AMD Targets Game Consoles To Soften Blow From PC Weakness

If buzz on the web is to be believed, then Microsoft (MSFT) will use an AMD (AMD) processor, which combines the Jaguar CPU with a graphic chip, to power its next generation Xbox game console. Though the news has yet to be confirmed by either of the two companies, these rumors led to a near 15% rise in AMD’s stock price, which has lost more than 60% of its value during the last year.

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aviator1892477d ago

If the new consoles (720 and ps4) really do end up selling very well, I can definitely see amd benefiting immensely, especially when nvidia isn't involved.

Seeing as how microsoft's pc business is also on the line with the surgence of tablets and smartphones, they probably want to take the next xbox as seriously as they can. I'm really hoping they hit the ground running with their next xbox (along with the ps4). In the end, gamers are the winners, imo.

decrypt2477d ago

AMD wont benefit much, reason being they wont be making much from console sales. Consider how cheaply the consoles are being sold, Mid range GPUs sell for about 300usd thats almost the price of a console. Hence no AMD isnt making much on console sale.

Rather as time goes on since new tech wont be required for console AMD will not be able to charge higher for a newer chip. Rather console makers will be squeezing them for lesser prices.

As a matter of fact the slow down on the PC market is caused by consoles. This is because consoles act as the lowest denominator. Since console tech doesnt improve for years(cycles have gotten longer now). Games are made for 7 year old hardware.

Since games are made for such old hardware even PC gamers no longer need to upgrade as often. Hence the blow is felt by AMD and Nvidia, not only in the GPU business but also in the CPU, MB and RAM.

Now console gamers may disagree with this, however evidence is in the pudding, never before in history was it possible to play games near max settings on 6 year old hardware. 8800GTX is a testament to the slowdown in the industry, Even today this 6 year old GPU is still capable of playing BF3 in 1080p. This was impossible before the current gen. Reason being games used to graphically advance due to no consoles holding PC back.

Hence in the end this ends up hurting Nvidia and AMD too. Previously a PC gamer would be upgrading every 2 years, that is not the case any more. They dont need to upgrade just like console gamers dont need to upgrade. Console gamers once they buy a console, they keep playing on the same tech for all gen long. That means AMD cant sell to them again. Not as long as their console is still working.

Hence essentially what has happened is, they slowed the market down with consoles, causing their PC base to stop upgrading. Now instead of getting business from PC gamers every 2 years, they see the same business every 5 years and all of us know console business doesnt repeat for 7 years.

Now some may argue they will sell alot of chips on console, well not really. even if you combine all the console makers you are talking about 30 million chips a year which isnt a huge deal for a company like AMD considering they just slowed down all of their PC business meaning not just the GPUs ie CPU, MB, RAM etc.

Conclusion by supporting consoles, they have literally axed their own feet.

Zcarnut2477d ago

Assuming your theory is true, wouldnt it also mean that the PC upgrade market may rebound once the next consoles arrive?...And may remain that way at least 2-3 years into the consoles lifespans?
I think theres another thing to consider you didnt touch base on. The economy. I believe if it didnt go into the dumper, we would have had PS4's and 720's for some time by now. Which would mean the PC market would have moved forward as well.

zebramocha2477d ago (Edited 2477d ago )

@decryt Really?consoles act as the lowest common denominator to PCs and not the myriads of components that could be put in a pc,how do you no and isn't making money on console?going by a post on neogaf Sony and Ms has to put money up on the design for their custom APUs and that doesn't account royalties they pay to amd.

hellvaguy2477d ago

"AMD wont benefit much, reason being they wont be making much from console sales"

How do you personally know this? DO you have insider info or just making up total and complete b.s.? I'm going with the latter, since none of what the profits are were made public. Also, I do recall MS and Sony stating that their consoles are sold at a loss for the first few years, meaning they subsidize them. Duh they goes your cheap console price theory.

Presenting you make believe theory as fact, with no facts at all, just makes you sound stupid.

Dojan1232477d ago

Good points. However, with PS4 moving to a PC based architecture, it will allow developers to build games with less non-PC considerations which holds PC back. This should push the pc gamer getting better / more powerful options that could bring back the every 2 year need/want to upgrade.

shutUpAndTakeMyMoney2477d ago

yeah console gamers think amd will make billions form ps4. But they probably won't. Nvidia made 500M in 7 years from ps3. But they made 1.2 billion already this year.

koehler832477d ago

I expect AMD will be making a negligible return on console hardware.

