AMD’s gaming revenue has taken a steep downturn, plummeting by 48% year-over-year in the first quarter of 2024. This significant decline is attributed to a combination of reduced console sales and lackluster demand for Radeon discrete graphics cards. According to the company’s projections, the trend is expected to continue throughout the year, with recovery not anticipated until 2025.
Quarterly Revenue Falls by Almost Half
In the first quarter of 2024, AMD’s gaming revenue reached $922 million, a steep drop from $1.757 billion a year earlier, representing a 48% decline. Additionally, quarter-over-quarter, the company saw a 33% decrease from Q4 2023’s $1.368 billion. Despite the decline, AMD’s gaming segment still recorded an operating income of $151 million, but that’s less than half of the $314 million earned in Q1 2023.
The company’s CFO, Jean Hu, pointed to the aging console cycle as a primary reason for the downturn. “First quarter semi-custom SoC sales declined in line with our projections as we are now in the fifth year of the console cycle,” Hu explained. This suggests a reduced demand for AMD’s processors for Microsoft Xbox Series X|S and Sony PlayStation 5, leading to decreased gaming revenue.
A Weak Quarter for Discrete GPUs
The discrete GPU market saw a similar decline, with AMD’s Radeon RX 7000-series experiencing weaker sales. According to market research by Jon Peddie Research, AMD held a 19% share of the discrete GPU market in Q4 2023, but this number fell in Q1 2024. Seasonal downturns are typical for this segment, but AMD’s lack of significant design wins for its Radeon RX 7000M GPUs for laptops exacerbated the decline.
While AMD’s Radeon RX 7900 GRE was introduced to help boost the 7000-series lineup, it wasn’t enough to significantly impact overall sales. AMD anticipates a 30% year-over-year drop in its gaming solutions revenue for the first half of 2024 and even lower results in the second half of the year.
Prospects for Radeon RX 8000-Series RDNA 4
With the ongoing decline in gaming revenue, there are doubts about AMD’s plans to launch the Radeon RX 8000-series RDNA 4 GPUs this year. The company’s cautious outlook on gaming revenue suggests that new hardware releases may not occur soon, potentially delaying a major rebound.
For a detailed analysis and further information, visit Tom’s Hardware, where you can find additional insights into AMD’s gaming revenue and the factors contributing to its downturn.