The Real Winner of the Console Wars: AMD.

In the general computing game you’d be forgiven for thinking there’s 2 rivals locked in a contest for dominance. Sure there’s 2 major players, Intel and AMD, and whilst they are direct competitors with each other there’s no denying the fact that Intel is the Goliath to AMD’s David, trouncing them in almost every way possible. Of course if you’re looking to build a budget PC you really can’t go past AMD’s processors as they provide an incredible amount of value for the asking price but there’s no denying that Intel has been the reigning performance and market champion for the better part of a decade now. However the next generation of consoles have proved to be something of a coup for AMD and it could be the beginnings of a new era for the beleaguered chip company.

AMD LogoBoth of the next generation consoles, the PlayStation 4 and XboxOne, both utilize an almost identical AMD Jaguar chip under the hood. The reasons for choosing it seem to align with Sony’s previous architectural idea for Cell (I.E. having lots of cores working in parallel rather than fewer working faster) and AMD is the king of cramming more cores into a single consumer chip. Although the reasons for going for AMD over Intel likely stem from the fact that Intel isn’t too crazy about doing custom hardware and the requirements that Sony and Microsoft had for their own versions of Jaguar could simply not be accommodated. Considering how big the console market is this would seem like something of a misstep by Intel, especially judging by the PlayStation4’s day one sales figures.

If you hadn’t heard the PlayStation 4 managed to move an incredible 1 million consoles on its first day of launch and that was limited to the USA. The Nintendo Wii by comparison took about a week to move 400,000 consoles and it even had a global launch window to beef up the sales. Whether the trend will continue or not considering that the XboxOne just got released yesterday is something we’ll have to wait to see but regardless every one of those consoles being purchased now contains in it an AMD CPU and they’re walking away with a healthy chunk of change from each one.

To put it in perspective out of every PlayStation 4 sale (and by extension every XboxOne as well) AMD is taking away a healthy $100 which means that in that one day of sales AMD generated some $100 million for itself. For a company who’s annual revenue is around the $1.5 billion mark this is a huge deal and if the XboxOne launch is even half that AMD could have seen $150 million in the space of a week. If the previous console generations were anything to go by (roughly 160 million consoles between Sony and Microsoft) AMD is looking at a revenue steam of some $1.6 billion over the next 8 years, a 13% increase to their bottom line. Whilst it’s still a far cry from the kinds of revenue that Intel sees on a monthly basis it’s a huge win for AMD and something they will hopefully be able to use to leverage themselves more in other markets.

Whilst I may have handed in my AMD fanboy badge after many deliriously happy years with my watercooled XP1800+ I still think they’re a brilliant chip company and their inclusion in both next generation consoles shows that the industry giants think the same way. The console market might not be as big as the consumer desktop space nor as lucrative as the high end server market but getting their chips onto both sides of the war is a major coup for them. Hopefully this will give AMD the push they need to start muscling in on Intel’s turf again as whilst I love their chips I love robust competition between giants a lot more.

 

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