Surging PlayStation 5 sales makes Sony AMD's biggest customer

[Daniel Sims]

In context: Financial reports for the last quarter have shown strong performance from AMD and Sony amid a weak year for the larger tech industry. Contrasting the two reports reveals just how important Sony has been to the chip manufacturer. It may also be possible to extrapolate some Xbox console numbers from the comparison.

In its Q4 2022 earnings report, AMD credited one unnamed customer for about one-sixth of its net revenue for 2022, which increased significantly compared to 2021. A semiconductor industry analyst surmised that Sony was that customer based on its results for the same quarter. AMD provides the chips powering Sony's PlayStation 5 console and Microsoft's Xbox Series machines.

The quarter ending December 31, 2022, was the best ever for PlayStation 5 sales at 7.1 million units. Combined sales for Sony's first three quarters of the fiscal year 2022 (lasting from March through December) reached 12.8 million, bringing the console's lifetime total to 38 million. Sony expects to sell another 6.2 million PS5s before March 31, 2023.

Analyst Sravan Kundojjala said not only does Sony account for 16 percent of AMD's 2022 net revenue, but that number could increase to 20 percent if one excludes AMD's Xilinx, making the PlayStation manufacturer AMD's biggest customer. The chip company admits that the loss of this one customer would measurably affect its business.

Sony accounted for 16% of AMD's revenue in 2022, up from 14% in 2021. 20% of classic AMD (ex-XLNX). Semi-custom peaked in 2022 and will decline in 2023. $AMD $SONY pic.twitter.com/pwmk4j8Xem

— Sravan Kundojjala (@SKundojjala) February 28, 2023

Further analysis from Kundojjala suggests PS5 shipments are over 60 percent higher than those from Xbox. Microsoft stopped publishing Xbox sales numbers a while ago, choosing to focus on subscriptions and digital sales, but everyone estimates that PS5 is easily ahead of it. It just isn't clear how far ahead.

In an earnings call, AMD CEO Lisa Su said the company would expect gaming revenue to be down year-over-year when referring to consoles. This could suggest that AMD expects console demand to peak in 2023 or that console sales exceeded the company's expectations in 2022.

Game console sales are already the likely reason AMD's Q4 2022 gaming revenue came within 11 percent of Nvidia's despite the latter earning much more overall and selling far more gaming graphics cards. That said, Team Green likely also benefits significantly from consoles, as one of its GPUs powers Nintendo's immensely popular Switch. Nintendo sold a million Switch consoles last quarter, bringing the handheld lifetime total to 122 million.

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https://www.techspot.com/news/97785-surging-playstation-5-sales-makes-sony-amd-biggest.html

 

[Julnor]

Predictable, only the biggest manchildren are willing to pay the insane GPU prices and honestly now CPU and mobo prices too. SSDs finally dropped a little but there is price gouging on every component.

Spend $2500+ or $500 just to play video games, even $500 is a bit pricey but the former is just irrational. For most people it's just video games.

 

[shark975]

This is my specialty. ps5 has shipped 32.1m so far not 38m. and interesting they dont note ps5 is well behind ps4 to the same point. ps4 had shipped 37.7 to this same date in it's generation (well, jan 1 2023, our latest quarterly data, vs the same point in ps4's life)

now too be completely fair ps5 is behind ps4 at least party due to supply constraints that ps4 didnt suffer, but it is an interesting point when blogs try to make sony seem super successful that ps5 is well behind ps4.

 

[shark975]

Predictable, only the biggest manchildren are willing to pay the insane GPU prices and honestly now CPU and mobo prices too. SSDs finally dropped a little but there is price gouging on every component.

Spend $2500+ or $500 just to play video games, even $500 is a bit pricey but the former is just irrational. For most people it's just video games.

The consoles remain a fantastic value IMO, long after they normally would be. To get a Radeon 6700 XT class GPU (that GPU is 13.21 TF according to Tech Power Up vs Series X 12TF GPU, and that 13.21 calculation assumes max boost clocks whereas Series X is 12TF all the time so it's probably pretty close match overall +/- a few percent), a 8 core 16 thread (!) Zen CPU, 16GB GDDR, AND a top of the line 1TB SSD and Blu Ray player, power supply etc plus a controller, all prebuilt in a small quiet (at least in Series X case, heh) package for 499 is kind of crazy even 2+ years in.

