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Console market is where usually the chip maker in second or third place tries to make a play for their business because console makers are basically assured sal

Console market is where usually the chip maker in second or third place tries to make a play for their business because console makers are basically assured sales but they will have strange requirements. PS3 XBOX360 and Nintendo Wii were all IBM chips . They tried a bunch of new architectures but for the most part developer ergonomics was horrible. So for the PS4 and XBOX One they decided they needed regular computer parts. I'm sure AMD and Intel may have put bids on it but AMD would be the one that would have been extremely motivated to make sales to Microsoft and Sony. As time goes on you can make higher and higher margins since the chips don't change (but on the other hand we are seeing console revisions within the traditional generation). But, I think that the margins will keep on increasing.

vvanders 9y ago
Those margins are usually baked into the contract and decrease over the lifetime of the console. At least that's how I've heard it told with people who were in the know.
- ZenoArrow 9y ago
  I'd suggest those people "in the know" are probably talking out of their arse. It's commonplace for consoles to go through a number of hardware revisions over the lifetime of the console. These revisions are rarely made for performance reasons, but instead would be made to improve reliability, security and manufacturing cost. Setting aside security (which is would be done as reaction to a hack that can't be patched with software), the whole idea is to increase the margins for the manufacturer. Note that the brand owner may, in some cases, sell consoles at a loss, but the manufacturer is very unlikely to be working to the same business model.
  - vvanders 9y ago
    Eh, I've been in the consumer electronics space a while and it's pretty common for a SoC/CPU vendor to offer a time-based tiered price as a part of a procurement contract. As your chip goes from cutting edge process technology($$$) to mid-tier($$) and commodity($) they usually pass that savings along, otherwise they would incentivize going for a mid-cycle refresh and suddenly a large revenue stream for your chip dries up as a product moves to a (potentially) different vendor.
    - ZenoArrow 9y ago
      > "as a product moves to a (potentially) different vendor." The only other manufacturer of x64 CPUs in Intel, and the only other manufacturer of (competitive) GPUs is Nvidia. Why would Microsoft or Sony incur the high NRE cost to switch to two different suppliers mid-cycle just so they can shave a small amount off their unit cost? That's not to say AMD wouldn't pass on some of the savings to Microsoft and Sony, I'm sure they would, but it's not likely to be a one-sided deal.
      - vvanders 9y ago
        The same reason you fight tooth and nail for pennies on the BoM, because at scale every cent matters. There's also the inverse where if the jump to the next chip is small(see XB One/S/X) you may migrate early and EoL a product before planned leaving a chip production line with no product. You also always have multiple vendors bidding so if one of them offers a sliding scale you're going to use that as leverage against the other vendors.
        ZenoArrow 9y ago
        > "The same reason you fight tooth and nail for pennies on the BoM, because at scale every cent matters." It doesn't matter if the potential savings are sunk by the NRE costs of shifting to new vendors before the projected end of the product. You have to look at cost holistically.
        vvanders 9y ago
        Well, duh ;). When you're talking 15M+ units being able to drop $1-2 from BOM is a huge motivator for things like this. When you get into the millions of dollars worth of savings you can fund a lot of engineering time. They also may never go through with the switch but use it as leverage for a better deal. Back when I did SoC evals we'd take products right up to the brink of production just to apply pressure. It was almost like a game of chicken between 2-3 vendors to see who blinked first and gave us a better BoM/deal on the core chip. These weren't easy bring-ups but usually were vastly different GPUs + CPU combos. It's very much a thing that happens, at least back when I was involved with stuff like that ~6 years ago.
