AMD Achieves a Notable Gaming Landmark - Yet, Could Console Demand be Slowing Down?
The console gaming market is showing signs of a slowdown, according to AMD CEO Lisa Su and industry data. In a recent report, Su expects gaming revenue for AMD to decrease from the previous quarter, but the decline will be less severe than other parts of AMD's business.
This trend is reflected in the fiscal year reports of major companies like AMD and Sony, as well as broader industry data. Sony, for example, has announced a price increase for PlayStation 5 consoles in the U.S. starting August 2025, citing the challenging economic environment as a key factor. The new prices are $549.99 for the regular PS5, $499.99 for the Digital Edition, and $749.99 for the PS5 Pro.
Market analytics show trends consistent with a slowdown, especially in console sales. Japan’s console market saw a 3.1% decline in 2024 compared to the previous year, attributed in part to the lifecycle of the Nintendo Switch and a weaker slate of premium releases. This decline is expected to continue in 2025. Similarly, the East Asian gaming market, including Japan and South Korea, is projected to shrink by about 2.3% in 2025.
AMD, a key hardware supplier in gaming consoles and PCs, has signaled during its fiscal disclosures that growth in the console segment is plateauing amidst broader market softness. This fits the pattern of slower sales momentum reported by Sony and reflected in regional market analyses.
Despite these short-term challenges, industry forecasts remain cautiously optimistic about recovery and growth in the medium term. Niko Partners predicts a rebound in the East Asian market starting in 2026, with moderate growth expected through 2029. The overall global gaming market, driven largely by mobile gaming, is anticipated to grow substantially from $62.8 billion in 2024 to $87.4 billion by 2029, even though console growth is slower.
In 2023, Sony sold 20.8 million PS5s, but the company is forecasting to sell 18 million PS5s during the 2024 fiscal year. AMD's gaming revenue was down 59% year over year in the fourth quarter of 2024, earning $563 million. However, Su expects gaming revenue in Q1 to be down a little less than the corporate average due to inventory normalization.
The rise of new handheld gaming PCs using semi-custom AMD processors could usher in a new era of gaming. AMD makes custom chips for the Sony PlayStation 4, PlayStation 5, the latest Xbox consoles, Asus ROG Ally, Lenovo Legion Go, Acer Nitro Blaze, and Steam Deck. These semi-custom processors power most gaming consoles on the planet.
In conclusion, the console sector is experiencing a noticeable slowdown in 2025. However, this slowdown is part of a broader market adjustment rather than a permanent downturn, with growth expected to resume in the coming years.
