[ZDNet] AMD pulls in $100 for every PlayStation 4 sold - Page 16 - Overclock.net

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post #151 of 159 Old 11-22-2013, 12:32 PM
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Originally Posted by maarten12100 View Post

It is a win either way since they are diversified and this is another profit generating brach of the tree.
10 dollar times 200 million would still make 2 billion in profit over those 5 years or so.
100 mil extra per quarter and this might get better later on on a smaller node.

It is money. But the return is not great. Remember AMD not only has to turn around and invest that money back into R&D, employees, and the 1001 other things. In most companies, bottom line of 17% profit is needed for long term growth. At 10% amd might not be making enough in return to grow the company enough to keep up with the market. If they can not compete with the market, they simply will fail.

So even though they may be making enough money to pay the bills now, they might not be able to do it long term.

When intel dumps 10 to 12 billion dollars a year in R&D. When amd can only put in 2 billion in 5 years, it simply can not keep up. Intel does about 33% return back to R&D. Which is why intel passed on this contract. They would had to charge 70 bucks more to make enough money back to have long term growth.


I hope AMD will get their costs down to 60 bucks a chip, so they can have long term growth.
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post #152 of 159 Old 11-22-2013, 04:52 PM
 
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No way to really know until or if AMD release that information. Stuff adds up fast. I wouldn't be surprised to find out that just payroll of engineers to sit around and think on the project for six months ended up costing $250 million. Then when you add on setting up a new build process (we can't actually buy an APU that is like what is int he PS4), building a motherboard, making the BIOS/Firmware for it, paying any royalties out for things like sound and networking processors...hitting $1 billion was probably easy.

But hey...I suppose it was possible Sony asked, "Do you haven a APU we can use?" and AMD said, "Sure, here you go" and it was that easy. I can also see some of the R&D from the Xbox One and PS4 overlapping reducing total R&D costs as well, but I am sure a billion dollars is an easy R&D cost to hit in the hardware world. Heck, I was just part of a $2 million R&D project to implement a vended application with a team consisting of 4 people that spanned about 14 months. This stuff adds up fast. Plus there are all sorts of indirect costs...It isn't just R&D. It is paying for our office space, our secretaries, travel, testing, new software licensing, stinking lunches for management and company reps that some how totaled up to nearly $40,000...it is nuts. I never want to be a project manager.
I only see exaggerations.
No offense.
You say 2 billions like is nothing.
2 billions is Huge for AMD. I don't think they ever had such a R&D budget.
AMD's total revenue for 2012 was $5.42 billion. So the $1-2 billions spent on the console project look impossible to me.
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post #153 of 159 Old 11-22-2013, 04:57 PM
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Originally Posted by Serios View Post

I only see exaggerations.
No offense.
You say 2 billions like is nothing.
2 billions is Huge for AMD. I don't think they ever had such a R&D budget.
AMD's total revenue for 2012 was $5.42 billion. So the $1-2 billions spent on the console project look impossible to me.

A few things, 1.) I don't think he is said 2 billion. 2.) AMD spent 1.2 billion in 2013 on R&D. So 2 billion over 3 years is 100% possible.
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post #154 of 159 Old 11-22-2013, 05:25 PM
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Is this in anyway indactive of the profit's AMD is making? Also, Nvidia isn't in the position to deliver an APU like AMD.

Take this for example.

Let's say Sony gave a $50 budget for CPU and a $50 budget for GPU.

AMD "hey we'll sell you a $50 dollar CPU and a $50 GPU. AMD's expense cost $80. AMD's revenue $100. AMD's profit - $20.

Nvidia "hey we can only sell you a $50 GPU. Nvidia's expense cost $40. Nvidia's revenue $50. Nvidia's profit - $10.

Obviously all of my numbers are fictitious, but in this simple example, you can see how AMD is making more out of this deal than Nvida could. For that $10, Nvidia has to weigh the cost of allocating resources to this project; potentially detracting from their bigger more profitable markets.

Not to mention, the APU design would have also made it easier for Sony to design the motherboard, cooling, case, etc so AMD could have pulled profits in from there too. (eg. If Sony paid them a bit extra to do an APU rather than going with Intel + nVidia or something)

People also seem to be over-rating the costs of designing and building these chips, remember, they've already got the GPU side (GCN) and CPU side (Jaguar) designed, they just had to put them together with the other stuff Sony wanted inside the PS4 APU which while it isn't simple, is a heck of a lot simpler than designing a new chip, not to mention I severely doubt MS and Sony weren't helping AMD with paying for test wafers if they're throwing other stuff (eg. MS' eDRAM) onto the die too.
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Then you apparently haven't been here long enough. He posts a fair bit good about AMD, maybe not to the extent of Intel/Nvidia, but he does.

