Advanced Micro Devices (AMD) is set to launch new gaming graphics processing units (GPUs) in the third quarter, aiming to expand its RX 7000 family. Despite its efforts, AMD’s gaming GPU market share has been declining, with stiff competition from Nvidia and Intel. The overall gaming GPU market is also facing challenges, with total shipments plummeting in the first quarter. In this article, we explore AMD’s recent performance, its upcoming GPU releases, and the outlook for the gaming segment in the face of tough market conditions.
Declining Gaming GPU Market Share
AMD faces tough competition in the gaming GPU market, with its market share falling to 12% in the first quarter of this year, while Nvidia dominated with an 84% share. Intel has also made inroads, capturing a 4% share. The overall market for gaming GPUs experienced a significant decline, with total shipments down 38.2% year over year in the first quarter. This challenging market landscape has impacted AMD’s gaming-segment revenue, which saw a 4% year-over-year decline and a 10% sequential decrease in the second quarter.
Limited Launch of New Gaming GPUs
Amid the challenging market conditions and the presence of last-gen inventory, AMD has been cautious in launching new gaming GPUs. The current Radeon 7000 series comprises only three graphics cards, including the high-end RX 7900XT and 7900 XTX, as well as the midrange RX 7600. The RX 7600, targeting a high-volume portion of the market, received mixed reviews, and its performance fell short compared to AMD’s last-gen cards, which are now sold at discounted prices. With a significant price gap between the RX 7600 and the RX 7900 XT, AMD has been leaving a substantial portion of the market to its older cards.
Expanding the Lineup with Enthusiast-Class GPUs
AMD plans to address the market gap by launching new “enthusiast-class” RX 7000 graphics cards in the third quarter. This likely includes the RX 7700 and RX 7800 graphics cards. These new GPUs are expected to compete with Nvidia’s latest RTX 4060 Ti, which sells for around $400. The addition of new products in this price range will help AMD fill the void and cater to a broader customer base.
Challenging Outlook for Gaming GPU Business
Despite the upcoming launch of new gaming GPUs, AMD expects the third quarter to present challenges for its gaming GPU business. The company anticipates a decline in the gaming segment on both year-over-year and sequential bases. The semi-custom portion of this segment typically performs well during the third quarter due to holiday season preparations, but this year’s outlook suggests a weak performance for the gaming GPU business.
Conclusion
AMD’s announcement of new gaming GPUs reflects its efforts to stay competitive in the market. The declining gaming GPU market share and challenging overall market conditions have been major hurdles for the company. Despite the upcoming launch, AMD anticipates a difficult third quarter for its gaming segment. As AMD prepares to release its new enthusiast-class GPUs, it remains to be seen how the market will respond and whether it will help AMD regain its position in the highly competitive gaming GPU market.
