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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.