarters could be “very tight” for its gaming division.

“We expect supply constraints to be a headwind to gaming in the first quarter of fiscal 2027 and beyond,” said CFO Colette Kress. “As much as we would love to have additional more supply, we do believe for a couple quarters, it is going to be very tight.”

“Gaming revenue is facing severe supply constraints over the next few quarters that could potentially limit revenue in this segment,” Needham & Co. analyst Quinn Bolton said.

That Nvidia is also struggling through the global memory crunch isn’t a surprise. Earlier this month, a report by The Information found that the company wouldn’t be releasing a new gaming graphics chip this year — a first in company history.

The same trend has seen Micron exit the consumer chip business, Steam delay its console and run out of its handhelds, and Sony reportedly push back its PlayStation 6 plans.