In a recent earnings call, AMD revealed a staggering 48% decline in its gaming revenue year-over-year. This drop has fueled rumors that AMD may be abandoning the high-end graphics card market, with whispers of a potentially unreleased high-end card that the company chose to shelve in favor of focusing on the mainstream segment.
Overall, AMD’s gaming revenue in the first quarter of 2024 fell by 48% compared to the same period in 2023 and by 33% compared to the previous quarter. AMD’s CFO, Jean Hu, attributed the decline to a decrease in Radeon GPU sales. Despite the upcoming RDNA 4 lineup, AMD does not anticipate an improvement in the situation.
Hu stated, “Year over year, we expect our data center and client segment revenue to be up significantly, driven by the strength of our product portfolio; [and we expect] the embedded and gaming segment revenue to decline by a significant double-digit percentage.”
AMD’s decision to view the decreasing volume of its gaming business as a positive development stems from the company’s recognition that datacenters and AI represent the true sources of revenue. However, this news is disheartening for gamers who favor AMD products.
In recent months, the popularity of AMD GPUs has experienced fluctuations. A report from Jon Peddie Research indicated that AMD’s discrete graphics card market was performing well in the fourth quarter of 2023, with a substantial increase in shipments. AMD’s market share even reached 19%. However, these gains may not be sustainable in 2024.
The impending release of RDNA 4 GPUs may not be sufficient to significantly boost AMD’s gaming GPU revenue this year, despite the expected launch of Zen 5 processors.
Despite the increase in shipments, AMD GPUs remain less popular among gamers compared to Nvidia’s offerings, as evidenced by the Steam Hardware Survey. The survey, while representing only a fraction of the PC gaming market, overwhelmingly favors Nvidia GPUs.
AMD’s gaming revenue may appear bleak, but it is likely not as dire as it seems. Consumer products are generally less expensive to produce, and AMD’s significant profit margin in its enterprise business makes it unlikely that the company will abandon the gaming market entirely. However, speculation abounds.
As RDNA 4 GPUs become available and RDNA 5 transitions from conjecture to reality, the industry may gain insights into AMD’s long-term plans for its gaming GPUs. For the sake of gamers, AMD’s continued presence in the market is desirable, as it fosters competition with Nvidia.
