AMD's Gaming Revenue Declines Despite Record Overall Growth in 2024

TL;DR: AMD set new revenue records of $7.7 billion in Q4 2024 and $25.8 billion for the entire year, primarily due to its Data Center products and Ryzen CPUs. In contrast, Gaming revenue experienced a staggering decline of 59% year-over-year in Q4, resulting in it becoming the smallest segment of AMD's offerings. Nevertheless, this segment remains profitable.

AMD's strong performance in Q4 2024 can be attributed to several key areas, namely its Data Center products, AI hardware, and Ryzen CPUs, which have excelled in the client market. The company reported record overall revenues of $7.7 billion for Q4 2024, leading to an impressive total of $25.8 billion for the whole year. However, the Gaming segment, which includes Radeon graphics cards for PCs and chips for gaming consoles such as Sony's PlayStation and Microsoft's Xbox, saw a drastic decrease in revenue, falling by 59% year-over-year in Q4 2024.

During Q4 2024, AMD reported Gaming revenue of $563 million, which represents only a third of what the company earned in a similar timeframe a few years prior. Furthermore, the operating income for this segment was $50 million for the quarter, also down year-over-year, indicating limited profit margins for the chips used in contemporary gaming consoles. When taking a broader view of 2024, the total Gaming segment revenue reached $2.6 billion, marking a 58% decline compared to 2023.

Despite the downturn, the encouraging news is that the Gaming segment remains profitable, though it has now become the smallest part of AMD's overall business. Notably, CEO Dr. Lisa Su's summary for the quarter and the year did not mention gaming at all; instead, the emphasis was on the significant profits from the Data Center sector that are fueling the company’s success and future prospects.

"2024 was a transformative year for AMD as we delivered record annual revenue and strong earnings growth," stated AMD Chair and CEO Dr. Lisa Su. "The annual revenue for the Data Center segment nearly doubled due to the accelerated adoption of EPYC processors, and we achieved over $5 billion in AMD Instinct accelerator sales. Looking ahead to 2025, we see clear opportunities for continued growth, driven by the strength of our product portfolio and the rising demand for high-performance and adaptive computing technologies."

The decline in the Gaming segment revenue is largely attributed to a drop in semi-custom revenue, which aligns with the slowing sales of current-generation gaming consoles. Nevertheless, sales of the PlayStation 5 and Xbox Series consoles combined have surpassed 100 million units as of Q4 2024.

AMD also hinted at future developments, noting in its Q4 2024 presentation that the Radeon RX 9070 series, which is powered by the RDNA 4 architecture, is set to launch soon. This new series is expected to offer significantly enhanced ray-tracing performance and introduce new AI-powered upscaling features like FSR 4.

AMD, gaming, revenue