AMD's gaming division experienced a significant downturn in the second quarter of 2026, with revenue falling by 31% compared to the previous year. The segment generated $779 million in Q2 2026, a decrease from $1.1 billion in Q2 2025. The company cited "lower semi-custom revenue" as the primary cause, indicating reduced sales of consoles during the period. This decline occurred despite the launch of products such as the Steam Machine and the AMD Radeon RX 9070 GRE in June 2026.
While the dedicated gaming business contracted, AMD's overall Client and Gaming segment saw a 6% year-over-year increase, reaching $3.8 billion. This growth is largely attributed to the increasing adoption of AMD processors in modern laptops, particularly in the budget segment. Although the earnings report does not specify individual product sales, it is presumed that sales of lower-cost laptops with limited RAM contributed significantly to this segment's positive performance.
Despite the struggles in its gaming division, AMD reported substantial overall revenue growth. The company's total revenue for the last quarter reached $11.5 billion, a 51% increase year-over-year. This surge is primarily fueled by the burgeoning artificial intelligence market. AMD's data center business saw particularly impressive growth, bringing in $6.7 billion, a 107% increase over the prior year.
Looking ahead, AMD anticipates its gaming business may continue to shrink as it capitalizes on the AI boom. The company's strategic focus may shift away from gaming hardware, especially with recent reports suggesting price increases for gaming hardware from both AMD and Nvidia. This trend could further diminish the priority of gaming components in AMD's future product strategies.