Nvidia released its second-quarter financial earnings today that beat Wall Street’s expectations. The company reported that its overall revenue from graphics card processors was up 10 percent year-over-year, and earnings per share were above expectations.

The non-GAAP earnings equated to about 34 cents per diluted share on revenues of $1.15 billion, versus previous consensus estimates of 10 cents per share on revenues of $1.01 billion. Those earnings were up 13 percent year over year.

The biggest negatives: The cost of the Shield console recall and restructuring costs after dropping its Icera modem line. Nvidia couldn’t find a buyer for that business. The company paid $24 million in legal fees for its lawsuit against Samsung and Qualcomm, which also hurt the bottom line.

The company reported second-quarter earnings were up 5 percent year over year, mostly driven by growth in GeForce GTX GPUs for gaming PCs. That product line was up 51 percent year over year, even though built-in OEM graphics chip business was down. The company said it expects revenue to stay roughly stable for the next quarter and gross margins, currently hovering around 56 percent to 57 percent, to remain steady.

Chief executive Jen-Hsun Huang said in the Nvidia earnings call that the company is optimistic about the upcoming year, with growth in games, hardware, and automotive applications.

“The second half of the year we’re going to see some really solid games,” he said, citing Call of Duty, Star Wars, Assassin’s Creed, and Metal Gear Solid releases. “4K (display TV technology) is here. Windows 10 is great. And the Skylake [chip] platform by Intel is going into production now. [Virtual reality] will go into production in the second half of the year. Each of these drivers are pretty large scale. My expectation is that gaming, and high end gaming in particular, is going to grow nicely.”

Tegra processor sales were down about 20 percent to $128 million, and enterprise and HPC/Cloud sales were also down. The company’s patent license agreement with Intel brought in about $66 million, the same as last year.

Huang said he felt NVidia is strongly positioned to help in three key areas in addition to gaming/eSports:

virtual reality, including work the company is doing to collaborate with Oculus and Valve;

exascale computing, boosted by President Barack Obama’s executive order last week to build a supercomputer 30 times faster than any currently on the planet;

and automotive applications, including both infotainment screens in the car and sensor-fusion image processing to guide autonomous and semi-autonomous cars. (Think warnings when someone has stopped ahead or lane-changing assistance.)

“What I’m most impressed with on Nvidia’s earnings is the further proof that the PC gaming market is insulated from a homogeneous consumer PC market,” said analyst Patrick Moorhead of Moor Insights & Strategy. “PC gaming is big, and if this isn’t proof to the doubters, they will never believe. Next quarterly earnings will be interesting, in that it will be the first test of AMD’s Fiji [GPU].”