In a bid to focus on the growing popularity of gaming devices, Advanced Micro Devices Inc. (AMD - Analyst Report) recently launched its new Gamer Series Memory, AMD Radeon™ RG2133 and Radeon™ RAMDisk 4.1.
The newly introduced Radeon RG2133 Gamer Series Memory is ideal for users who need superior performance for gaming. The new XMP and AMP technologies, increased memory, less power consumption as well as lifetime manufacturer's warranty will enhance product performance.
Recently, AMD’s processors have made great headway at gaming console makers and will be used in Sony Corp’s (SNE - Analyst Report) PlayStation 4, likely to be released during the Christmas holidays. Additionally, AMD’s processor will be used in Microsoft Corp.’s (MSFT - Analyst Report) new Xbox video game console, expected to be launched later this year.
Gaming has become a focus area for AMD now. Both the next generation consoles will feature AMD accelerated processing units (APUs), which will boost the company’s business. We believe that these wins have positioned AMD at the center of the console gaming industry and will lessen the company’s dependence on the declining personal computer market. It will possibly help the company to regain some of the lost market share from rivals Nvidia (NVDA - Analyst Report) and Intel (INTC - Analyst Report).
A study conducted by DFC Intelligence suggests that the global gaming market will increase from $67.0 billion in 2012 to $82.0 billion in 2017. Further, IDC estimates that there will be 257 million active consoles worldwide by 2015. These estimates suggest that there are opportunities for companies like AMD to increase their stakes.
The gaming hardware market is currently reeling under competitive pressure from emerging social network sites and competing hardware platforms such as smartphones and tablets. But we expect the hardware sales to increase now because of the upcoming new consoles. Since AMD is designed into all the major platforms it should see good growth from the segment.
AMD delivered decent first quarter 2013 results. The company’s Computing Solutions were down sequentially but the Graphics business did well in the last quarter due to accelerating desktop GPU channel sales, game console royalty sales and workstation graphic sales.
Although the decline in PC demand may affect results in the upcoming quarter, increased game console wins, adoption of new products, new offerings and good execution from the company can help win new customers.
Currently, AMD holds a Zacks Rank #3 (Hold).