Nvidia on Monday warned its second quarter revenue would drop by 19% from the prior quarter on weakness in its gaming business, sending the chip designer’s shares down about 5% in early trading.

The company reported preliminary results for the second quarter just days after chip maker Intel and Sony Group slashed their annual forecasts on demand concerns.

The gaming industry, largely considered to be recession-proof, is beginning to see some weakness as consumers weigh purchases of discretionary items such as laptops and videogame consoles.

“As we expect the macroeconomic conditions affecting sell-through to continue, we took actions with our gaming partners to adjust channel prices and inventory,” CEO Jensen Huang said in a statement.

Chip makers have been struggling with worsening supply-chain snarls due to the Russia-Ukraine conflict and Covid-19 curbs in China manufacturing hubs.

Nvidia said the gaming unit’s preliminary revenue, which includes sales of high-end graphic cards for desktops and laptops, declined 44% sequentially to $2.04-billion for the quarter ended 31 July.

Last month, Xbox maker Microsoft reported a slump in gaming revenue while PlayStation maker Sony trimmed its forecast on waning consumer interest as a lack of new games and easing of Covid-19 constraints hit gaming demand. — Nivedita Balu, (c) 2022 Reuters