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|29th May 2013, 07:26||#1|
Join Date: May 2010
AMD’s Xbox win valued at $3 billion
AMD has scored all three major console design wins, Microsoft’s Xbox One, Sony’s upcoming Playstation 4 and Nintendo’s gimmicky Wii U. The wins should help AMD weather the storm in the PC market, although the actual value of the deals was a source of much speculation.
However, thanks to former AMD employee Bob Feldstein we now know that the Xbox One deal is worth more than $3 billion, reports Gamespot. It is hardly pocket change for AMD, as the company’s revenue last quarter was $1.09 billion. The Xbox deal will generate cash over the course of at least a dozen quarters, probably even more.
In any case it will help AMD’s bottom line, especially if the Wii U and PlayStation deals are on a similar scale, which they probably are. Of course, it will take a few months for the deals to kick in. The Xbox One is coming this summer, along with the PS4. Although the console wins could generate a couple of hundred million in quarterly revenue, it is worth noting that console chip margins tend to be quite low.
Feldstein is currently Nvidia’s VP of technology licensing and it is worth noting that Nvidia practically ceded the console market to AMD. The company apparently crunched some numbers and decided that it stood to gain more from the mobile market, hence it shifted its R&D efforts to Tegra.
The fact that it is also entering the console market with the Shield means that it would probably have a hard time peddling console chips to the likes of Sony and Nintendo, who have a lot to lose in the handheld market if Nvidia’s challenge proves successful.
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