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[xbitlabs] AMD Will Receive $60 - $100 for Every SoC for Next-Gen Game Consoles - Financial Analysts. - Page 9

post #81 of 156
Any company would rather do a project at book cost than have no project at all. There are numerous up-sides to that scenario, where-as laying off staff and paying out of pocket to keep the lights on has little value.
post #82 of 156
60 to 100 dollars? sigh, I was hoping it was a little more then that. They will need to do about 100 to break even. Honestly? It takes about 60 dollars alone for the physical parts and process to make the chips. Not including R&D, Salaries, and other costs.

On current chips, amd turns about a 30% profit, intel turns about a 50% profit.

Just doing the math. If the AMD Fx-8350 is 200 dollars retail, it cost 140 dollars to make. Think about it.
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post #83 of 156
Quote:
Originally Posted by Born For TDM View Post

I believe the profit margin will be slim and that is why Nvidia let AMD have the contract.

you are just repeating Nvidia PR talk. here is a better estimate of what AMD stands to earn over the next few years.

http://blogs.barrons.com/techtraderdaily/2013/03/18/amd-macquarie-ups-to-buy-bad-pc-market-notwithstanding/

"Our Japan Sony/gaming analysts Damian Thong and David Gibson believe both the Playstation 4 and Xbox 720 will begin shipping in 4Q13. While our checks indicate Sony‘s Playstation could begin shipping as soon as August, our base assumption (in line with our Japan colleagues) is 2.5 million Playstation 4 units and 2.3 million Xbox 720 units shipped in Q4 With AMD chips confirmed in the Playstation 4 and our expectation for a win in the X-Box 720 we have included the new business in our bottoms-up forecast. We note the business model should be different from AMD‘s existing Xbox 360 and Nintendo Wii U wins which were unit-royalty bearing agreements as opposed to selling finished chips. The processor used in the Playstation 4 is an eight-core CPU, based on the company‘s new architecture ( ̳Jaguar‘), integrated with an AMD graphics chip. We estimate that average selling prices for the company‘s game console business are roughly $60 due to its premium specifications. As a result, we are adding roughly $96 million of Sony/Xbox console chip revenue for AMD in 3Q13 and $228 million in 4Q13, and raising our CY13 and CY14 revenue estimates."

http://seekingalpha.com/article/1451541-xbox-ps-4-the-big-winner-is-amd

"If Sony or Microsoft sell consoles at a similar pace over the next 5 years as the PS/3 sold, then the profit alone to AMD, at $70 for the SoC and 20% net margins, is worth around ~$1.50 per share to the company. That's from one console win. Since Xbox 360 and the PS/3 both sold similarly over their life cycle, factor in both of these wins as worth around $2.50 to $3.00 per share"

http://blogs.barrons.com/techtraderdaily/2013/05/22/amd-jefferies-raymond-james-like-ps4-xbox-prospects-even-on-muted-uptake/?mod=BOLBlog

"We believe that both the PS3 and XBox 360 shipped between 70-to-75 million units each over the past few years. Assuming similar success, for the PS4 and XBox One, and assuming $60 ASP per processor and 20% operating margin would translate to $9 billion in revenues and $2.40 in EPS over 6 years, or an average annual EPS of $0.40"

Sony PS3 (Nov 2006 )and Xbox 360 (Nov 2005) sold 150 million consoles in 6 - 7 years. also PS3 was the worst selling gen , compared to PS2 which sold more than 150 million and PS1 which crossed 100 million.

http://www.vgchartz.com/analysis/platform_totals/

so even with similar sales as PS3 / Xbox 360 , thats around 10 - 12 million consoles for Xbox One and PS4 per year. 20 - 25 million consoles at USD 60 - 70 . revenue around USD 1.2 billion - 1.75 billion per year. profit at 20% margin USD 250 - 350 million per year.

AMD's entire CPU division did just 4 billion in 2012. so 30 - 45% revenue increase and a very good profit stream to help the CPU division.
Edited by raghu78 - 5/30/13 at 11:14am
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post #84 of 156
Margins will be miniscule in the beginning for Amd, but after a couple years manufacturing costs will come down and margins will increase for Amd and another thing(check link): http://www.overclock.net/a/can-amd-hardware-in-new-consoles-leverage-games-toward-amd
post #85 of 156
Quote:
Originally Posted by raghu78 View Post

you are just repeating Nvidia PR talk. here is a better estimate of what AMD stands to earn over the next few years.

http://blogs.barrons.com/techtraderdaily/2013/03/18/amd-macquarie-ups-to-buy-bad-pc-market-notwithstanding/

"Our Japan Sony/gaming analysts Damian Thong and David Gibson believe both the Playstation 4 and Xbox 720 will begin shipping in 4Q13. While our checks indicate Sony‘s Playstation could begin shipping as soon as August, our base assumption (in line with our Japan colleagues) is 2.5 million Playstation 4 units and 2.3 million Xbox 720 units shipped in Q4 With AMD chips confirmed in the Playstation 4 and our expectation for a win in the X-Box 720 we have included the new business in our bottoms-up forecast. We note the business model should be different from AMD‘s existing Xbox 360 and Nintendo Wii U wins which were unit-royalty bearing agreements as opposed to selling finished chips. The processor used in the Playstation 4 is an eight-core CPU, based on the company‘s new architecture ( ̳Jaguar‘), integrated with an AMD graphics chip. We estimate that average selling prices for the company‘s game console business are roughly $60 due to its premium specifications. As a result, we are adding roughly $96 million of Sony/Xbox console chip revenue for AMD in 3Q13 and $228 million in 4Q13, and raising our CY13 and CY14 revenue estimates."

