Average selling price of GPU's dropped 25 percent, also

Nvidia's CEO Jen-Hsun Huang indicated during a financial earnings call that a 20% reduction in GPU shipments were to blame for the company's poor quarter two results.

It was the first quarter in nearly six years where Nvidia posted a loss and the mood on the call was understandably sombre. The loss amounted to $120.9 million and compares to $172.7 million of profit recorded a year earlier – that’s quite a turnaround, but it wasn’t unexpected.

This comes following the announcement of higher-than-expected failure rates on some of its notebook GPUs last month, where Nvidia said it would take a $200 million charge to cover warranty repairs – the company also coughed up $196 million to cover this. When asked, Huang said that the situation is now under control and he believes there won’t be any more charges relating to this problem.

Huang blamed the drop in revenue on a number of factors, ranging from economic slowdown, a large inventory of 65nm chips to an over-priced product lineup that was put down to underestimating the competition from AMD.