So do high-end gamers matter to Nvidia & ATI or not?

[silent tone]

http://biz.yahoo.com/fool/041105/1099674300_2.html

I was under the impression that the OEM market was the 1 true master of each company's performance.
Nvidia released their earnings report friday, stock jumped 15% - why?

Dominance in the high-end market, and a loss in the OEM market. Not only that, but last quarter profits were down 80% year-over-year, and this quarter they are up 400% year over year.

 

[sandorski]

Probably because they have quite slipping. ATI will probably maintain their better Marketshare for awhile yet, but Nvidia has hit their bottom and are on the way up once again. That's my guess.

 

[phisrow]

I've been told that the high end market is something of a symbol/indicator of the OEM low/midrange market. Barring the bottom feeders(Intel extreme2, SIS, &c.) the midrange is effectively decided by cut down versions of Nvidia and ATI's last generation high end stuff. There aren't enough hardcore gamers to matter much; but I imagine that investors think that if Nvidia does better this year among the people who really, really care, next year there will probably be plenty of Nvidia silicon going into the OEM market.(As in, for example, the fact that ATI was looking really good back in the Radeon 9700/9800 days, and now they are pretty much the most popular chipsets on gaming laptops.)
Obviously this doesn't hold true all the time, and I'm quite sure that there are exceptions, especially at the low end, where it is pretty much a pricing knife fight(hence Intel actually being the largest player in graphics); but I am led to believe that the battle for the high end not infrequently ends up deciding the low and midrange of the subsequent time period.