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[xbitlabs] AMD Will Receive $60 - $100 for Every SoC for Next-Gen Game Consoles - Financial Analysts. - Page 6

post #51 of 156
Quote:
Originally Posted by Alatar View Post

The consoles are much more likely to be a way for AMD to get their tech and name out there, a long term investment, it's highly unlikely that they're in it for short term gain.

The real deal is getting more and more people supporting their tech and seeing the advantages.

One of the many benefits in addition to increasing their cash flow astronomically getting rid of the all the short sellers in their stock.
post #52 of 156
Quote:
Originally Posted by ejb222 View Post

I'm not too certain that it's that much of a strain. Why would a company make a decision to move parts, labor, resources etc from profitable parts to manufacture a chip that they will make no profit on? I'm pretty sure there must be enough parts and labor to handle this with no influence on their other product lines. I'm pretty sure you would hear almost immediately if AMD couldn't manufacture these parts and everything else they make. If they are hiring people specifically for this contract, that would tell me they are actually making money, because they certainly wouldn't add labor expense to a chip that they are already losing money on.

I really don't see how AMD loses money on these at all.
I was address the particular post. People have to understand that business decisions are not solely based on "units sold * margin = profit".


Quote:
Originally Posted by Th4natos View Post

Oh and to everyone arguing about a 5$ profit margin you need to take a step back and realize that a $350 million dollar profit pre-tax is still a PROFIT. that means that if they were paid $60 per system sold that $55 of that was OVERHEAD. Their actual amount of cash flow would be 4,2 billion dollars based on the 350,000,000 profit from a $5 margin and the lowest end of the 60-100 dollar range per system. Cash flow is the name of the game gentlemen.
Profit at the expense of all else is not a proper way to run a business long-term.


Note, I believe most of us agree AMD is not selling at a loss and the real reason AMD is in this is for APU/HSA adoption.
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post #53 of 156
Quote:
Originally Posted by Cyph3r View Post

Revenue, not profit. After R&D, manufacture, shipping etc, that 60-100 could be next to nothing in the grand scheme of things.

What much R&D did they have to do?

Weren't they making apus long before ps4 and xbox one?
Quote:
Originally Posted by Alatar View Post

I'm going to guess that these are quite expensive chips to make. They're much larger than any other APU AMD makes. Actually the one in the xbone PCB image looks like it's above 400mm^2. They're pretty much the biggest thing AMD makes...

And they're selling them for 60-100.... If that doesn't sound like low profit margins I don't know what does.

Yes anything involving AMD, you always guess the worst.
Edited by bencher - 5/30/13 at 9:31am
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post #54 of 156
Quote:
Originally Posted by bencher View Post

What much R&D did they have to do?

Weren't they making apus long before ps4 and xbox one?

They still have to put the existing functional blocks together, tape it out, validate, and respin if necessary. That is 6-12 months of work there.
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post #55 of 156
Quote:
Originally Posted by DuckieHo View Post

I was address the particular post. People have to understand that business decisions are not solely based on "units sold * margin = profit".
Profit at the expense of all else is not a proper way to run a business long-term.


Note, I believe most of us agree AMD is not selling at a loss and the real reason AMD is in this is for APU/HSA adoption.

I guess you could be right, since I don't know too much about the expectation of the share holders with contracts like this. I assume these consoles are probably their largest contracts, are investors really expecting to take a loss on this in the hopes that this will bring about better long term support? If so is there some sort of dollar amount to sway money from investors on the proposition of 5 years of loss on a contract? Maybe I'm over simplifying it...or I more likely I just dont know what I'm talking about. biggrin.gif Hoping you can fill in the blanks for me...I'm curious how this works.
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post #56 of 156
Quote:
Originally Posted by bencher View Post

Yes anything involving AMD, you always guess the worst.

I guess what I think is correct.

Go check the pic of the insides of the xbone. The die is huge. And huge dies cost a lot of money.
 
