Today, we’re learning how big AMD’s gaming business is for the very first time — and the answer is $5 billion a year. That’s how much the company earned in 2021 from the “semi-custom” chips that go into Sony’s PS5, PS4, and every modern Microsoft Xbox, in addition to its discrete GPUs you’ll find in graphics cards and high-end gaming laptops.
It appears to have become quite a profitable business, too — nearly $1 billion in revenue in 2021 — and could exceed that this year: in an earnings call, CEO Lisa Su says the company typically sees its most money from game consoles in the third quarter, and it’s on track for “record semi-custom annual revenue in 2022.”
In 2020, AMD actually lost $138 million on gaming… but in just one year, operating income rose by over a billion dollars to hit $934 million in 2021. Late 2021 is when Sony started turning a profit on the PlayStation 5, though Sony still has supply constraints; Microsoft generally doesn’t turn a profit on the Xbox itself, though AMD almost certainly would as a chip supplier.
This quarter, AMD’s gaming revenue is up 32 percent year over year.
That’s all according to the company’s Q2 2022 earnings, as you can see in the slide above. As we mentioned in May, this is the first quarter that the company’s broken out gaming into its own financial segment: previously, game console revenue was lumped in with embedded and data center, and GPUs were lumped in with CPUs.
AMD’s planning to launch its RDNA 3 GPUs later this year; they’ll use 5nm chiplets, and AMD’s promising “more than 50 percent generational improvement in performance per watt.” While AMD says it is seeing the slowdown in demand for gaming graphics now — PCs in general are slowing down, BTW — it expects that a new launch will improve demand in the fourth quarter.
Gaming is now AMD’s second-biggest business after its “client” business (desktop and notebook processors), though its data center business is currently blowing up, too. It’s currently up 83 percent year over year.