AMD's Gaming Revenue Experiences Significant Decline in 2024

TL;DR: AMD achieved record revenue of $7.7 billion in Q4 2024 and $25.8 billion for the year, driven by its Data Center products and Ryzen CPUs. However, Gaming revenue fell by 59% year-over-year in Q4, making the gaming segment the smallest part of AMD's portfolio. Despite this, AMD's Gaming segment remains profitable.

In Q4 2024, AMD reported impressive financial results, achieving an overall record revenue of $7.7 billion. For the entire year of 2024, AMD's revenue reached $25.8 billion, setting a new milestone for the company. However, this success was largely attributed to the performance of data center products and Ryzen CPUs, as the company's Gaming revenue took a significant hit, declining by 59% year-over-year during the fourth quarter.

To break it down, AMD's reported Gaming revenue for the quarter stood at $563 million, which is only a third of what it was at the same time a few years ago. This decline is mirrored in its annual Gaming segment revenue of $2.6 billion, representing a 58% drop compared to 2023. Furthermore, the operating income for the Gaming segment also experienced a decrease, falling to $50 million for the quarter. This suggests limited profit margins on chips used in the latest gaming consoles.

Despite the downturn, it is worth noting that AMD's Gaming segment remains profitable, although it has now become the smallest segment of the company's overall business. Notably, during her remarks for the quarter, CEO Dr. Lisa Su did not highlight gaming but rather focused on the record profits from the Data Center segment. "2024 was a transformative year for AMD as we delivered record annual revenue and strong earnings growth," said Dr. Su. She emphasized the accelerated adoption of the EPYC processors as a key factor in the company’s success.

As for the Gaming segment, the losses are primarily linked to a decrease in semi-custom revenue, which aligns with the slowing sales of the current generation of gaming consoles like the PlayStation 5 and Xbox Series X/S. Even though current-gen console sales have surpassed 100 million units by Q4 2024, the decline in AMD's revenue indicates some struggles in capturing a larger share of this market.

Looking forward, AMD is preparing to introduce the Radeon RX 9070 series, which is based on its RDNA 4 architecture. This new series promises enhanced ray-tracing performance and features AI-powered upscaling through FSR 4, suggesting future potential for recovery in the Gaming segment.

AMD, gaming, revenue