The traditional view has been that game consoles are beneficial to AMD's overall revenues, but that their contribution is relatively small. However, it turns out that this is not quite true. In fact, Sony's PS5 alone will account for 16% of AMD's revenue in 2022, and Sony and Microsoft's consoles combined will account for a quarter of its revenue.

This is according to AMD's official application (opens in new tab) (via Tom's Hardware (opens in new tab))." We had one customer that accounted for 16% of our consolidated net revenues for the year ended December 31, 2022. Sales to this customer consisted of product sales from our gaming segment," the filing clarifies.

The only such customers are Sony and the PS5 (open in new tab), which has marginally outperformed the Xbox series. Of course, AMD is not only responsible for the PS5 APU, but also produces chips for Microsoft's Series X and S consoles (open in new tab).

Overall sales estimates for both consoles to date put Sony's PS5 in the range of roughly 30 to 32 million units, while the MS series consoles are just over 20 million units.

AMD has not disclosed details of Microsoft's console-specific revenues, but based on these figures, if the 30+ million console chips represent 16% of AMD's business, with another 20+ million representing roughly 10%, then together 25% of AMD's revenues Together, 25% of AMD's revenue comes from these game consoles. Add in the Steam Deck, which is powered by chips from Red Team's semi-custom silicon division, and this is a conservative estimate.

AMD's overall gaming sales, including both console chips and PC GPUs, fell 7% in 2022. We know that PC GPU sales declined dramatically last year (open in new tab), so the overall relatively modest 7% decline reflects strong sales of console chips, with AMD CEO Lisa Su noting that "demand for gaming consoles remained strong during the holiday period Semi-custom SoC sales increased year over year due to strong demand for game consoles during the holiday period," said Lisa Su, CEO of AMD.

However, these revenues will likely decline after 2023 as both Sony's PS5 and MS series consoles mature.

Incidentally, AMD generates $6.8 billion in revenue from gaming chips, $6 billion from data center chips, $6.2 billion from PC processors, and $4.5 billion from embedded chips.

The $6 billion from data centers in 2022 will be double what AMD earned in 2021. In other words, AMD's fortunes are now rapidly shifting from laptops and desktops, including gaming rigs, to data center hardware and consoles.

This inevitably happens in cycles. CPU and GPU sales have plummeted after a hugely popular upgrade cycle. For gamers who have purchased Nvidia RTX 30 series (open in new tab) or AMD RX 6000 series GPUs (open in new tab), Intel 12th generation CPUs or AMD Ryzen 5000 series chips in the last few years, especially with graphics card prices soaring Given this, the latest hardware is definitely not a big convincing factor.

At any rate, good old fashioned gaming PCs seem to be a minority business for AMD right now. It is a somewhat uncomfortable position for PC gamers who want better future hardware at lower prices.