New consoles making AMD big money
AMD’s chips power all of the new consoles. Sony’s PlayStation 4, Microsoft’s Xbox One and even Nintendo’s Wii U use processors supplied by AMD. Rival chipmaker Nvidia’s said on numerous occasions that it’s glad it’s not supplying the chips for the consoles. It’s always seemed like sour grapes. they could get sourer, as AMD’s revealed that the new consoles have given their bottom line a boost.
In March last year, Tony Tamasi of Nvidia said. ".. we came to the conclusion that we didn’t want to do the business at the price those guys were willing to pay".
"Having been through the original Xbox and PS3, we understand the economics of [console development] and the tradeoffs,"
The tradeoff seems to be cash. The arm of AMD responsible for the console chips, AMD’s Graphical and Visual Solutions division, saw revenue a year-on-year increase of $539 million for the last quarter of 2013 – up to $865 million from the previous year’s $326 million.
"Strong execution of our strategic transformation plan drove significant revenue growth and improved profitability in the fourth quarter," said AMD president and CEO Rory Read in a statement.
"The continued ramp of our semi-custom SoCs and leadership graphics products resulted in a 38 percent revenue increase from the year ago quarter. Our focus in 2014 is to deliver revenue growth and profitability for the full year by leveraging our differentiated IP to drive success in our targeted new markets and core businesses."
It’s not all roses, champagne and yachts for AMD though, as AMD’s Computer Solutions division – the one responsible for its PC chips - saw a nasty $7 million operating loss in Q4 on revenue of $722 million. In the last year, that division saw a $22 million loss in the last year.
While AMD keeps console gamers playing, Nvidia’s hedging its bets on mobile chips and its prominence in Steam Machines.