AMD's Gaming Business: A Rocky Road Ahead in 2025

AMD's gaming business is facing a challenging year in 2025, with several factors contributing to a potential decline in revenue and market share. The company's gaming segment, which includes both discrete GPUs and semi-custom chips for game consoles, is expected to face significant headwinds in the coming months.

One of the primary factors driving AMD's gaming revenue decline is the maturation of the current console cycle. As the PlayStation 5 and Xbox Series X|S approach their fifth year on the market, demand for these consoles is waning, leading to reduced orders from console manufacturers. This decline in console sales is in line with AMD's projections for the fifth year of the console cycle (Hu, 2024). Additionally, the sales of Radeon discrete graphics cards have lessened, contributing to the overall decline in gaming revenue. This decrease in demand is not limited to AMD, as the entire graphics card market experienced a seasonal decline in the first quarter of 2024 (Jon Peddie Research, 2024).



Another factor impacting AMD's gaming revenue is the limited design wins for laptop GPUs. Despite the introduction of the Radeon RX 7900 GRE and AMD Fluid Motion Frames technology, the Radeon RX 7000 series has not significantly improved AMD's market share or sales. The RX 7000 series has had little impact on surveyed gamers on the Steam platform, with only the Radeon RX 7900 XTX appearing in the top 100 most popular GPUs list (Steam Hardware Survey, 2024). This lack of market penetration, combined with the absence of significant design wins for laptop GPUs, has further impacted AMD's gaming revenues.

Rumors also suggest that AMD may not launch high-end RDNA 4 GPUs this year, focusing instead on the mainstream and budget markets. This decision could further limit AMD's ability to compete with Nvidia in the high-end GPU segment, where Nvidia currently dominates (AMD, 2024). The lack of high-end RDNA 4 GPUs, combined with the weak sales of the Radeon RX 7000 series, could lead to a further decline in AMD's gaming revenue in 2025.



To improve its gaming business in the long term, AMD can consider several strategic moves. First, the company should invest in developing high-end GPUs with cutting-edge features, such as advanced ray tracing and AI-powered technologies. This could help AMD capture a larger share of the high-end GPU market and increase its overall gaming revenue. Additionally, AMD should work closely with console manufacturers to ensure its chips remain competitive and continue to be chosen for future console generations. Expanding laptop GPU market share through aggressive pricing and competitive products could also help AMD offset declining desktop GPU sales.

In conclusion, AMD's gaming business is expected to face significant challenges in 2025, with declining console sales, weak demand for discrete GPUs, and limited design wins for laptop GPUs contributing to a potential revenue decline. To improve its gaming business in the long term, AMD should focus on innovating in the high-end GPU market, strengthening its console business, and expanding its laptop GPU market share. Despite these challenges, AMD's other segments, such as data center and client computing, are expected to report strong growth, driven by the AI chip ramp, solid demand for EPYC server CPUs, and a rebound in PC demand. However, the gaming segment's decline may still offset some of the growth from these other segments, leading to a mixed bag for AMD's overall financials in 2025.