AMD: Xbox One deal worth over $3 Billion

[SiliconWars]

http://uk.gamespot.com/news/xbox-one-deal-with-amd-costs-over-3-billion-6408926

$600 million per year on the Xbox One alone seems like a lot of welcome money for AMD.

 

[Vesku]

Interesting that he'd reveal the $ amount considering this from earlier in the year:

http://arstechnica.com/tech-policy/...-employees-of-stealing-over-100000-documents/

Still, not that big of a leak without knowing revenue vs profit breakdown.

 

[blastingcap]

I don't know if that is guaranteed $3B or not--probably not. I don't think the XBO will do that well. DRM-infested always-online console weaker than PS4? No cheap used games?

I don't think the PS4 will do that well, either, nor the Wii U. Mobile keeps eating into casual gamers' pocketbooks, and then there is Ouya, Steambox, and PC, along with non-gaming entertainment. I just don't see a bright future for the XBO though I could be wrong.

 

[itsmydamnation]

im willing to bet both the PS4 and Xbox one outsell the PS3 and Xbox360 in global numbers. No idea about in N.A.

 

[blastingcap]

im willing to bet both the PS4 and Xbox one outsell the PS3 and Xbox360 in global numbers. No idea about in N.A.

So nice of you to give reasons, too.

Wii U launched in a deep recession, and many hardcore gamers were waiting for the XBO and PS4, but still, I think even Nintendo feels the weight of casual mobile gaming and other stuff that I mentioned in my post (you know, the one where I put my opinion forth and gave reasons for it?)

http://www.eurogamer.net/articles/2...me-to-call-an-ambulance-for-nintendos-console

XBO and PS4 are next, and I don't think they will do much better relative to their predecessors. There isn't even the Blu-Ray factor (many bought PS3s in part due to this), or backwards-compatible libraries of games. And if PS4 goes all DRM-heavy and anti-used like XBO, that will hurt them even more. I suspect that the PS3 will outsell the PS4 for many months after the PS4 launches.

 

[Vesku]

I think it's really hard to know atm, blastingcap. I mean look at how many units the Kinect has moved, not many predicted that.

 

[itsmydamnation]

So nice of you to give reasons, too.

what people actually want reasons...... god the standard here is through the roof .

simple, total addressable market. Its only getting bigger. The consoles are less complex and will fail less which will allow more aggressive price points while maintaining margin.

I think the PS4 will do better then Xbox one but thats because i think sony will do a better job in Asia which is by far the largest growing market.

 

[blastingcap]

what people actually want reasons...... god the standard here is through the roof .

simple, total addressable market. Its only getting bigger. The consoles are less complex and will fail less which will allow more aggressive price points while maintaining margin.

I think the PS4 will do better then Xbox one but thats because i think sony will do a better job in Asia which is by far the largest growing market.

Yeah I agree the PS4 will outshine the XBO/Xbone/whatever you want to call it, especially if they keep DRM under control unlike XBO. And you make a good point about the selling prices which Sony/MSFT have talked about before... they don't want to be selling $600 consoles at a loss in this economy.

 

[Skurge]

what people actually want reasons...... god the standard here is through the roof .

simple, total addressable market. Its only getting bigger. The consoles are less complex and will fail less which will allow more aggressive price points while maintaining margin.

I think the PS4 will do better then Xbox one but thats because i think sony will do a better job in Asia which is by far the largest growing market.

I agree, I think very few people cross shop consoles and mobile phones. I think the same people who play facebook games are the ones playing on mobile.

It also just isn't gamers. Yes, people were making fun of Microsoft as they were talking about TV, but that is one more reason to get the console.

Just my 2c

 

[insertcarehere]

what people actually want reasons...... god the standard here is through the roof .

simple, total addressable market. Its only getting bigger. The consoles are less complex and will fail less which will allow more aggressive price points while maintaining margin.

I think the PS4 will do better then Xbox one but thats because i think sony will do a better job in Asia which is by far the largest growing market.

This remains to be seen, 7/8 years ago, when the PS3/X360 launched, smartphones, tablets and smart TVs didn't exist/were not mainstream, the effect this has on the market for consoles may be pretty significant. While I believe that the Xone/PS4 will have a decent launch and good sales for the first 2 years, when the 'core' gamers buy it, the appeal to more 'casual' gamers after this period might not be as good.

 

[sontin]

And pc gaming is much cheaper today than it was 2005/2006. Now you can build a PC with the same performance for nearly the same price.

At the end of 2005 alone the GPU cost more than the xbox360...

 

[R0H1T]

This remains to be seen, 7/8 years ago, when the PS3/X360 launched, smartphones, tablets and smart TVs didn't exist/were not mainstream, the effect this has on the market for consoles may be pretty significant. While I believe that the Xone/PS4 will have a decent launch and good sales for the first 2 years, when the 'core' gamers buy it, the appeal to more 'casual' gamers after this period might not be as good.

There are other reasons why these consoles can sell more than their predecessors ~

1) Cheaper price as compared to the previous gen.

2) More markets that'll get these at launch & hopefully without those jacked up prices !

3) These are more home entertainment devices than just being a gaming console.

4) Lastly the actual market is bigger now because the people that game on a smartphone/tablet, especially in developing nations, are not going to be satisfied with that underwhelming experience & a gaming console is a more convenient & cheaper upgrade than PC.