For most of the consoles life so far just a equivalent GPU would have cost over $500 alone, let alone any of the other stuff.

 

[Watzupken]

This is my specialty. ps5 has shipped 32.1m so far not 38m. and interesting they dont note ps5 is well behind ps4 to the same point. ps4 had shipped 37.7 to this same date in it's generation (well, jan 1 2023, our latest quarterly data, vs the same point in ps4's life)

now too be completely fair ps5 is behind ps4 at least party due to supply constraints that ps4 didnt suffer, but it is an interesting point when blogs try to make sony seem super successful that ps5 is well behind ps4.

It may be behind, but like you mentioned, the supply was trickling in 2020 and 2021. I would think that with GPU prices that high in those couple of years, demand for consoles are actually very high, just that you won't be able to find it being sold at 2x the MSRP. Those couple of years probably set the sales back big time. And now that supply has caught up, you can see this sudden surge in demand for it again due to pent up demand.

 

[neeyik]

If it is Sony accounting for $3.776 billion of AMD's $23.6 billion revenue, then it's worth noting that this is roughly 55% of its Gaming sector revenue (which covers discrete graphics cards, semi-custom SoCs, and development services) of $6.805 billion.

That sector's operating income was just $0.953 billion, an operating margin of 14%, so while Sony is keeping that sector going along almost single-handedly, AMD isn't making enough profit from it.

It also implies that revenue from Radeon graphics cards, Xbox SoCs, and dev services wasn't particularly good.

 

[KofeViR]

The consoles remain a fantastic value IMO, long after they normally would be. To get a Radeon 6700 XT class GPU (that GPU is 13.21 TF according to Tech Power Up vs Series X 12TF GPU, and that 13.21 calculation assumes max boost clocks whereas Series X is 12TF all the time so it's probably pretty close match overall +/- a few percent), a 8 core 16 thread (!) Zen CPU, 16GB GDDR, AND a top of the line 1TB SSD and Blu Ray player, power supply etc plus a controller, all prebuilt in a small quiet (at least in Series X case, heh) package for 499 is kind of crazy even 2+ years in.

For most of the consoles life so far just a equivalent GPU would have cost over $500 alone, let alone any of the other stuff.

The GPU inside PS5 and XSX is more like a Radeon 6600 XT or RTX 2070. 3-4 year old cards and are not really powerful today. XSX is slightly more powerful but it does not really matter in the end. PS5 usually gets more optimization from dev's, which is why many games run and looks just as good. Some runs better on XSX, others on PS5. Most often games from asia region runs better on PS - Resident Evil, From Soft games etc.

Those 16GB RAM is shared between system and GPU as well, meaning RAM allocated for GPU is more like 6GB tops. It's pretty much around 6gb for GPU, 6-8gb for game and 2-4gb for background/os stuff.

The SSD inside PS5 is somewhat high-end, nothing amazing compared to PC standards today. You can easily upgrade the SSD in PS5 and lower the loadtimes with a high-end desktop SSD, you only have 667GB free on PS5 for games, so many upgrade the drive over time.The SSD in XSX is not high-end at all, just a decent cheap OEM drive, which is why they went with 1TB instead of 800GB like Sony, XSX have aprox. 800GB for games in comparison.

What you don't seem to understand is that when you buy a console, you are locked into one ecosystem, and you will pay more and more over the years for games or subscription for online play and unlock of features. You can't compared a console to a gaming PC because of this. Games are always cheaper on PC. You can easily optimize, tweak and mod games, play multiplayer, since OS is open. You can also upgrade a PC easily, if your goal is 100+ fps. Tons of current console games are locked 30 fps and this gets worse and worse as the console ages.

Also, a PC can be used for tons of stuff, not only gaming. Most people use a PC anyway and just have to add a decent GPU, which won't break the bank today - 3060 Ti will beat PS5 easily for 300-400 dollars, even if your PC is 5 years old.

