AMD CEO Lisa Su has a sobering wake-up call about the video game industry.
As reported by VentureBeat, Lisa told investors that their gaming business is down, on both consoles and PC parts.
AMD makes CPUs and GPUs for the consumer PC gaming market, and also manufactures custom APUs for the PlayStation 5 and Xbox Series X and S. One of AMD’s newest products is their AMD Ryzen Z1 chips, which powers PC gaming handhelds like the ASUS ROG Ally and Lenovo Legion Go. But they also make the chips powering the Steam Deck, a custom Zen 2 RDNA 2 APU. To sum it all up, AMD has a big, nearly dominant presence in the PC gaming market for chips.
Lisa says their gaming business has been down “a lot” for this year. She elaborated:
“If you look at gaming, demand has been quite weak. That’s well known. Also [they have] inventory issues. We guided down more than 30% in the first and second quarters, and the second half will be lower than the first half. That is how we are looking for the gaming business this year.”
Lisa also gave some figures. Year on year, gaming revenue was down 48 % to $ 922 million. She also specified that their gaming GPU market is also down. This, even after launching their AI powered gaming GPU, the AMD Raden RX 7900 GRE, and the release of AMD Motion Frames technology, which improved performance across multiple games, on multiple platforms.
There may be some understandable reason for AMD seeing no growth in PC gaming, at least. While AMD launched the technically superior Zen 4 microarchitecture in 2022, most gamers have chosen to stay on Zen 3. This has created a strange situation, in that AMD remains the most popular CPU brand over Intel, but AMD isn’t seeing money from it.
The story for consoles and PC gaming handhelds is a bit more ominous. On one end, it’s partly understandable that the console business is down. Interest is not as high as in previous years, for both PlayStation and Xbox, because most of the gamers who wanted a console would have managed to get one by now.
For PC gaming handhelds, including the Steam Deck, enthusiasts do have to face the reality check that these high performant, expensive consoles, cater to a small niche. The success these devices have seen is partly in anticipation of broader mainstream adoption.
But when a company like Sony or Valve says that they are selling PlayStation 5s or Steam Deck OLEDs very well, that doesn’t necessarily benefit AMD either. They may still be selling stock they already manufactured, and have AMD chips that they bought before this quarter, or even the last year.
As a result of this bad business, Lisa is now talking up their pivot to AI, which has raised the company’s fortunes to profit. Gamers don’t really have to care about the business side of gaming, but perhaps we should acknowledge this as the sign of the struggles in the industry, that is the reason we continue to see layoffs and cancelled games.
