Lower Xbox and PlayStation sales see AMD's Gaming revenue drop by 31%

AMD has released its financial results for Q2 2026, with the company's second quarter revenue hitting a record $11.5 billion, driven by its Data Center segment. AMD's Data Center revenue reached $6.7 billion, which was more than double the same period last year, with the company citing strong demand for its AMD EPYC processors and AMD Instinct GPUs as the main reason. Translation: AI.

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When it comes to the consumer side that most of us know, that is the home of Ryzen and Radeon, AMD's Client and Gaming segment revenue hit an impressive $3.8 billion, which was up 6% year-over-year. And that's impressive because the Gaming slice of this segment saw its revenue drop by 31% compared to the same period last year, to $779 million.

Although it doesn't go into full details on the 31% drop, AMD cites "lower semi-custom revenue" as the main reason. AMD's semi-custom Gaming business covers the chips it makes for PlayStation 5, Xbox Series X|S, Steam Deck, Steam Machine, and other gaming devices that combine custom Ryzen and RDNA architecture.

However, when you look at the recent financial reports from Sony and Microsoft in relation to PlayStation and Xbox sales, the 31% drop lines up with lower console sales. For the three months ending June 30, 2026, PlayStation 5 sales declined by 36% compared to the same period last year, hitting 1.6 million. Although Microsoft doesn't provide sales figures for Xbox Series X|S consoles, Xbox hardware revenue decreased by 29% for the same period compared to last year, with the company citing a "lower volume of consoles sold" as the reason.

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Question #1

How much did AMD's Gaming segment revenue fall in Q2 2026 and what portion of Client and Gaming revenue did it represent?

AMD's Gaming segment revenue fell 31% year-over-year in Q2 2026 to $779 million. That represented about $779 million of the Client and Gaming segment's $3.8 billion in revenue, roughly 20.5 percent.

Answered

Question #2

Which products did AMD cite as driving the Data Center revenue surge in Q2 2026?

AMD cited strong demand for its AMD EPYC processors and AMD Instinct GPUs as driving the Data Center revenue surge in Q2 2026. This surge was tied to AI demand.

Answered

Question #3

What explanation did AMD give for the 31% drop in Gaming revenue?

Click to reveal answer

Question #4

How do Sony and Microsoft console reports align with AMD’s stated decline in semi-custom revenue?

They line up: Sony reported PlayStation 5 sales fell 36% year-over-year to 1.6 million for the quarter ending June 30, 2026, and Microsoft reported Xbox hardware revenue fell 29% year-over-year, attributing the drop to a lower volume of consoles sold. These declines in console sales correspond with AMD citing "lower semi-custom revenue" as the main reason for its 31% drop in Gaming segment revenue.

Answered

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As for AMD, right now the "strong demand for AMD Ryzen processors" is keeping its Client and Gaming segment revenue in the green, so to speak, alongside its Ryzen AI line-up. Broadly speaking, with Data Center revenue showing no signs of slowing down, AMD is predicting its Q3 2026 revenue to hit around $13 billion, which would represent year-over-year growth of around 41%.