The way I saw it (And seem to remember other members saying so around the time) was that he was unbiased and pretty much started being negative on AMD out of the blue one day. There's little question as to whether he's biased against AMD or not, as smart as the guy is.


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post #155 of 159 Old 11-22-2013, 05:34 PM
 
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Originally Posted by RiverOfIce View Post

A few things, 1.) I don't think he is said 2 billion. 2.) AMD spent 1.2 billion in 2013 on R&D. So 2 billion over 3 years is 100% possible.
AMD spent over a billion on r&d in total not a single project.
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post #156 of 159 Old 11-22-2013, 05:55 PM
 
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Originally Posted by RiverOfIce View Post

A few things, 1.) I don't think he is said 2 billion. 2.) AMD spent 1.2 billion in 2013 on R&D. So 2 billion over 3 years is 100% possible.

In the past 3 years AMD developed GCN (a brand new GPU architecture; Bobcat and Jaguar; Bulldozer (a brand new CPU architecture) and its successors, as well as a bunch of other technologies like Mantle, TrueAudio, and HSA. Not to mention they starting putting more effort into their drivers during the past 2 years.

The X1 and PS4 however, use preexisting GCN configurations and put it them on die with a custom configuration of Jaguar, another preexisting architecture. Compared to everything else the PS4 APU seems like small beans. Let's assume AMD spent around 4 billion over the past 3 years, you're telling me that you think that it's reasonable to think that the PS4 APU cost $2 billion to develop? Especially when compared to the slew of other, more significant, tasks they were working on in the same time frame?

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post #157 of 159 Old 11-22-2013, 06:12 PM
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Well i really hope they do get a great profit out of consoles. I think they deserve it. thumb.gif
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post #158 of 159 Old 11-22-2013, 09:30 PM
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Originally Posted by Serios View Post

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Originally Posted by RiverOfIce View Post

A few things, 1.) I don't think he is said 2 billion. 2.) AMD spent 1.2 billion in 2013 on R&D. So 2 billion over 3 years is 100% possible.
AMD spent over a billion on r&d in total not a single project.

That isn't always reported correctly and like I said it also depends on how they handle their indirects. They might have only spent 350 million a quarter or so on R&D, but you have to look at the rest of their listed expenses. They will often have a around $200 million in "General" with tangible amounts in "special charges" as well if I remember right. Plus they will put all their payroll into operating costs. The true cost of R&D is seldom what a company actually claims it to be. AMD has been making claims of trying to reduce R&D expenses so i am sure there is a lot of sweeping under the rug.

However, my original number of 20 million sales was just a flat out guess...it could be as low as 10 million before they actually turn a profit. Either way that is still a lot of sales to go. Plus as the console ages the MSRP will drop and Sony will probably want to pay less to AMD for hardware at that time too.

long story short; we can't really tell anything from this information unless AMD releases more info. There are all sorts of variables that effect this.

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post #159 of 159 Old 11-23-2013, 04:44 PM
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Originally Posted by geoxile View Post

In the past 3 years AMD developed GCN (a brand new GPU architecture; Bobcat and Jaguar; Bulldozer (a brand new CPU architecture) and its successors, as well as a bunch of other technologies like Mantle, TrueAudio, and HSA. Not to mention they starting putting more effort into their drivers during the past 2 years.

The X1 and PS4 however, use preexisting GCN configurations and put it them on die with a custom configuration of Jaguar, another preexisting architecture. Compared to everything else the PS4 APU seems like small beans. Let's assume AMD spent around 4 billion over the past 3 years, you're telling me that you think that it's reasonable to think that the PS4 APU cost $2 billion to develop? Especially when compared to the slew of other, more significant, tasks they were working on in the same time frame?

It probably did.

That is, if you include the R&D costs for Jaguar and GCN, plus whatever was needed to make them into the PS4 APU. wink.gif
The cost really wouldn't be that high though, nearly all of it is just grabbing other technology they've already made/were making at the time and bolting it together, kind of like how it costs a lot less for nVidia/AMD to cut down their high-end cards into the lower end models.


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