Is NVIDIA Corporation Turning to Notebooks to Boost Its Gaming Business?

Image source: NVIDIA.

Since May, graphics specialist NVIDIA (NASDAQ: NVDA) has been rolling out new graphics processors aimed at gaming-oriented desktop personal computers. It began with the GeForce GTX 1070 and GeForce GTX 1080 announcements in May, and in July, the company announced the mid-range GeForce GTX 1060 and ultra high-end NVIDIA Titan X.

Although I suspect that the majority of high-end gaming discrete graphics processors go into desktop computers rather than laptops, NVIDIA has been quite bullish about the market for gaming notebooks. It has also been quite vocal in letting people know that its mobile-oriented graphics processors have gotten much closer to their desktop counterparts with recent product generations.

So it's not surprising that DigiTimes is saying that NVIDIA is planning to launch new notebook-oriented graphics processors based on its new Pascal architecture later this month.

More From Fool.com

Warren Buffett Tells You How to Turn $40 Into $10 Million

LeBron James: The Next Warren Buffett?

Social Security: 3 Things to Know Before Taking Benefits Early

3 Social Security Secrets You Probably Don't Know

Three GPUs coming in August

Per the DigiTimes report, NVIDIA will announce the GeForce GTX 1060, GeForce GTX 1070, and GeForce GTX 1080 for notebooks at the Gamescom event between Aug. 17 and Aug. 21. The report also says that major notebook system vendors ASUSTek, Clevo, Gigabyte, and MSI will "showcase their latest products using the [graphics processing units]."Interestingly, these mobile-oriented Pascal-based graphics chips will actually have "equal performance" to their desktop-oriented siblings.

If that proves to be the case, then these new graphics processors should offer substantial performance enhancements relative to the company's prior generation gaming notebook-oriented products.

New products could help drive revenue in the second half of 2016

NVIDIA typically doesn't sell mobile-oriented graphics processors in a stand-alone fashion to customers. Instead, these graphics processors are pre-installed in systems that are then sold to end users.

The personal computer market typically has seasonally stronger sales during the second half of the calendar year. This general market trend, coupled with new notebooks featuring these new graphics processors should mean that NVIDIA will enjoy a boost in its gaming notebook-oriented revenue in the coming quarters.

How important are notebooks to NVIDIA's gaming business?

NVIDIA doesn't give a breakdown of the sales of its graphics processors in notebooks versus desktops -- it merely reports gaming-related revenue. In order to get a sense of how important gaming notebook revenue actually is, it's worth taking a look at some data from the Steam Hardware Survey.

Of the DirectX 12-capable graphics cards in use within the installed base of Steam users, 1.71% of gamers use a GeForce GTX 960M, 0.83% of users have a GeForce GTX 970M, and 0.43% of users have a GeForce GTX 980M.

In contrast, 5.25% of gamers are using a GeForce GTX 960, 7.42% use the GeForce GTX 970, 1.45% use the GeForce GTX 980, and 1.41% use the GeForce GTX 980 Ti (there isn't a comparable product to this in the notebook market).

The numbers, though, seem to paint a pretty clear picture: There are far more gamers buying discrete graphics cards for desktop computers than there are gamers buying them for notebooks, though the numbers on the notebook side aren't trivial.

So the bottom line is that notebook gaming is an important area for NVIDIA to pursue, but desktop gaming is still substantially more important.

A secret billion-dollar stock opportunity The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here.

Ashraf Eassa has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Nvidia. Try any of our Foolish newsletter services free for 30 days. 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.