AMD is losing the discrete video card market like never before

In the first quarter of 2024, AMD’s gaming revenue fell 48% year-over-year due to lower demand for Radeon discrete graphics cards and lower sales of chips for PlayStation and Microsoft consoles. The company predicts that its gaming revenue will continue to decline until 2025 when there is an opportunity for recovery.

AMD took in $922 million in gaming graphics card sales, nearly half of last year’s Q1 of $1.757 billion and down 33% from the previous quarter ($1.368 billion). Operating profit for AMD’s gaming segment was $151 million, but that’s down significantly from $314 million a year ago. Gaming solutions accounted for 16% of total revenue in Q1 2024 and 18% in Q1 2023.

Chips for Microsoft’s Xbox Series X|S and Sony’s PlayStation 5 are believed to account for the lion’s share of AMD’s gaming business. These consoles have been on the market for five years, so demand for them is falling.

Desktop PC component sales decline seasonally in the first quarter of each year. Although AMD increased market share in the fourth quarter of 2023, controlling 19% of the market according to Jon Peddie Research, the company sold significantly fewer graphics cards in the following quarter. Laptop solutions have the same impact as desktop solutions, as they sell in roughly the same numbers.