AMD deal could gain $3 Billion off Microsoft Xbox One
AMD has for the past few years been having financial difficulties. They have dramatically improved their hardware, whether it be their APUs, GPUs, or other ventures they have put their name on. With everything going on they have still been having issues turning a healthy profit and when it broke months ago they would be powering the next generation consoles, the Wii U, PlayStation 4, and Xbox One, it gave them a solid revenue stream.
Bob Feldstein, former AMD and current Nvidia employee let it slip that the deal with Microsoft to power the Xbox One will be in the $3 Billion range over five years. AMD’s current revenue is only about a billion dollars and this keep them going for the next 5-10 years if the Xbox One last as long or longer than its predecessor the Xbox 360. Details about the PlayStation 4 have not come to light but considering AMD is using nearly the same chip to power the PlayStation 4 then you can assume that deals would be the same. All this hinges on sales of the Xbox One and PS4 which is far from certain but you can expect atleast a few million units shipped between them when they launch. Even though actual profit from making hardware consoles are slim margins, it is still a profit for AMD since no one expects the Xbox One or PS4 to flop on release.
Currently the only way I see either of these consoles flopping is if they cost in the $6-700 range or they have massive hardware failures on day one. Here soon at E3 we should find out the exact details of the Xbox One along with pricing and Sony plans to do the same hopefully on June 10th, during their presentation at E3.
It will be interesting to see how well everything sells and what the future of AMD vs Intel/Nvidia if AMD has the capitol to majorly invest to steal market share from either Intel or Nvidia depending on the hardware device.
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