NVIDIA Corporation's New Gaming Graphics Cards Seeing Fast Adoption

Image source: NVIDIA.

Each month, Valve Corporation publishes what it refers to as the Steam Hardware Survey. Steam is one of the most popular computer game distribution platforms, if not the most overall. The survey collects a lot of information about the computer hardware that gamers who employ the Steam platform actually use, which means it's a reasonably good tool to try to figure out the pace at which gamers are adopting certain computer hardware and technology.

After looking at the Steam Hardware Survey results for September, it's clear that graphics specialist NVIDIA's (NASDAQ: NVDA) latest Pascal-architecture graphics processors are being adopted at an extremely rapid rate.

Let's take a closer look at the findings.

Significant adoption of Pascal-based gaming graphics cards

According to the survey, the Pascal-based GeForce GTX 1060, GTX 1070, and GTX 1080 now comprise a full 3.2% of all the DirectX 12-capable graphics cards in use by Steam gamers. Here's the breakdown by individual processor:

Source: September Steam Hardware Survey.

Perhaps more interesting, though, is the rate at which Steam gamers are adopting these graphics processors. Between August and September, here was the growth in penetration rate of each of these graphics processors among the same Steam gamers:

Source: September Steam Hardware Survey.

Clearly, growth in penetration rate of the GTX 1060 outpaced its more expensive siblings. It's worth noting, though, that the GTX 1060 cards that launched back in July initially sported fully enabled graphics processors and six gigabytes of video memory. As a result, the pricing for cards based on these processors began at $249 and even extended beyond the $299 mark.

In mid-August, NVIDIA and its partners rolled out a cheaper variant of the 1060 with a partially disabled processor and just 3 gigabytes of memory, which may have helped to accelerate the adoption rate of the 1060 relative to the 1070 and 1080.

It also doesn't come as a surprise that the more expensive a particular graphics processor is, the slower its relative rate of adoption is.

GTX 1080 doing much better than its predecessors

The GTX 980, which first hit the market at a $549 price point, didn't quite enjoy the success of the cheaper GTX 970, nor even the success of the pricier GTX 980 Ti that launched nine months later.

The GTX 1080 seems to be performing better than the prior GTX 980. The GTX 980 launched in September 2014, and its penetration rate among DirectX 12-capable systems appears to have peaked at around 1.45%. Just four months into retail availability, the 1080 hasalready already reached 0.88%.The 1080 is also faring well compared with the 980 Ti. This part launched in June 2015 and held the fort as NVIDIA's top non-Titan GeForce offering until May 2016. Its adoption rate peaked at around 1.39%.

From a pricing perspective, it probably makes more sense to compare the GTX 1080 with the 980 Ti rather than the GTX 980. The 980 Ti made its debut at $649, while the GTX 1080 can be had for as low as $620 on Newegg.com. On that basis, the 1080 looks as though it's enjoying greater adoption than its older counterpart.

GeForce GTX 1070 and 1060 outperform but too soon to call a winner

In the previous generation, the GeForce GTX 970 was the most widely adopted of its graphics processors, with the 960 coming in second. So far, GTX 1060 adoption trails GeForce GTX 1070 adoption, but the month-to-month growth rate of the GTX 1060 in September was much faster.

The GTX 1060 starts at the same price point as the prior-generation GTX 960, though the range is wider thanks to the separate models with 3GB and 6GB of memory, respectively. The GTX 1070, meanwhile, starts at a higher price point ($379 versus $329).

Although I suspect both products will continue to do very well in the marketplace, it might be too soon to call which of these products will ultimately wind up being the No. 1 option for gamers.

Pascal looks like a winner

NVIDIA's mid-range and high-end Pascal-based graphics processors appear to be enjoying fairly fast adoption in the marketplace. I expect that this should translate into solid growth for the company's gaming-oriented graphics processor business over the course of the company's current fiscal year.

Additionally, later this month, the company is expected to release two more graphics products targeted at more value-oriented gamers -- the GeForce GTX 1050 and the GTX 1050 Ti. Though the average selling prices on these products are lower than the Pascal products that the company is currently fielding in the marketplace, the unit and revenue opportunities in these segments are still significant.

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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.