  - magila 9y ago
    Protip: When you accuse people of talking out of their arse, don't then proceed to talk out of your arse.
    - ZenoArrow 9y ago
      Protip: When you disagree with someone, try to offer more than just an ad hominem. If you disagree with something I've said, by all means explain why.
      - magila 9y ago
        I'm not trying to start a debate here. It's obvious from your posts that you don't have any particular knowledge of AMD's console dealings, or even console dealings in general. You only speak to generalities which are well known among even casual observers of the industry. None of what you've said specifically refutes the original claim. I know you don't have any grounds to speak with any authority on the matter, and you know it too if you're honest with yourself.
        ZenoArrow 9y ago
        > "I'm not trying to start a debate here." Interesting. > "It's obvious from your posts that you don't have any particular knowledge of AMD's console dealings, or even console dealings in general." I never claimed to. > "You only speak to generalities which are well known among even casual observers of the industry. None of what you've said specifically refutes the original claim." It's precisely because these market generalities do not match with what was proposed that I called it into question. Developing new silicon is a risky endeavour. Even going from one process node to a smaller process node without changing the design architecturally is fraught with problems, resulting in lower yield until the manufacturing kinks are worked out. Why would a chip manufacturer agree to a deal where they're expected to take on increased risk for a lower reward? It makes no business sense. That's what I was calling into question. > "I know you don't have any grounds to speak with any authority on the matter, and you know it too if you're honest with yourself" I may not personally know the same people vvanders knows, but I can put myself in the shoes of a businessman running a chip manufacturer. I enjoyed debating with vvanders, and aside from leaving out the dig at the people they know in the industry, I'd do it again.
dralley 9y ago
Well, there's motivation on AMD's part, but they also have a value proposition that nobody else could have matched. They can provide both the CPU and GPU on one chip, which simplifies the console designs pretty dramatically. More compact, easier to cool, etc. Intel graphics solutions were (and remain) sub-par, and Nvidia has no x86 solutions (and their ARM chips would have been underpowered).
- kimixa 9y ago
  I don't know if an ARM chip really would be underpowered - remember the consoles are using the ultra-low-power jaguar cores. Probably not a million miles away from an A57, or whatever denver-based core NVidia could pull out of the bag.
  - jrs95 9y ago
    It definitely wasn't underpowered for the Switch. And they managed to get Skyrim and Doom running on that. I'd imagine they could do even better performance wise in a traditional console rather than kind of a portable hybrid.
    - CydeWeys 9y ago
      The Switch is definitely underpowered compared to the other games consoles though (and certainly compared to PCs). Reviews consistently mention that it's underperforming its competitors in frame rates, graphics quality, etc. Heck, it doesn't even do 1080p in all modes of play. A lot of that has to do with it being a handheld hybrid, as you point out, but these compromises would have been a lot harder to stomach if it had been a dedicated set-top console like its direct competitors.
      - danudey 9y ago
        The Switch has sold almost half as many units in the last 10 months as the Xbox One has in the last five years. If the only concern is resolution and not quality or gameplay, then the Switch doesn't stack up, but I think the sales numbers point to the Switch being a smash hit with consumers so those compromises seem stomachable from my perspective. (Anecdotally: I wish the graphics in BotW were better, at least in terms of draw distance, but then I take the Switch out of the dock and take it to work to play Mario Kart with my coworkers and it seems like a fine tradeoff to me.)