Just some of the things that came on top my mind to debunk that "mobile/tablet being a threat" idea, I mean yeah sure they are but people into casual/light gaming would rather go for a console than to find a way through those SLI/crossfire issues !

 

[Grooveriding]

XB One is not online only, they said that during the reveal, it was just a rumour that turned out to be false. Considering that, I doubt Sony would then go online only for the PS4 as that would be a negative against them when MS is not doing that with the new Xbox.

I think the XB One and PS4 will sell well and the Wii-U's poor sales are not of much consideration compared to Sony's and Microsoft's consoles. The market for the Wii was not the sort to immediately jump on the next thing, while 360 and PS3 gamers are going to be much more avid to get a next generation console with the shiny new graphics and features. Never mind that with their huge and popular game libraries, that will no doubt quickly transition to being exclusive to the new consoles, it will force the hand of a lot of legacy console owners to upgrade if they want the next iteration of their favourite games.

 

[Lonyo]

This remains to be seen, 7/8 years ago, when the PS3/X360 launched, smartphones, tablets and smart TVs didn't exist/were not mainstream, the effect this has on the market for consoles may be pretty significant. While I believe that the Xone/PS4 will have a decent launch and good sales for the first 2 years, when the 'core' gamers buy it, the appeal to more 'casual' gamers after this period might not be as good.

Maybe that's why the XBone has smartphone/tablet integration, greater TV and internet support, and other non-gaming features. To give it more appeal not to casual gamers, but to non-gamers.

You buy an Xbone, you get a console, smart TV, Bluray player, DRV(?), streaming device, etc.
It's more than just a console.
And that's on launch. Look at how much was added to the Xbox 360 between initial launch and now. Microsoft aren't making a gaming console, they are making a multimedia living room box.

 

[Abwx]

Few people by there know that consoles were forbidden
in China until early 2013 , this will bring a huge market
for thoses products , moreover if this is new iterations....

 

[Greenlepricon]

Maybe that's why the XBone has smartphone/tablet integration, greater TV and internet support, and other non-gaming features. To give it more appeal not to casual gamers, but to non-gamers.

You buy an Xbone, you get a console, smart TV, Bluray player, DRV(?), streaming device, etc.
It's more than just a console.
And that's on launch. Look at how much was added to the Xbox 360 between initial launch and now. Microsoft aren't making a gaming console, they are making a multimedia living room box.

I can understand where you're coming from, but I don't think this can sell the console. I have a ps3 and htpc, which can do everything you stated on my tv. My parents have a bluray player, a ps3, and a smart tv, which do everything and so I doubt they'll get the console. Pretty much everyone I know already has a smart tv if they want one, or a much cheaper way to turn their current tv into a smart tv and get a cheap bluray player. There is no incentive to spend more or less $500 on a console when they won't play games and have to get a subscription. The ps4 will (hopefully) have all of these features working well too. I'm not saying your wrong, and Microsoft is doing well to advertise these features whereas Sony hasn't done as much of that yet. I just don't think it will sell consoles.

 

[Enigmoid]

What would their margins be on that $600 million/year?

 

[R0H1T]

What would their margins be on that $600 million/year?

I'd imagine it to be in the range of 10~20% at best.

 

[inf64]

Both XboxOne and PS4 will be practically SFF gaming HTPCs. They will offer next gen games + everything HTCP does for a price of a good notebook today (or cheaper than that).

 

[Genx87]

im willing to bet both the PS4 and Xbox one outsell the PS3 and Xbox360 in global numbers. No idea about in N.A.

Depends on the price. I honestly havent been paying that much attention. But rumors of these consoles running upwards of 600 bucks will severely hamper sales rates.

 

[TerryMathews]

Interesting that he'd reveal the $ amount considering this from earlier in the year:

http://arstechnica.com/tech-policy/...-employees-of-stealing-over-100000-documents/

Still, not that big of a leak without knowing revenue vs profit breakdown.

Considering they are having to pay GF for CPUs they aren't making, I'd say this deal will book as a net gain even with $0 margin as it will negate the penalties they are paying out today.

Reality is this will probably keep AMD away from bankruptcy for a number of years. They'll stop bleeding and get a chance to regroup.

 

[Vesku]

Considering they are having to pay GF for CPUs they aren't making, I'd say this deal will book as a net gain even with $0 margin as it will negate the penalties they are paying out today.

Reality is this will probably keep AMD away from bankruptcy for a number of years. They'll stop bleeding and get a chance to regroup.

Only true if GF is making either of these APUs, Microsoft has been dealing with TSMC up until now.

 

[NTMBK]

Considering they are having to pay GF for CPUs they aren't making, I'd say this deal will book as a net gain even with $0 margin as it will negate the penalties they are paying out today.

Reality is this will probably keep AMD away from bankruptcy for a number of years. They'll stop bleeding and get a chance to regroup.

This. Shifting a ton of massive console APUs through Global Foundries will help them clear the slate on their WSA, so they'll be up on it even if there are 0% margins on the first generation chip.

 

[NTMBK]

Only true if GF is making either of these APUs, Microsoft has been dealing with TSMC up until now.

Don't know where you got that from? The current XCGPU for the 360 is manufactured by GloFo.

 

[guskline]

Considering they are having to pay GF for CPUs they aren't making, I'd say this deal will book as a net gain even with $0 margin as it will negate the penalties they are paying out today.

Reality is this will probably keep AMD away from bankruptcy for a number of years. They'll stop bleeding and get a chance to regroup.

Good news for AMD. They need it.