AMD’s Gaming Sector Faces New Challenges: Will 2024 Bring More Setbacks?


This webpage was generated automatically. To view the article in its original setting, you can follow the link below:
https://finance.yahoo.com/news/amds-struggling-gaming-business-could-100200039.html
Should you wish to take this article off our site, please reach out to us


Many things are progressing positively for Advanced Micro Devices (NASDAQ: AMD) at present. The firm has been increasing its market share in the PC CPU sector, its server CPUs are performing well, and its AI accelerators have swiftly evolved into a multibillion-dollar enterprise.

Conversely, the gaming sector tells a different tale. AMD’s gaming revenue plummeted 69% year-over-year in the Q3 2024, landing at only $462 million. For context, the data center division generated $3.5 billion in revenue for the same quarter.

Two factors are influencing this situation. To begin with, AMD manufactures semi-custom chips for the leading gaming consoles. The existing generation of consoles finds itself in the later stages of their life cycles, so it is understandable that demand has declined.

This revenue stream is expected to rebound within the next few years, contingent upon when Sony and Microsoft unveil new consoles. The forthcoming consoles will probably utilize AMD chips.

Secondly, AMD is trailing significantly behind Nvidia in the gaming GPU segment. Although AMD does not release specific figures for gaming GPU revenue, the firm indicated in its earnings call that sales in gaming GPUs fell year-over-year in Q3. The firm partially attributed this decline to the impending release of its next-generation graphics cards, yet Nvidia succeeded in rising its gaming revenue during its latest quarter in spite of also preparing new products.

AMD’s forthcoming Radeon RX 9000 series graphics cards may assist in enhancing gaming revenue upon their debut in the first quarter; however, the company will be competing against Nvidia’s newly launched RTX 50 series graphics cards. Nvidia’s latest products feature advanced AI-driven technology, and there is scant reason to assume AMD’s competitive position will significantly improve within the more expensive segments of the market where Nvidia usually excels.

Historically, AMD has been much more competitive in the lower tiers of the market, where prices remain under $300. The RX 7600 card is AMD’s latest budget offering, even though older graphics cards like the RX 6600 are still readily available. Nvidia has largely overlooked this market segment — even the four-year-old RTX 3060 continues to retail for approximately $300.

As AMD competes with Nvidia at the high end, an unexpected resurgence from Intel (NASDAQ: INTC) will present significant rivalry in the low-end arena. Intel made its entry into the graphics card market in late 2022 with the Arc Alchemist series, but software complications hampered the initiative. The firm persisted, and its second-generation Battlemage cards boast much greater capabilities.


This page was created programmatically; to read the article in its original location, please follow the link below:
https://finance.yahoo.com/news/amds-struggling-gaming-business-could-100200039.html
and if you wish to remove this article from our site, kindly contact us

Leave a Reply

Your email address will not be published. Required fields are marked *