Friday, August 12, 2022

AMD drove the PS5, Xbox and GPUs from a loss in 2020 to a likely billion in 2022

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Today, for the first time, we learn just how big AMD’s gaming business is — and the answer is $5 billion a year. That’s how much the company made in 2021 from the “semi-custom” chips that go into Sony’s PS5, PS4, and every modern Microsoft Xbox, in addition to the discrete GPUs you’ll find in graphics cards and high-end gaming laptops.

It also appears to have turned into a pretty profitable venture — nearly $1 billion in revenue in 2021 — and could exceed that this year: In an earnings call, CEO Lisa Su says the company usually gets most of its money from game consoles in the third quarter. and it’s on track for “record semi-adjusted annual sales in 2022.”

In 2020, AMD actually lost $138 million in gaming… but in just one year, operating income increased by more than a billion dollars to $934 million in 2021. At the end of 2021, Sony started making a profit on the PlayStation 5, although Sony still has delivery restrictions; Microsoft generally doesn’t make a profit on the Xbox itself, although AMD almost certainly would as a chip supplier.

This quarter, AMD’s gaming revenues are up 32% year over year.

Gaming revenue for 2021: $5.6 billion.

That’s all according to the company Profit 2nd quarter 2022, as you can see in the slide above. As we mentioned in May, this is the company’s first quarter to expand gaming into its own financial segment: previously, game console revenues were lumped together with embedded and data center, and GPUs were lumped together with CPUs.

AMD plans to launch its RDNA 3 GPUs later this year; they will use 5nm chiplets and AMD’s promising “more than 50 percent generation improvement in performance per watt.” While AMD says it’s now seeing demand for gaming graphics slow — PCs in general are slowing, BTW — it expects another launch to improve demand in the fourth quarter.

Gaming is now AMD’s second largest company after its “client” business (desktop and notebook processors), although its data center business is also currently blowing up. It is currently up 83 percent year over year.

Embedded now includes Xilinx, a company that AMD acquired in February.

This is how much AMD’s revenues are growing overall.

Record quarter over quarter sales, now up to $6.6 billion.

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