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post #57 of 156
Quote:
Originally Posted by ejb222 View Post

I guess you could be right, since I don't know too much about the expectation of the share holders with contracts like this. I assume these consoles are probably their largest contracts, are investors really expecting to take a loss on this in the hopes that this will bring about better long term support? If so is there some sort of dollar amount to sway money from investors on the proposition of 5 years of loss on a contract? Maybe I'm over simplifying it...or I more likely I just dont know what I'm talking about. biggrin.gif Hoping you can fill in the blanks for me...I'm curious how this works.

The likely scenario is that AMD is making a rather small per-unit profit on these console components, and are hoping that success in the console realm will spill over to the PC arena due to having developers work with AMD-based hardware.

Their x86 market share has dropped to 14% and their discrete GPU share has hovered at ~35% for the last three quarters, so any profit is better than no profit at this point. Also, these "design wins" are the basis of what AMD hopes will be an improved outlook for their future products.
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post #58 of 156
Quote:
Originally Posted by Alatar View Post

I guess what I think is correct.

Go check the pic of the insides of the xbone. The die is huge. And huge dies cost a lot of money.

I wonder what AMD is going to do the ones that didn't make it into the consoles?


I would love to see cut-down APUs embedded on mITX motherboards. Would be great for HTPC, home file servers, nettops, etc.
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post #59 of 156
How is this so hard to understand?

AMD is making money just repackaging existing IP and slapping new IP from Sony or MS onto an APU.

It's forcing the big two consoles to make their developers program for HSA on AMD APUs.

It's forcing Microsoft to increase performance on AMD products to extract more out of Xbone hardware

It's forcing Microsoft to push DirectCompute/etc on AMD APU

I've said it before, the win for HSA with these consoles is astounding, and Nvidia has every right to be jealous and spread FUD. In the first year, there will be more HSA accelerated games than CUDA accelerated PhysX games have been created.

And that's going to trickle over from consoles, We got low effort ports and the last thing game developers want to do is spend time ripping things out for PC because some people can't run it.

But the way some of you react to AMD is priceless. So, you bash them for not making money, and when they get a deal where they're making money, you say it's not enough? And I assume that if Nvidia stitched together a bunch of ARM cores and threw a GPU on the die and threw CUDA at it that it'd be a complete waste of R&D and SUPER EXPENSIVE TO BUILD!

It's also going to drive a push to use AVX and the other instructions that come on Jaguar. I'm a huge believer in extracting performance out of using instructions, that's kind of the point of CISC and if we want to run ancient instructions all day you might as well use RISC. But my point is that by switching to AVX and stuff in Gentoo, I've seen some insane gains that you guys aren't accounting for when it comes to AMD. LAME is about 60% faster with compiler optimizations in Gentoo, which pretty much puts it on par with IB on Windows with the default compiled LAME. Blender is more than twice as fast for me than it is in Windows, putting me at about 3930k clock for clock speeds. Please stop under-estimating the power of instructions in a CISC microarchitecture!

And AMD is going to push developers to use all of these instructions. If you have AVX, FMA, etc and you're tired of companies giving us crappy x87 ports, AMD basically just put an end to that, because x87 on Jaguar is going to be absolutely painful and AVX on Jaguar is going to compete with high end Intel CPUs in single thread clock for clock, probably even better.
Edited by sdlvx - 5/30/13 at 9:50am
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post #60 of 156
Quote:
Originally Posted by DuckieHo View Post

I wonder what AMD is going to do the ones that didn't make it into the consoles?


I would love to see cut-down APUs embedded on mITX motherboards. Would be great for HTPC, home file servers, nettops, etc.

Didn't they already say that they were going to sell the chips in some OEM systems? At least I think I've read that somewhere...

E: here: http://www.theinquirer.net/inquirer/news/2250802/amd-to-sell-a-cut-down-version-of-sonys-playstation-4-apu
 
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