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Funny that AMD would design a bespoke chip for Magic Leap that sold a tiny number of units, and Valve would ride on their coattails for a game console that undo

Funny that AMD would design a bespoke chip for Magic Leap that sold a tiny number of units, and Valve would ride on their coattails for a game console that undoubtedly sold way more. I wonder how much Magic Leap paid AMD for this design? Guess that explains where some of their billions went.

gjsman-1000 3y ago
One possible explanation is that Magic Leap may have significantly overestimated how many chips they needed, and wondered if someone might buy excess inventory… or at least, might buy out their contract. Consider the first Magic Leap headset. They thought it would do over 100,000 units. It only did 6,000. https://www.engadget.com/2019-12-06-magic-leap-6000-headsets-sold-report.html https://www.engadget.com/2019-12-06-magic-leap-6000-headsets... I don’t know how the Leap 2 is doing. But in the above example, let’s say AMD wanted a minimum order of 100,000. If you were Magic Leap, you’re running to find a buyer - any buyer. You’re also going to cut the price for your batch as far as necessary to cover for possible increased production costs in the future. Even if you recover just half of your costs, it’s better than being forced to buy chips nobody wants that will quickly go stale.
- exmadscientist 3y ago
  Thinking about modern chips in terms of units and inventory isn't the best way to do it. Cutting-edge logic isn't quite priced like software, but it's close enough: the first unit costs $10m in R&D and NRE (Non-Recurring Expenses, like mask sets and test tooling) and then the second unit costs $1 or so. My guess is that Magic Leap, a company infamous for spending profligately, paid for the NRE on this design, and then didn't buy very many of them or pay for exclusivity on it (or let any exclusivity go). AMD is notorious for shopping around designs they've already got ready to ship (probably related to sibling comment's observations about the console graphics market), and Valve runs lean despite not having to, and so this story adds up quite nicely. There may or may not have been some inventory lying around, but the NRE is usually the real story on these things. (It's also possible that the custom Magic Leap sections of this chip have terrible yield -- actually that wouldn't surprise me at all -- and so these were great candidates for die harvest. Which of course is also the sort of thing AMD loves to sell.)
  - modeless 3y ago
    Interesting, why would one part of a chip have significantly worse yield than another?
    - exmadscientist 3y ago
      It's just where the tightest structures (physically, electrically, or timing-wise) are found. The AMD cores and uncore are, I'm guessing, fairly well tuned to the process by skilled people. The bolt-on stuff often isn't so well done, particularly if an end-client project manager or beancounter is driving the schedule. So it's almost certain to happen if the added stuff has very complex paths, and you wouldn't be going to the effort of adding silicon if you didn't need it to do something interesting.... So, no proof, but it wouldn't be any kind of surprise if this were part of the problem.
    - pjc50 3y ago
      It's where the cutting-edge work is, or where the analogue engineering is, and as such is very dependent on your simulation work being good enough. Or the designers may have chosen to put less slack there for higher performance at the cost of yield - this is something of a "bet" on the production process, which can turn out well or badly. Or it's where the chip is hottest.
  - deleted 3y ago
    [deleted]
  - coffeebeqn 3y ago
    It seems smart to go by the only successful handheld strategy - Nintendo always shops around for the cheapest chip that can get the job done. Even if it’s many years old as long as it’s cheap , highly available and can run what they need
    - modeless 3y ago
      The difference is Nintendo builds their own killer apps exclusively for the hardware that they choose, so they can guarantee a good experience regardless of the performance level. Steam Deck doesn't have any native games. It's all games written for other platforms first and if the chip's performance doesn't meet a minimum bar then it just won't work.
blamazon 3y ago
If I remember right, I think Valve has implied that the steam deck arose out of prototypes for a wireless VR headset, so it could be possible there was some early collaboration to that effect, and Valve ended up taking a different path once they realized what the steam deck could be?
- ekianjo 3y ago
  > the steam deck arose out of prototypes for a wireless VR headset Do you have any source for this? I don't recall seeing this kind of info so far.
  - wlesieutre 3y ago
    Not quite what they said, but this article talks about how lessons learned with the Steam Deck will inform future VR devices https://www.roadtovr.com/valve-working-on-vr-steam-deckard-oled/ https://www.roadtovr.com/valve-working-on-vr-steam-deckard-o...
fomine3 3y ago
It seems to similar to PS3 vs Xbox360 PowerPC story

