PS5 & Xbox Series X|S Sales Have Seen A Decline In 2024
Sales of both Sony and Microsoft’s current-gen consoles, the PS5 and Xbox Series X|S, have seen a decline in the year 2024.
In the Q1 2024 Earnings Call for Advanced Micro Devices (AMD), it was revealed that gaming segment revenue in the quarter was $922 million, down by 48% year-over-year and 33% sequentially due to a decrease in semi-custom revenue/sales (PS5 and Xbox Series X|S) and lower AMD Radeon GPU sales. The segment primarily includes discrete GPUs, SoC products and development services.
Furthermore, during the Q&A session that followed the Earnings Call, an analyst asked whether the client and traditional data center offset the decline in the gaming segment, if not more. In her response, AMD CFO Jean Hu stated that, in general, it is more that the data center GPU revenue has ramped, which will be more than the company’s overall $207 million ramp.
The analyst noted that this meant the gaming segment revenue must be down by a lot, if client and traditional data are all up. Hu agreed, mentioning the demand for gaming has been quite “weak”. She added that this is quite very well known, and also highlighted both PlayStation and Xbox’s inventory problems. Based on her estimate, the second half of the year will have lower gaming revenue than the first half. At the same time, she mentioned that gaming’s gross margin is lower than the company average.
Based on Hu’s statements, it appears that AMD expects sales of the PS5, Xbox Series X|S, and its own GPUs to decline throughout the year owing to a drop in demand. In terms of consumption, a lot of players continue to play live service titles like Fortnite, Minecraft, GTA Online, and Call of Duty Warzone on previous-gen consoles and low to mid-spec PCs. Despite newer hardware being readily available, there are many who have yet to upgrade and are likely not interested as long as they’re able to play their favorite games.
