No big surprise here, the graphics card companies are being hit by the poor economy and slowing consumer demand. Just like everyone else:

According to the report, the discrete graphics card market started to shrink in the second quarter of 2008, in which sales of graphics cards were 6.7 per cent down on the same period in 2007. However, graphics card sales then nosedived towards the end of the year, with sales in the fourth quarter of 2008 plummeting by 42.7 percent when compared with the same period in 2007.

The folks behind this report (JPR) are quick to also state:

The research firm notes that sales of PCs and workstations dropped by around ten percent in comparison, but emphatically states that this doesn’t mean that chipsets with integrated graphics have been encroaching on discrete graphics cards’ territory. JPR notes that the market share from integrated graphics in the fourth quarter of 2008 was 40.6 percent, which was only marginally up from the 40.2 percent in the same period in 2007. I

via bit-tech.net | Graphics card market shrinks by 42.7 percent.