http://seekingalpha.com/article/1451541-xbox-ps-4-the-big-winner-is-amd

"If Sony or Microsoft sell consoles at a similar pace over the next 5 years as the PS/3 sold, then the profit alone to AMD, at $70 for the SoC and 20% net margins, is worth around ~$1.50 per share to the company. That's from one console win. Since Xbox 360 and the PS/3 both sold similarly over their life cycle, factor in both of these wins as worth around $2.50 to $3.00 per share"

http://blogs.barrons.com/techtraderdaily/2013/05/22/amd-jefferies-raymond-james-like-ps4-xbox-prospects-even-on-muted-uptake/?mod=BOLBlog

"We believe that both the PS3 and XBox 360 shipped between 70-to-75 million units each over the past few years. Assuming similar success, for the PS4 and XBox One, and assuming $60 ASP per processor and 20% operating margin would translate to $9 billion in revenues and $2.40 in EPS over 6 years, or an average annual EPS of $0.40"

Sony PS3 (Nov 2006 )and Xbox 360 (Nov 2005) sold 150 million consoles in 6 - 7 years. also PS3 was the worst selling gen , compared to PS2 which sold more than 150 million and PS1 which crossed 100 million.

http://www.vgchartz.com/analysis/platform_totals/

so even with similar sales as PS3 / Xbox 360 , thats around 10 - 12 million consoles for Xbox One and PS4 per year. 20 - 25 million consoles at USD 60 - 70 . revenue around USD 1.2 billion - 1.75 billion per year. profit at 20% margin USD 250 - 350 million per year.

AMD's entire CPU division did just 4 billion in 2012. so 30 - 45% revenue increase and a very good profit stream to help the CPU division.

GOOD WORK!
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post #86 of 156
Quote:
Originally Posted by veyron1001 View Post

Im sure revenue is money after expenses paid off
Profit is money made from just the product.

Actually revenue is before overhead. Net profit is after expenditures. I doubt AMD has a net profit of 60-100 Net profit for each SoC. They way underbid on that project, almost to the point of being self defeating.
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post #87 of 156
Quote:
Originally Posted by Born For TDM View Post

I have a feeling that you THINK you know how that stuff works in that industry, anyway you dont have to get that butthurt. Theres no downside to putting in a bid, if i dont really want a job its simple i will put in a bid that would profit me a LARGE amount, then if for some weird reason i win the bid (even though i didnt want it) I would still be okay with it. So in the end YOUR RIGHT they didn't have to, but it would have been foolish not to.

He did explain the downside to submit a bid.... it takes time and man-hours. I work in finance and a Request For Proposal takes a team days to complete and they are not nearly as detailed or complex as a technical RFP. This process is not like some home contractor bid process. RFPs are legal ramifications, if you misrepresent what you can do, you can get sued.

You don't go into the bidding process blind.... you already have an idea of the competition. If you didn't, you are terrible at your job.

NVIDIA's proposal most likely would be based on either:
1) Intel/AMD x86 CPU + chipset + GPU.... lots of suppliers and wasted energy
2) ARM+GPU solution (ala Tegra).... not powerful enough and not sure if the companies wanted to use ARM ISA

Neither solution is great.... AMD's APU SoC solution is simply a perfect fit for consoles.
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post #88 of 156
Quote:
Originally Posted by lacrossewacker View Post

Not at all. Nvidia made $400 million dollars on the xbox within the first MONTH. When it came to the PS3, they only made $500 million over a 5 year period....

AMD has negative cash flow. Anything that gives money to them is a good thing.

Also, how could nVIDIA make money with the X360 if the processor was an IBM and the GPU was Radeon based?
   
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post #89 of 156
Quote:
Originally Posted by Dimaggio1103 View Post

Actually revenue is before overhead. Net profit is after expenditures. I doubt AMD has a net profit of 60-100 Net profit for each SoC. They way underbid on that project, almost to the point of being self defeating.

Please read my post a few pages back. AMD has forced all game developers (besides WiiU) to program for HSA. Not only that, but PS4 will use the open source versions (openCL) and MS will further develop DirectCompute, and it's all going to be built around AMD HSA.

There will be more HSA accelerated games in the first year of PS4 and Xbone selling consoles than CUDA accelerated games have been created.

Given AMD's long term goals of HSA, getting PS4 and Xbone would be wise, even if they were losing money.

Let me put this on the theoretical other foot. Nvidia gets the big two consoles, all of them are CUDA accelerated GPUs, and Sony and MS have plans to use the GPGPU acceleration. Would that not be amazing for CUDA?

AMD is going to advance HSA, get software optimized for their hardware, and make money doing it. Contrast this with TWIMTBP or Intel where they pay people to optimize for their hardware.

It's too bad people are so biased against AMD. If you think hard enough about it they're just laying the foundation for now.
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post #90 of 156
Quote:
Originally Posted by TheLawIX View Post

At this point not buying next gen AMD GPU's is pointless. Not sure if the APU's are worth it yet though.
Until we start seeing some heavy mutli-threaded games, AMD is still held back by poor single thread performance.
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