AMD's gaming revenue nosedives 48%, not expected to recover until 2025 — lack of interest in RDNA 3 coupled with fewer console sales

[John Elden Ring]

AMD's gaming solutions revenue decreased by 48% year-over-year in the first quarter of 2024 as sales of the company's processors for Sony's and Microsoft's game consoles declined and demand for Radeon discrete graphics cards lessened. The company expects its gaming revenue to decline further in the second quarter and for the rest of the year before it has a chance to rebound in 2025.

AMD's gaming business earned $922 million in Q1 2024 — down 48% year-over-year (from $1.757 billion) and down 33% quarter-over-quarter (from $1.368 billion). AMD's gaming segment still posted an operating income of $151 million, but that's a significant decline from $314 million a year ago. As a percentage of revenue, the gaming unit's operating income totaled 16% in Q1 2024 and 18% in Q1 2023.

"First quarter semi-custom SoC sales declined in line with our projections as we are now in the fifth year of the console cycle," said AMD CFO Jean Hu on a conference call with analysts and investors (via SeekingAlpha). "In gaming graphics, revenue declined year-over-year and sequentially. We expanded our Radeon 7000-series family with the global launch of our Radeon RX 7900 GRE and also introduced our driver-based AMD Fluid Motion Frames technology that can provide large performance increases in thousands of games."

 

[ethomaz]

Lack of interest in RDNA3?

More like RDNA3 is inferior or equal to RDNA2 in a lot of ways.
So what the point to RDNA2 owners migrate?

 

[Dabaus]

Would it be legal, or even wise, for Sony to make a large investment (Like say 1 billion dollars) into AMD or would it be stupid to permently tie yourself to a single manufacturer like that?

 

[Killer_Sakoman]

Would it be legal, or even wise, for Sony to make a large investment (Like say 1 billion dollars) into AMD or would it be stupid to permently tie yourself to a single manufacturer like that?

They were far behind Intel CPUs, but look at them now. Their GPUs will eventually recover. I would consider investing in them if I was a big tech giant like Sony.

 

[ConcentratedBuffoonery]

Console side you can blame Microsoft, don't think Sony should be thrown into this. PS5 is about to overtake the PS4 any minute now

 

[ToTTenTranz]

The biggest factor is probably the nosediving Xbox sales, but their dGPUs are at fault as well.



They keep stretching out the time between releases of new architectures/families:
- RDNA1 to RDNA2 was 16 months (July 2019 to November 2020)
- RDNA2 to RDNA3 was 25 months (November 2020 to December 2022)
- RDNA3 to RDNA4 will probably be 27 months (December 2022 to March 2025)


What this means is whenever they put out a lemon architecture with power-per-clock problems (like Vega or RDNA3), they're stuck with that problem for a long time, which blasts all the little mindshare they had.


If RDNA3 had that clock-power problem with the backend which even made them cancel a couple of chips and SKUs, then RDNA4 should have never taken this long to come out.
And now, to add insult to injury, they cancelled all the high-end RDNA4 so they're not getting a halo product for probably another 2 years, leaving the 7900XTX their "high-end" GPU for 4 years which is kind of ridiculous.

And the stupidest thing of all is they cancelled a bunch of RDNA4 chips but they're still bringing the half-reduced RDNA4 family way too late. Cancelling chips early and launching fewer new chips should have allowed them to release the later faster, but it isn't.


AMD's Radeon Technologies Group keeps underperforming in their attempts at decreasing development times. That and their obsession with ASP, margins and "value perception" (i.e. "we can't sell our GPUs too cheap or people will value them less") is what's killing their dGPU business.