Gaming sales are down ‘a lot’ says AMD as PS5 and Xbox demand drops further

The power of the PS5 is slowing down (Picture: Sony)

As the gaming world looks doomed to a quiet year in 2024, chip company AMD has highlighted a significant drop in demand.

With sales of the PlayStation 5, Xbox Series X and Nintendo Switch on the decline, the entire games industry feels like it’s primed for a slump over the next year; especially as there are so few big name games scheduled for the second half of 2024.

Sony has already ruled out the chances of any ‘major’ first party titles before April 2025, while Nintendo’s 2024 line-up has suddenly become barren, as it prepares to launch its Switch successor – which is expected to arrive early next year.

The general decline has been highlighted in a financial report from semiconductor AMD, who provide the graphics chips for the Xbox Series X/S and PlayStation 5. They state that their own gaming revenue is down 48% in Q1 2024, compared to the previous year.

Speaking in an analyst call (via VentureBeat), AMD chief content officer Jean Hu highlighted how gaming demand is down ‘a lot’ – with business in the second half of the year set to be even worse in light of the declining sales of the PlayStation 5 and Xbox Series X/S.

‘If you look at gaming, demand has been quite weak,’ Hu said. ‘That’s well known. Also [they have] inventory issues. We guided down more than 30% in the first and second quarters, and the second half will be lower than the first half. That is how we are looking for the gaming business this year.’

While AMD’s overall revenue increased to $5.5 billion (£4.4bn) year-over-year, this 2% growth was held back by lower revenue in the gaming and embedded segments of its business.

Essentially, it’s another sign that the upheaval seen in the gaming industry over the past few months looks set to continue, as publishers try to find ways to counter the growing costs of making modern games.

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Various factors have contributed to the decline in console sales, including aging hardware and the ongoing cost of living crisis.

There’s also the problem that people are increasingly sticking with long-established live service games, over buying new titles, with a recent report suggesting that the majority of the most-played game are five years old or more.

That in turn makes live service games seem even more attractive to publishers, even though the success rate of new titles is very low.

Looking to the future, it’s unclear whether this will be a brief downturn or a long term issue for the industry, although the launch of the Switch 2 and GTA 6 next year should give a major boost to the market.

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