AMD is facing a sharp decline in gaming revenue that is expected to continue through 2025 due to lower demand for graphics cards and chips for consoles.
Gaming failure
Gaming revenues fall
AMD's gaming revenues fell by 48 in the first three months of 2024 % compared to the same period last year. The reason was a decrease in demand for discrete Radeon video cards and a decrease in sales of chips for PlayStation and Xbox game consoles. The company predicts a further decline in gaming revenue in 2024, with the possibility of recovery only in 2025.
Sharp decline in sales
AMD revenue from video cards for games amounted to $922 million, which is almost half as much as $1.757 billion in the first quarter of 2023 and a third less than in the fourth quarter of 2023 ($1.368 billion). Despite operating income of $151 million, this was a significant decline from $314 million a year earlier. The share of revenue from gaming solutions fell from 18% in the first quarter of 2023 to 16% in the first quarter of 2024.
Fall of the console market
As noted by AMD CFO Jean Hu, sales of semi-specialized chips for gaming console sales have declined as the Xbox Series X|S and PlayStation 5 consoles enter their fifth year of life cycles. In the gaming graphics space, AMD's revenue also declined sequentially year over year. The company expanded its Radeon 7000 series lineup with the introduction of the Radeon RX 7900 GRE and introduced AMD Fluid Motion Frames technology to improve performance in thousands of games.
Seasonal decline in the PC market
Sales of desktop components traditionally fall in the first quarter of each year. Despite increasing market share to 19% in the fourth quarter of 2023, AMD sold significantly fewer graphics cards in the following quarter. The situation is similar in the laptop market, where sales volumes are comparable to desktop PCs.
Glossary
- AMD (Advanced Micro Devices) is an American multinational company that develops computer processors and other technologies.
- Radeon is a family of AMD graphics processors for desktops, laptops and game consoles.
- Xbox Series X|S is a line of gaming consoles from Microsoft, the successor to the Xbox One.
- PlayStation 5 is an eighth-generation gaming console from Sony.
- RDNA 4 is the next generation AMD GPU architecture.
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Why did AMD's gaming revenue decline in the first quarter of 2024?
How does AMD assess the prospects for the gaming segment in 2024?
What is the dynamics of sales of chips for Xbox and PlayStation consoles?
What factors influence sales of AMD Radeon discrete graphics cards?
Is AMD planning to release new RDNA 4 generation graphics cards to stimulate sales?
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Discussion of the topic – AMD is losing shares in the gaming video card market: revenues fell by 48%
According to AMD, in the first quarter of 2024, the company's gaming revenues decreased by 48% compared to the same period last year. This is due to a drop in demand for discrete Radeon video cards and a reduction in sales of chips for PlayStation and Xbox game consoles. AMD expects its gaming revenues to continue to decline before it has a chance to recover in 2025.
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