AMD declining R&D budget....

lordfletch · 1 Apr 2015 at 19:45

D.P. said:
None of that negates what I said, it just reinforces it. AMD can increase revenue further in the Chinese console market but still suffer tiny margins. That doesn't help them long term.

i just cant see how you can put a negative spin on that, what is amds profit margin on their console chips, per unit ?

Orangey · 1 Apr 2015 at 19:54

20+%, the chips are reputed to cost $100, so a very easy calculation.

I just had a thought, maybe they're rushing out HBM so they can shop it as part of a solution in the next consoles.

lordfletch · 1 Apr 2015 at 20:05

maybe, but there is such a long time between console refreshes 5 years + ?

Rroff · 1 Apr 2015 at 20:20

layte said:
The Author appears to have money invested in AMD and all his recent posts seem to try and put a positive spin on any bad news for the company.

Hmmm...

It certainly reads to me like an article intended to try and influence AMD stock or associated stock one way or another.

D.P. · 1 Apr 2015 at 21:04

lordfletch said:
i just cant see how you can put a negative spin on that, what is amds profit margin on their console chips, per unit ?

I'm not putting negative spin on it, I simply said: ".That will keep them alive but wont let them flourish."

Which is exactly right. High revenue with minimal profits keeps the cogs turning but is ultimately a costly game because without high profits R&D budget will decline further.

There is a simple test for the benefits. Compare AMD's total profit vs Nvidia's, Nvidia is certainly not suffering the lack of console sales. Nvidia knew their business model, bottom-line profit margins and weren't willing to drop lower. Nvidia can now spend more R&D in less field than AMD can.

lordfletch · 1 Apr 2015 at 22:35

d.p. do you realise how big the console market is in china,the young Chinese have the disposable income and want what the people in the west have.its a salesman's *** dream (virgin market apart from smuggled consoles)and you are telling me that nvida didnt want a part of that ?

layte · 1 Apr 2015 at 22:47

Nvidia seem to be doing quite all right in China already, judging by the number of weird Chinese only games that have NV only features (they seem to like PhysX). I think they would be happier selling GPU's with big fat margins, rather than scrabbling in the dirt for pennies which is how the console part supplier market works (just how long have people been saying the consoles will make AMD mega $$$ yet their income keeps dropping).

The only people who make money from consoles are the platform holders and a few mega publishers.

Gregster · 1 Apr 2015 at 22:54

layte said:
Nvidia seem to be doing quite all right in China already, judging by the number of weird Chinese only games that have NV only features (they seem to like PhysX). I think they would be happier selling GPU's with big fat margins, rather than scrabbling in the dirt for pennies which is how the console part supplier market works (just how long have people been saying the consoles will make AMD mega $$$ yet their income keeps dropping).

The only people who make money from consoles are the platform holders and a few mega publishers.

Yer, nVidia do very well in China and as you say, they love PhysX and seem to get lots of it... I played a couple of the games and had absolutely no idea what was going on though

I always thought the consoles were pretty much sold as a loss and it was the games that made the profit and if this is still the case, there won't be much in the margins. No idea on what AMD make per unit though, so that could be a mile out but when the PS4 and Xbone launched, there didn't appear to be much profit in those quarters going by AMD's financials.

lordfletch · 1 Apr 2015 at 22:58

layte said:
Nvidia seem to be doing quite all right in China already, judging by the number of weird Chinese only games that have NV only features (they seem to like PhysX). I think they would be happier selling GPU's with big fat margins, rather than scrabbling in the dirt for pennies which is how the console part supplier market works (just how long have people been saying the consoles will make AMD mega $$$ yet their income keeps dropping).

The only people who make money from consoles are the platform holders and a few mega publishers.

i don't disagree that nvida are doing well, fair play to them,but why did they even bother bidding on the contracts in the first place if they were worthless?

kazuya1337 · 1 Apr 2015 at 23:00

Orangey said:
It looks like they are finally putting the 20nm shrinks in the consoles now, nabbed a few extra customers, semi-custom biz looks good. They should also be shopping for chips for the PS5/Xbone Two before long, wonder what AMD will be looking to sell. Hopefully Zen and not Carrizo or some bilge.