I have PS4 Pro and PS5. I like consoles, but hardware is just weak in general, especially after a few years. Clockspeeds are much lower than desktop. Games are way more expensive and online play and online features needs subscription.

Most people that buy a PS5 for 500 dollars will probably spend 3-4-5 times that in the end, and this is why Sony and MS sells the hardware "cheaper" - To lure people into their ecosystem so they can start making money...

 

[rmcrys]

The GPU inside PS5 and XSX is more like a Radeon 6600 XT or RTX 2070. 3-4 year old cards and are not really powerful today.
[...]
I have PS4 Pro and PS5. I like consoles, but hardware is just weak in general, especially after a few years. Clockspeeds are much lower than desktop. Games are way more expensive and online play and online features needs subscription.

Most people that buy a PS5 for 500 dollars will probably spend 3-4-5 times that in the end, and this is why Sony and MS sells the hardware "cheaper" - To lure people into their ecosystem so they can start making money...

You're right on most things but there are some "but"s there:

- the final result is a sum of a good hardware and a good software. Consoles now are very similar on hardware so the optimization will be extreme. On PCs there are A LOT of different configurations and generations, so the code will be more generic, there is less predictability how fast is the bus, ram, ssd... You also have much more powerful configurations which will have a negative impact on how much time a developer spends on optimization on a PC: why bother, people can upgrade. On a console they have fixed hardware, they have to optimize it to run well there

- on a console the OS, drivers, code is being optimized for that hardware, not a generic code. A little bit as Apple with their hardware and OS versus tones of different hardware and an OS has to work with all. So you for an X amount of hardware power, a console hasta uses it better.

- on a console the RAM usually is somewhat dynamic and developers can adapt the use of it; on a PC a GPU can also use system RAM but that talk is soooo slow that few use it. You are fix to the system RAM and GPU ram for each. Again, the same as Apple versus others.

The nail in the coffin: consoles are much cheaper BUT on the long run they will be much more expensive and the use is just for playing games.

 

[KofeViR]

You're right on most things but there are some "but"s there:

- the final result is a sum of a good hardware and a good software. Consoles now are very similar on hardware so the optimization will be extreme. On PCs there are A LOT of different configurations and generations, so the code will be more generic, there is less predictability how fast is the bus, ram, ssd... You also have much more powerful configurations which will have a negative impact on how much time a developer spends on optimization on a PC: why bother, people can upgrade. On a console they have fixed hardware, they have to optimize it to run well there

- on a console the OS, drivers, code is being optimized for that hardware, not a generic code. A little bit as Apple with their hardware and OS versus tones of different hardware and an OS has to work with all. So you for an X amount of hardware power, a console hasta uses it better.

- on a console the RAM usually is somewhat dynamic and developers can adapt the use of it; on a PC a GPU can also use system RAM but that talk is soooo slow that few use it. You are fix to the system RAM and GPU ram for each. Again, the same as Apple versus others.

The nail in the coffin: consoles are much cheaper BUT on the long run they will be much more expensive and the use is just for playing games.

Yeah. I have had plenty of consoles over the years, and they seem to run worse and worse regardless of optimization because dev's wants to impress users with better and better graphics, while hardware remains the same. This typically mean games run miserable in the last years of a consoles lifetime. Remember GTA 5 on PS3 and XB1? Ran like pure crap because hardware was dated and it came late in the generation. Almost unplayable actually. Fps dips to 10-15-20 many times.

This is the problem with consoles, games might run for longer yes, but they will run worse and worse and you will have no option to upgrade a part, you need a whole new system to get better performance. For most PCs, a GPU replacement is enough in most cases.

Also, a console can easily break. Almost no users are cleaning them and over the years they will run hotter and hotter meaning they will crash/reboot or just run at lower performance because temps get too high. If you actually use a console for 7-8 years many hours per week, chance you need to buy a new one eventually is high. It's very cheap components after all. Cheap motherboard, cheap PSU, almost every single piece of hardware is the cheapest they could find to keep prices down.

 

[kira setsu]

Predictable, only the biggest manchildren are willing to pay the insane GPU prices and honestly now CPU and mobo prices too. SSDs finally dropped a little but there is price gouging on every component.