gjsman-1000 3y ago

One possible explanation is that Magic Leap may have significantly overestimated how many chips they needed, and wondered if someone might buy excess inventory… or at least, might buy out their contract. Consider the first Magic Leap headset. They thought it would do over 100,000 units. It only did 6,000. https://www.engadget.com/2019-12-06-magic-leap-6000-headsets-sold-report.html https://www.engadget.com/2019-12-06-magic-leap-6000-headsets... I don’t know how the Leap 2 is doing. But in the above example, let’s say AMD wanted a minimum order of 100,000. If you were Magic Leap, you’re running to find a buyer - any buyer. You’re also going to cut the price for your batch as far as necessary to cover for possible increased production costs in the future. Even if you recover just half of your costs, it’s better than being forced to buy chips nobody wants that will quickly go stale.

exmadscientist 3y ago
Thinking about modern chips in terms of units and inventory isn't the best way to do it. Cutting-edge logic isn't quite priced like software, but it's close enough: the first unit costs $10m in R&D and NRE (Non-Recurring Expenses, like mask sets and test tooling) and then the second unit costs $1 or so. My guess is that Magic Leap, a company infamous for spending profligately, paid for the NRE on this design, and then didn't buy very many of them or pay for exclusivity on it (or let any exclusivity go). AMD is notorious for shopping around designs they've already got ready to ship (probably related to sibling comment's observations about the console graphics market), and Valve runs lean despite not having to, and so this story adds up quite nicely. There may or may not have been some inventory lying around, but the NRE is usually the real story on these things. (It's also possible that the custom Magic Leap sections of this chip have terrible yield -- actually that wouldn't surprise me at all -- and so these were great candidates for die harvest. Which of course is also the sort of thing AMD loves to sell.)
- modeless 3y ago
  Interesting, why would one part of a chip have significantly worse yield than another?
  - exmadscientist 3y ago
    It's just where the tightest structures (physically, electrically, or timing-wise) are found. The AMD cores and uncore are, I'm guessing, fairly well tuned to the process by skilled people. The bolt-on stuff often isn't so well done, particularly if an end-client project manager or beancounter is driving the schedule. So it's almost certain to happen if the added stuff has very complex paths, and you wouldn't be going to the effort of adding silicon if you didn't need it to do something interesting.... So, no proof, but it wouldn't be any kind of surprise if this were part of the problem.
  - pjc50 3y ago
    It's where the cutting-edge work is, or where the analogue engineering is, and as such is very dependent on your simulation work being good enough. Or the designers may have chosen to put less slack there for higher performance at the cost of yield - this is something of a "bet" on the production process, which can turn out well or badly. Or it's where the chip is hottest.
- deleted 3y ago
  [deleted]
- coffeebeqn 3y ago
  It seems smart to go by the only successful handheld strategy - Nintendo always shops around for the cheapest chip that can get the job done. Even if it’s many years old as long as it’s cheap , highly available and can run what they need
  - modeless 3y ago
    The difference is Nintendo builds their own killer apps exclusively for the hardware that they choose, so they can guarantee a good experience regardless of the performance level. Steam Deck doesn't have any native games. It's all games written for other platforms first and if the chip's performance doesn't meet a minimum bar then it just won't work.

blamazon 3y ago

If I remember right, I think Valve has implied that the steam deck arose out of prototypes for a wireless VR headset, so it could be possible there was some early collaboration to that effect, and Valve ended up taking a different path once they realized what the steam deck could be?

ekianjo 3y ago
> the steam deck arose out of prototypes for a wireless VR headset Do you have any source for this? I don't recall seeing this kind of info so far.
- wlesieutre 3y ago
  Not quite what they said, but this article talks about how lessons learned with the Steam Deck will inform future VR devices https://www.roadtovr.com/valve-working-on-vr-steam-deckard-oled/ https://www.roadtovr.com/valve-working-on-vr-steam-deckard-o...

fomine3 3y ago

It seems to similar to PS3 vs Xbox360 PowerPC story