Sony becomes AMD’s largest customer, PlayStation 5 brings huge revenue to AMD

Last year, Sony became AMD’s largest customer, accounting for 16% of the latter’s revenue, and it’s clear that a significant portion of this revenue is from the strong sales of the PlayStation 5. According to some semiconductor industry analysts, if AMD excludes the revenue increase from the acquisition of Xilinx, Sony’s business will account for approximately 20% of AMD’s revenue, making it AMD’s largest customer in recent times.

Documents submitted by AMD to the US Securities and Exchange Commission (SEC) show that in 2022, AMD sold chips worth approximately $3.776 billion to Sony for the latter’s PlayStation 5 game console. In fact, the gaming division is AMD’s largest source of revenue, which to some extent reflects the significant sales of Microsoft’s Xbox Series X/S game console as well.

According to Sony’s previous data, the global cumulative sales of PlayStation 5 have reached 32 million units, while third-party statistics show that Microsoft is not as successful as Sony, with shipments of Xbox Series X/S at approximately 20.68 million units.

AMD’s gaming division is responsible for selling desktop and laptop GPUs, as well as semi-custom SoCs for game consoles. In 2022, its revenue was $6.805 billion, with a profit of $953 million, making it one of AMD’s main sources of revenue. Given that the unit sales of AMD’s standalone graphics cards have declined in recent quarters, the contribution of semi-custom SoCs for game consoles has played a significant role in maintaining high revenue.

The problem that AMD faces now is that game console revenue typically reaches its peak in the third year, and manufacturers typically renegotiate component pricing during this period. This means that the revenue from the PlayStation 5 and Xbox Series X/S may decrease in the near future.

Previously, AMD CEO Dr. Lisa Su had stated that due to the cyclical nature of the gaming console industry, the company expects a year-on-year decline in gaming revenue. For AMD, the strong performance of its EPYC server processors means that its data center division may become its main source of revenue in 2023.