AMD's start to 2024: Big gains in client and data center, big falls in gaming

Reporting on the financial statements from multi-billion dollar companies isn't our usual fare but when the company in question has a huge impact on the world of PC gaming, it's worth paying attention to how well things are going. AMD's revenue and operating income for the first quarter of 2024 have been announced and it's great news for its big processor sectors but not so great for its gaming division.

In terms of financials, AMD organises everything into four primary sectors: data center, client, gaming, and embedded. Every Ryzen processor made earns money for the client sector, whereas sales of Radeon GPUs and custom chips for consoles and handheld PCs are recorded in gaming.

Throughout the second half of 2022 and the first half of 2023, the client division was losing money quite badly, but for the last six months, things have steadily improved. Compared to this time last year, client revenue has improved by 85% and the operating income has gone from a loss of $172 million to a profit of $86 million. It's a similar story with data center, which has enjoyed gains of 81% and 268% in revenue and operating income, compared to the first quarter of 2023.

In an earnings call, CEO Dr Lisa Su explained why it was doing so well: «The substantial year-over-year growth was driven by the strong ramp of AMD Instinct MI300X GPU shipments and a double-digit percentage increase in server CPU sales.»

What isn't doing so well is AMD's gaming division. Revenue is down 33% compared to the previous quarter and 48% compared to 2023; operating income is down by a similar proportion. The bulk of that sector's money comes from the contract with Sony to design and manufacture the processor for the PlayStation 5. Microsoft has the same kind of deal for its Xbox Series X/S machines, and among all of those are Radeon GPUs.

The PS5 was launched back in November 2020, so the console is past the peak of its sales and while the much-discussed PS5 Pro will probably give AMD a little bit of a