Two of tech's biggest competitors are taking a very different approach to the next generation of gaming with Sony and Android, but which is making the right moves?
Earlier this month, Sony took to the stage in New York and unveiled the PlayStation 4. And as expected, the internet--at least within gaming circles--went into meltdown. All the classic console-launch moments were there: visually striking demos, a new controller, masses of mind-numbing exec-speak, and yes, even talk of polygons. But the most interesting part of the presentation arrived early on. There, Sony revealed the hardware that would be powering its new socially aware games console, and it was a world away from the complex, supercomputer-power touted by the PS3 and its Cell processor.
With the PS4, Sony has taken what are essentially off-the-shelf PC parts and used them to build a console. That's exciting for lots of reasons: the system should be easier to develop for, and porting games from PC to console or vice-versa should be easier too. But the switch to x86 has ramifications outside of just games development. For the company behind the hardware in the PS4, it's a potential financial boon. That company is AMD, a US-based chip-maker that's been making chips since 1969.
Judging by AMD's current balance sheet, it'll no doubt be hoping that its place in the PS4 (as well as the Wii U, and potentially the next Xbox) proves lucrative. Just recently it sold its Austin-based HQ for $164 million to raise cash, while a leading analyst called it "un-investable" following an operating loss of $131 million in its quarterly earnings report. Those aren't pretty numbers for a company that was once trading at over $40 dollars a share: today its shares are worth a mere $2.60 each.
The question is how much those console deals are worth to AMD. While they're certainly not the only thing the company has going for it--its upcoming roadmap of APUs and GPUs have generally been well received--the console deals provide a steady stream of income. Indeed, the company noted on its end of year financial statement that declines in its graphics segment were "partially offset by a seasonal increase in game console revenue", so for AMD at least, the sector remains a valuable one. But its competition is fiercer than ever. Intel has gone from strength to strength with its desktop and laptop chips, while ARM continues to dominate in mobile, a market that is growing at an extraordinary rate: the most recent IDC numbers show tablet shipments at well over half of that of PC shipments and growing fast.
Judging by AMD's current balance sheet, it'll no doubt be hoping that its place in the PS4 proves lucrative.
That's bad news for AMD, which currently doesn't even have a mobile and tablet chip on the market. Meanwhile, Intel is slowly beginning to compete with its refreshed Atom CPUs, but it's AMD's other competitor that poses the greatest threat: Nvidia. For years now the two companies have been battling it out in the GPU market, and both have claimed to offer the world's fastest GPU in the past. But unlike AMD, Nvidia is posting record profits--around $174 million according to its last earnings call. And it does have a chip for mobile in the form of Tegra, not to mention it holds the current crown in GPU performance with Titan.
For AMD then, the console market is more important than ever. And that's not just from a monetary point of view: there's the potential to capture the hearts and minds of gamers and developers too. After all, if developers are primarily targeting consoles--which for the moment remains the most popular platform for playing games outside of Angry Birds--then it stands to reason they would choose to develop on AMD hardware, or make optimisations for console that are easily translated over to desktop AMD GPUs. That might not spell total disaster for Nvidia, but it could start a worrisome trend that sees developers and consumers move away from its hardware to that of its chief competitor.
It's a worry that we put to Tony Tamasi, the senior VP of content and technology at Nvidia: "Let's assume that you're right, and both Sony and Microsoft are built off an AMD chip", Tamasi told us, "we're actually kind of excited by it."
"Developers actually develop on a PC. The problem today is that when they target a console, they're targeting a piece of hardware that's more than an order of magnitude lower power than today's PCs. And frankly, that really holds back content developers. So while they could do amazing DX11 compute and awesome shader things on the PC, the fact that they have to support these very old, very low performance consoles (PS3, Xbox 360)--one of which is of course based on Nvidia--is a bummer. It impedes the content development."
"The fact the next generation consoles are kind of mid-range PCs is a good thing. From an optimisation perspective the next consoles are based on x86 CPUs, and based on essentially current generation GPUs, so there's really nothing special there. In the end, developers are trying to deliver the best experience on any platform that their game runs on. Having been through Xbox one and PS3, I can tell you that plenty of games that ran on a PS3 or ran on the first Xbox didn't have any uniquely optimised or differentiated behaviour on Nvidia on a PC than they otherwise would have had."
For Nvidia, it seems that any PC hardware in a console can provide benefits to the PC market, whether it uses the company's hardware or that of its competitor. Perhaps we won't see any AMD optimisations: only time will tell. Regardless, Nvidia has decided it doesn't want to be a part of the next-gen consoles: its hardware is nowhere to be seen in the PS4, the Wii U, or--if the rumours prove true--the next Xbox either. The question is, why not?
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