Sony has become the biggest customer of AMD last year, thanks to the success of its PlayStation 5 (PS5). The company accounted for 16% of AMD’s revenue. Though, excluding Xilinx’s performance, Sony alone accounted for 20% of AMD’s revenue. Hence, making Sony the largest customer in the company’s recent history.
Sony’s PlayStation is Driving AMD’s Gaming Business
AMD’s gaming business unit carries the weight of the company’s largest revenue stream. The sales are of system-on-chip (SoC) for both the PS5 and Microsoft’s Xbox Series X|S consoles. AMD’s sold PS5 SOCs worth $3.776 billion to Sony last year. This is 16% of the company’s annual revenue.
The gaming business unit generated $6.805 billion in revenue. While making $953 million in profit last year. This is AMD’s primary source of revenue. AMD’s discrete graphics sales for desktops and laptops are declining. As a result, console SoCs are becoming the primary revenue source for the gaming division.
AMD’s Future Outlook
At the AMD’s most recent earnings call, Lisa Su, chief executive of AMD Gaming shared some points. She said that revenue declined 7% year-over-year to $1.6 billion in Q4 2022. It was due to the lower gaming graphics sales more than offset higher semi-custom revenue. She also said that semi-custom SoC revenue grew year-over-year. This was due to the high demand for game consoles remained strong during the holidays. Gaming graphics revenue declined year-over-year due to reduced desktop GPU downstream channel inventory.
AMD’s SoC sales for consoles may decline in 2023 and beyond. This is because console sales peak in the third year of a console’s lifecycle. This also leads to platform holders renegotiating component pricing. Hence, AMD’s gaming revenue may decline in 2023.
Though, one can also argue about the possibility of PS5 Slim model which may turn things for AMD. Moreover, Sony can order AMD in advance to prepare the chipset for the PS5 Pro. Hence, even though the decline may happen in 2023, the future of AMD is shining thanks to PlayStation. That said, make sure to stick around for the latest tech news.