Spend $2500+ or $500 just to play video games, even $500 is a bit pricey but the former is just irrational. For most people it's just video games.

Depends on what a person considers that money worth.

I cant run trainers in games on ps5 and give them unlimited replayability, or mods, I cant run my old ps1 disc in a ps5, sure I could buy the games again digitally but I already bought them...back in the late 90s.

I cant use an xbox controller with a chatpad, my combo of choice on a ps5, I can even use that fancy dualsense on my pc(those triggers haptics are trippy) and with patience I'll even get its premier titles...and I can still play em in my living room on the couch, choice is wonderful.

Playing games is my hobby so dropping 1 or 2 grand on some parts every few years is fine...imo, for what it allows me to do, gaming and productivity wise, compared to some hobbies, like gearheads, keeping a decently modern pc is cheap, you dont have to run out and buy the newest of the new either.

I dont have a ps5 and dont see one in my future unless another uncharted gets dropped, but for what it is its an amazing machine and truly should make a person pause when considering pc gaming...unless you want to do more than the avg gamer.

 

[AndreV]

"milk" that PS5 into hype, especially now when coincidentally the prices has gone up for most of the world and people don't jump to buy like crazy.

 

[toooooot]

PS5 is better if you replay same games over and over again and dont shy away from selling your finished games.
PC is cheaper if you always play new games and are addicted to heavy modded games.
PS5 is expensive if you dont do what I described above.
And yes GPU prices are the biggest killer of PC gaming.
Their greed is literally destroying their golden goose.

 

[WaltC3]

PCs (laptops, desktops and work stations, and maybe even servers, I can't recall exactly) sell ~25-30M a month, year in and year out. And that's in an off year. They used to sell ~40M a month a few years ago. It's nice to see Console sales in perspective. Also, it's wise to remember that 5/6 of AMD's business isn't dependent on Sony, but that's not that relevant really, except to point out that AMD's business is extremely healthy. If people didn't like the AMD hardware inside the PS5 & the Xboxen they wouldn't be buying and Sony would not be a big AMD customer.

nVidia won the very first Xbox GPU contract, back when Gates was still there, ironically. And then they got the bright idea to sue Microsoft, and Microsoft eventually settled with them and paid them something, but that was the end of any Microsoft/nVidia relationship for consoles. My sense was that Microsoft did not feel nVidia was trustworthy, and that is when ATi got its first xBox contract. And even though many companies submitted bids to Microsoft, including Intel and nVidia from then on, AMD kept the business, I assume, by offering the best deal. And doing it profitably, apparently.

I recall years ago after AMD won the xBox & PS contracts some writer at Ars predicted that AMD was on the way out because it could never compete with Intel. Ironically, the guy never mentioned the xBox & Sony contracts that both went to AMD, after a bidding contest. He didn't think that mattered. The scuttlebutt then was sour grapes that said, "AMD got it because they are losing money with low bids, and they won't last long." It's been fun watching the AMD critics fail so much ever since...

 

[KofeViR]

PS5 is better if you replay same games over and over again and dont shy away from selling your finished games.
PC is cheaper if you always play new games and are addicted to heavy modded games.
PS5 is expensive if you dont do what I described above.
And yes GPU prices are the biggest killer of PC gaming.
Their greed is literally destroying their golden goose.

During mining yes, but console prices peaked as well here.
You don't need a high-end GPU to beat a console. Even a lower-end mid-tier GPU will do.

There is nothing crazy about PS5 or XSX specs.

When done in mass production, with cheap and plastic parts, it's not really expensive for Sony and MS. However they earn the money on subscriptions, games and accesories and not the actual console.

Alot of console gamers spend 1000s of dollars over the timespan of owning a console.
Alot of people breaks several controllers while owning one.
Console break as well. They last way less than mouse/keyboard because joysticks and buttons start to go bad. Especially if you drop / throw it, which many do.
Expensive games.
Expensive accesories (cheaper 3rd party stuff usually suck, unless it's very expensive as well)

So yeah, not really cheap to buy a console when you consider the total cost.