I do think they'll benefit by being the defacto standard to which games are made, having a huge impact for them in their PC market.

We've been seeing a lot more studios put more focus on AMD chipsets lately, likely due to heavy investment from AMD themselves. We're about to see every studio put more focus on AMD chipsets.

Longsama2477d ago

If the game developers who make the games that recquire you to upgrade your system didn't have their console sales to support them they'd probably go out of business because the pc market represents such a small percentile of their revenue.

hesido2476d ago (Edited 2476d ago )

"Even today this 6 year old GPU is still capable of playing BF3 in 1080p."

I don't necessarily think this is a bad thing for the consumer. We are past the point of 8bit 2d graphics. Game developers can already convey all sorts of nuances through graphics. Photo-realism can wait, and we get to keep our dollars in our pockets.

Having to upgrade your gfx card every few years may be exciting for some, but I don't think everybody needs that bleeding edge technology.

With consoles, the technological jumps are in bigger steps (>10x more power every gen), with PC, the jumps are in smaller but much more frequent steps (~2x every generation but every few years) so it somehow balances out.

Meanwhile the longer a fixed hardware is used, the better it is utilized, while a bleeding edge PC hardware can only be utilized to some degree due to developers having to cater to bottlenecks of different kinds of hardware.

DeadlyFire2476d ago (Edited 2476d ago )

AMD will be making a large sum of cash. Why?

1. Stock. All good signs of business going well and with multiple big partners = pluses to the size of that stock. Now three consoles are tied to that stock.

2. NVIDIA didn't make much money with its perioud of making a GPU alone for the ONE console. AMD is making a GPU for 3 as well as a CPU/APU combo for two of the three!!! So its profit is triple + CPU sales.

Each individual sell doesn't effect AMD much. Its Sony, Microsoft, and Nintendo buying the parts that they earn the most cash from.

Sure console ports slow down PC gamers upgrading, but it expands the exposure of PC games to more computers and more players as well which leads to more PC gamers. You are only looking at half the picture. At least this new generation is pushing close to 2 Tflops. PS3/X360 in comparison use about 350-400 Gigaflops or so in their GPUs.

dcbronco2476d ago

Decrypt I think you're underestimating market ups. Retail prices and wholesale prices are very different. AMD has to make a profit, the parts manufacturer has to make a profit. With the consoles they are basically a hired gun. Consultants. They are also licensing their tech. Sony and MS then have to take the designs out and get them made themselves.

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Arai2477d ago (Edited 2477d ago )

Several large PC manufacturers (Dell, HP, etc etc) have voiced themselves that the PC market has shrunken....which was brought up at investor meetings.

I don't know who targeted who, in the end I think it was a wise decision for the console makers to go with AMD.
Price/performance ratio of their GPU's is great, especially their 7000 series.

Roccetarius2477d ago (Edited 2477d ago )

I don't know about AMD's GPU's anymore. Both the 6970 and 7970 failed for me. I know hardware isn't perfect, but i expect at least 2 - 3 years time before it bites the dust.

I just decided to say fuck it, then i looked for a Nvidia GPU. I've never had problems with them before, but their recent hardware leaves me in doubt.

Longsama2477d ago

This just seems like good business to me, I mean if i could have my product in every major gaming device on the market I feel pretty damn accomplished...I just don't see how anyone could look at that as a negative

Agent_hitman2477d ago

Good business decision for AMD.. too bad for Nvidia and Intel, since majority of techie people are buying ARM based tablets and smartphones.. I heard that PC sales are poor lately..

DeadlyFire2476d ago

PC sales shouldn't be poor really. Most people rely on a PC as a primary or 2ndary device regardless of console choice. Being a gamer on the PC takes education. Most general consumers simply lack the effort or knowledge to reach out to it. The future is bright with APUs coming around the corner though.

Even budget retail boxes with a good APU in it should offer 1 Tflop GPU power on the CPU. Which will help PC gaming in a big way. Intel Haswell has 1 Tflop GPU power and AMD's new APU in the PS4 push 1.8 Tflops. In another year or two we could see heavy PC cores + GPU power exceeding PS4 in an APU. When this happens it will shift PC sales forward. As any retailer can sell a gaming PC. No longer will people need an education on hardware or the need to buy a graphics card just to play. Even so that doesn't mean cards will stop coming. They still sell quite a bit of them.

pissed9992477d ago

nvidia was right about ps4. Not worth effort.

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