Originally Posted by Born For TDM
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.
"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."
"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
"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.
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