AMD’s gaming revenue experienced a significant downturn, dropping by 48% year-over-year in the first quarter of 2024, following a decline in demand for gaming consoles and reduced interest in Radeon discrete graphics cards. The company anticipates further revenue decreases in the coming quarters, suggesting that recovery won’t happen until at least 2025.
This sharp decline raises questions about the future of AMD’s GPU roadmap, with speculation surrounding the launch of the Radeon RX 8000-series. Although AMD has yet to confirm or deny these rumors, the steep reduction in gaming revenue indicates a challenging environment for the company’s gaming segment.
Consoles and Discrete GPUs Face Challenges
The decline in AMD’s gaming revenue is partly attributed to lower demand for processors used in Sony’s PlayStation 5 and Microsoft’s Xbox Series X|S. These consoles are now in their fifth year on the market, leading to a natural decrease in demand. Moreover, the declining sales of discrete GPUs, particularly those targeting desktop systems, further contributed to the revenue drop.
In Q1 2024, AMD’s gaming segment earned $922 million, down from $1.757 billion in Q1 2023 and down 33% from the previous quarter. The segment still posted an operating income of $151 million, but this figure represents a substantial decline from $314 million a year earlier. This trend indicates that AMD’s gaming business faces significant headwinds.
The Uncertain Future of RDNA 4
The lack of solid information about RDNA 4-based Radeon RX 8000-series GPUs adds to the uncertainty. Given the weak performance of the RX 7000-series and ongoing challenges in the gaming industry, there’s speculation that AMD might delay or scale back the RDNA 4 launch. Some reports suggest that the company could target mainstream and budget markets instead of competing in the high-end space, leaving Nvidia to dominate that segment.
For more information, visit Tom’s Hardware, which provides a detailed analysis of AMD’s gaming revenue decline and the broader context of the PC components market.