After Nvidia’s record-breaking quarter earlier this month, it was clear that the overall gaming market had to be in fairly good shape. New data confirms this trend, both relative to the previous quarter and the same period a year ago. No matter where you look, overall gaming shipments are up — but the gains from those improvements aren’t being spread equally between AMD and Nvidia.
This new information is courtesy of John Peddie Research and has been extensively discussed by Anandtech. First, the general market news — gaming GPU sales have rebounded to an estimated 13 million unit shipments between AMD and Nvidia, with AMD accounting for roughly 3.8 million units compared to Nvidia’s estimated 9.25 million units. That’s the best quarterly performance since 2013 and it arrives while the rest of the PC industry continues to contract. Clearly there’s some truth to the argument that gaming and other high-end boutique products have become the success story of the PC business. It also explains why we’ve seen so many firms trying to push into high-end machines as opposed to refreshing mass market hardware.
JPR also reports that sales of mainstream cards are dropping off compared to higher-end equipment. This has always been expected to some degree, since steady improvements to APU hardware inevitably obviates the graphics cards that used to compete in that space. AMD and Nvidia both refreshed their $100 segments in 2016, but it wouldn’t surprise us if both companies eventually transition to focusing on the $150 and up segment.
One of the most interesting aspects of this report is AMD’s GPU shipments by quarter from 2009 to the present day.
AMD’s unit shipments held fairly steady throughout 2013 but declined sharply thereafter. In Q1 2014, AMD shipped 4.9 million GPUs. In Q2 2015, the company bottomed out at 1.69 million GPUs, a decline of 66%. In February 2014, we worried that the surge in cryptocurrency mining could have catastrophic consequences for AMD’s GPU market share, and in retrospect, that’s precisely what happened.
For those of you who don’t recall: In 2013, cryptocurrency mining and rampant speculation sent GPU prices skyrocketing, just as AMD launched its new Hawaii refresh. This situation took months to settle down, kneecapping AMD’s ability to seed GPUs into the market. GPUs that should have sold for $300 were hitting $500, while $500 cards were up to nearly $1000. While this might have been a price that cryptocurrency miners were willing to pay, the gaming market wasn’t — and since AMD wasn’t behind the increased prices, the company didn’t log any increased revenue off the gouging.
AMD is picking up its own increased revenue thanks to the Xbox One S and PlayStation 4 Pro refresh cycles, but it makes relatively low margins on its console business due to how it structured its royalty payments from Microsoft and Sony. AMD’s total CPU and GPU business revenue (Computing and Graphics) segment was $472 million in Q3 2016. Five years ago, AMD recorded Q3 2011 CPU and APU sales of $1.286 billion, while graphics accounted for $403 million. In other words: AMD’s combined CPU and GPU business, not counting its console revenue, is just 27% the size it was five years ago. We’re glad to see the GPU side of the PC business recovering, but AMD has yet to unveil more information about its Vega launch plans beyond stating it will launch the architecture in the first half of 2017, and right now, high-end gamers are clearly snapping up Pascal hardware, not waiting around to see what AMD can build.