AMD experienced a strong Q1 2026, as reported earlier today. However, a significant challenge looms for the PC and gaming segments, casting a dark shadow. The company, according to CEO Lisa Su, expects a tougher second half of the year due to the rising costs of memory and other components. This is projected to lead to lower PC shipments and a drop exceeding 20% in AMD’s gaming revenue compared to the first half of the year. Is the concept of “PC gaming” slowly fading, and is no one in the industry concerned?
Answering this question is not straightforward for AMD, and it certainly doesn’t imply that Ryzen or Radeon products are underperforming for users. On the contrary, AMD highlights its strong performance in desktops and laptops, with the Ryzen 9000X3D, Ryzen AI, Ryzen AI PRO 400, and Ryzen AI MAX driving its product lineup, while Radeon GPUs are holding their ground against NVIDIA. The core issue lies in the cost of assembling the final product – the very PC you dream of and desire.
AMD Foresees Another Downturn in the PC Gaming Sector and is Already Approaching Half of Last Year’s Revenue
This morning’s report revealed that in Q1 2026, AMD’s Client and Gaming segment generated $3.94 billion. This represents a 23% increase year-over-year, though it is also a 9% decrease from the previous quarter. In essence, while the annual picture remains positive, the quarter-on-quarter trend indicates a decline.
The Client segment, encompassing Ryzen processors for desktops and laptops, continues to be robust, without a doubt, outperforming Intel for another quarter. AMD states that Ryzen PRO sales to end-users grew by over 50% year-over-year, bolstered by increased presence in systems from Dell, HP, and Lenovo. The company also notes a better product mix in laptops and growing commercial adoption. According to Lisa Su:
“On the desktop front, we strengthened our Ryzen lineup, including our latest X3D processors, which offer leading performance in gaming, content creation, and professional workloads. We also introduced the Ryzen AI 400 and Ryzen AI PRO 400 for desktops, expanding our AI PC offering in consumer and commercial systems. In mobility, we achieved strong growth driven by a richer product mix, while shipments of Ryzen 400 mobile PCs increased and commercial adoption grew.”
So… Where is the Problem and the Drama?
The key issue emerges later in the year. Lisa Su, as AMD’s CEO, acknowledges that Ryzen demand will remain solid in Q2 2026, but also makes it clear that the second half of the year will be more challenging for the PC market, stating:
“We are planning for lower PC shipments in the second half due to the increased cost of memory and components.”
The Gaming segment will likely face the most significant and painful blow for AMD. This division, which includes Radeon GPUs and consoles, saw a sequential decline of 15% in Q1 2026. Furthermore, AMD expects gaming revenue in the second half of the year to drop by more than 20% compared to the first half.
“We believe gaming demand in the second half will be impacted by the increased cost of memory and components, and we are planning the business accordingly.”
Jean Hu, AMD’s Chief Financial Officer, quantified this warning:
“We now expect gaming revenue in the second half to fall more than 20% compared to the first half.”
Memory thus emerges as the most troublesome factor for the PC gaming sector in 2026. CPUs, GPUs, laptops, consoles, and entire systems depend on a component whose price has increased due to the demand from Artificial Intelligence and data centers. For AMD, the product itself is performing well, no doubt. However, the problem is that consumers will have to pay more to enter, purchase, and upgrade. Given the current economic climate, this is a hurdle many are unwilling to clear. Therefore, AMD’s projected decline in gaming revenue appears more like a prophecy than a mere market analysis.