PS5/XTwo will never be made, Microsoft if you read between the lines are aiming for the Steambox and the SteamOS scenario where they get the money for it running W10 and DX12 but don't have to also waste hundreds of millions developing their own console. Sony is also in the same boat but what they will do is unknown but I'm betting against a PS5.

layte · 2 Apr 2015 at 00:06

lordfletch said:
i don't disagree that nvida are doing well, fair play to them,but why did they even bother bidding on the contracts in the first place if they were worthless?

I believe they withdrew once they saw what MS and Sony were willing to pay, AMD were willing to accept the margins.

Orangey · 2 Apr 2015 at 00:18

They withdrew because they couldn't beat AMD's solution, what did they even have to offer at the time? Tegra 2? Fermi? LOL.

They knew what the margins would be from the get-go. They were in the original Xbox.

Meladath · 2 Apr 2015 at 00:33

Gregster said:
I always thought the consoles were pretty much sold as a loss

This was almost always the case, at least until this current gen. Thats one of the main reasons why they are both weak and expensive in comparison to older gens, MS and sony tried to double dip

Orangey · 2 Apr 2015 at 00:43

Nintendo showed it could be done, but it's backfired bigtime with only PS4 being able to barely handle 1080p in a few highly engineered games at <30fps. As a result PC gaming is drawing in record numbers of wide-eyed players, of course they also dream of becoming famous streamers.

They had it right first time, subsidize the hardware, make it within the reach of every screaming kid's xmas list and reap the rewards from COD/Halo.

layte · 2 Apr 2015 at 00:46

Orangey said:
They knew what the margins would be from the get-go.

That's not how tenders work.

Orangey · 2 Apr 2015 at 00:50

layte said:
That's not how tenders work.

They knew they'd be low. Don't know why I'm bothering to get into this with you as you are incapable of breaking from the NV good / AMD bad mindset.

humbug · 2 Apr 2015 at 01:17

Last year, AMD announced it had secured two semi-custom design wins that will launch in 2016 and produce a billion dollars in revenue over the course of each product's lifetime. One win is for a gaming console, and one is ARM-based, which could be for a handheld gaming console (skeptical about this) or a dense server to fulfill its recent ARM-based server efforts. Either way, AMD is new to ARM and with most or all of the costs of such a project being billed to the customer as a non-recurring engineering expense, the knowledge and expertise incurred would be huge for AMD. Although I can't say that these engagements are enough to offset the reductions in R&D spending, it is easy to view these developments as valuable assets that, at least partially, address the myth of 'AMD's rapidly falling and dangerously low R&D investments.'

lordfletch · 2 Apr 2015 at 01:23

layte said:
I believe they withdrew once they saw what MS and Sony were willing to pay, AMD were willing to accept the margins.

they would say that whether its true or false, now im not claiming to know which it is just an observation. i dont have leanings towards amd or nvidia, i just wouldn't like to see either leave the pc desktop market it would be a disaster for us.
i don't know how much profit if any sony or microsoft make on a console, but the Chinese market is massive and amd will have a contract saying how much they get per unit, which sony/microsoft are willing to pay, so the console profit/lose may be a moot point.

(amd may have nintendo as well)

humbug · 2 Apr 2015 at 02:04

lordfletch said:
they would say that whether its true or false, now im not claiming to know which it is just an observation. i dont have leanings towards amd or nvidia, i just wouldn't like to see either leave the pc desktop market it would be a disaster for us.
i don't know how much profit if any sony or microsoft make on a console, but the Chinese market is massive and amd will have a contract saying how much they get per unit, which sony/microsoft are willing to pay, so the console profit/lose may be a moot point. (amd may have nintendo as well)

Its $100 - $120 for every console sold.

Spook187 · 2 Apr 2015 at 02:31

kazuya1337 said:
PS5/XTwo will never be made, Microsoft if you read between the lines are aiming for the Steambox and the SteamOS scenario where they get the money for it running W10 and DX12 but don't have to also waste hundreds of millions developing their own console. Sony is also in the same boat but what they will do is unknown but I'm betting against a PS5.

Are you mad, i would bet you 50 notes no lets make it a £100 there will be a PS5 or whatever it's called, i am a man of my word, lets make a deal.