vvanders 9y ago

Those margins are usually baked into the contract and decrease over the lifetime of the console. At least that's how I've heard it told with people who were in the know.

ZenoArrow 9y ago
I'd suggest those people "in the know" are probably talking out of their arse. It's commonplace for consoles to go through a number of hardware revisions over the lifetime of the console. These revisions are rarely made for performance reasons, but instead would be made to improve reliability, security and manufacturing cost. Setting aside security (which is would be done as reaction to a hack that can't be patched with software), the whole idea is to increase the margins for the manufacturer. Note that the brand owner may, in some cases, sell consoles at a loss, but the manufacturer is very unlikely to be working to the same business model.
- vvanders 9y ago
  Eh, I've been in the consumer electronics space a while and it's pretty common for a SoC/CPU vendor to offer a time-based tiered price as a part of a procurement contract. As your chip goes from cutting edge process technology($$$) to mid-tier($$) and commodity($) they usually pass that savings along, otherwise they would incentivize going for a mid-cycle refresh and suddenly a large revenue stream for your chip dries up as a product moves to a (potentially) different vendor.
  - ZenoArrow 9y ago
    > "as a product moves to a (potentially) different vendor." The only other manufacturer of x64 CPUs in Intel, and the only other manufacturer of (competitive) GPUs is Nvidia. Why would Microsoft or Sony incur the high NRE cost to switch to two different suppliers mid-cycle just so they can shave a small amount off their unit cost? That's not to say AMD wouldn't pass on some of the savings to Microsoft and Sony, I'm sure they would, but it's not likely to be a one-sided deal.
    - vvanders 9y ago
      The same reason you fight tooth and nail for pennies on the BoM, because at scale every cent matters. There's also the inverse where if the jump to the next chip is small(see XB One/S/X) you may migrate early and EoL a product before planned leaving a chip production line with no product. You also always have multiple vendors bidding so if one of them offers a sliding scale you're going to use that as leverage against the other vendors.
      - ZenoArrow 9y ago
        > "The same reason you fight tooth and nail for pennies on the BoM, because at scale every cent matters." It doesn't matter if the potential savings are sunk by the NRE costs of shifting to new vendors before the projected end of the product. You have to look at cost holistically.
        vvanders 9y ago
        Well, duh ;). When you're talking 15M+ units being able to drop $1-2 from BOM is a huge motivator for things like this. When you get into the millions of dollars worth of savings you can fund a lot of engineering time. They also may never go through with the switch but use it as leverage for a better deal. Back when I did SoC evals we'd take products right up to the brink of production just to apply pressure. It was almost like a game of chicken between 2-3 vendors to see who blinked first and gave us a better BoM/deal on the core chip. These weren't easy bring-ups but usually were vastly different GPUs + CPU combos. It's very much a thing that happens, at least back when I was involved with stuff like that ~6 years ago.
- magila 9y ago
  Protip: When you accuse people of talking out of their arse, don't then proceed to talk out of your arse.
  - ZenoArrow 9y ago
    Protip: When you disagree with someone, try to offer more than just an ad hominem. If you disagree with something I've said, by all means explain why.
    - magila 9y ago
      I'm not trying to start a debate here. It's obvious from your posts that you don't have any particular knowledge of AMD's console dealings, or even console dealings in general. You only speak to generalities which are well known among even casual observers of the industry. None of what you've said specifically refutes the original claim. I know you don't have any grounds to speak with any authority on the matter, and you know it too if you're honest with yourself.
      - ZenoArrow 9y ago
        > "I'm not trying to start a debate here." Interesting. > "It's obvious from your posts that you don't have any particular knowledge of AMD's console dealings, or even console dealings in general." I never claimed to. > "You only speak to generalities which are well known among even casual observers of the industry. None of what you've said specifically refutes the original claim." It's precisely because these market generalities do not match with what was proposed that I called it into question. Developing new silicon is a risky endeavour. Even going from one process node to a smaller process node without changing the design architecturally is fraught with problems, resulting in lower yield until the manufacturing kinks are worked out. Why would a chip manufacturer agree to a deal where they're expected to take on increased risk for a lower reward? It makes no business sense. That's what I was calling into question. > "I know you don't have any grounds to speak with any authority on the matter, and you know it too if you're honest with yourself" I may not personally know the same people vvanders knows, but I can put myself in the shoes of a businessman running a chip manufacturer. I enjoyed debating with vvanders, and aside from leaving out the dig at the people they know in the industry, I'd do it again.

dralley 9y ago

Well, there's motivation on AMD's part, but they also have a value proposition that nobody else could have matched. They can provide both the CPU and GPU on one chip, which simplifies the console designs pretty dramatically. More compact, easier to cool, etc. Intel graphics solutions were (and remain) sub-par, and Nvidia has no x86 solutions (and their ARM chips would have been underpowered).

kimixa 9y ago
I don't know if an ARM chip really would be underpowered - remember the consoles are using the ultra-low-power jaguar cores. Probably not a million miles away from an A57, or whatever denver-based core NVidia could pull out of the bag.
- jrs95 9y ago
  It definitely wasn't underpowered for the Switch. And they managed to get Skyrim and Doom running on that. I'd imagine they could do even better performance wise in a traditional console rather than kind of a portable hybrid.
  - CydeWeys 9y ago
    The Switch is definitely underpowered compared to the other games consoles though (and certainly compared to PCs). Reviews consistently mention that it's underperforming its competitors in frame rates, graphics quality, etc. Heck, it doesn't even do 1080p in all modes of play. A lot of that has to do with it being a handheld hybrid, as you point out, but these compromises would have been a lot harder to stomach if it had been a dedicated set-top console like its direct competitors.
    - danudey 9y ago
      The Switch has sold almost half as many units in the last 10 months as the Xbox One has in the last five years. If the only concern is resolution and not quality or gameplay, then the Switch doesn't stack up, but I think the sales numbers point to the Switch being a smash hit with consumers so those compromises seem stomachable from my perspective. (Anecdotally: I wish the graphics in BotW were better, at least in terms of draw distance, but then I take the Switch out of the dock and take it to work to play Mario Kart with my coworkers and it seems like a fine tradeoff to me.)