Nvidia: Not Enough Money in a PS4 GPU for us to bother

[n0x1ous]

http://www.engadget.com/2013/03/14/nvidia-playstation-4/

I think going with the AMD APU made sense for the consoles so I don't know that MS or Sony would have wanted to go with Nvidia this round anyway, but I also agree with Nvidia that its not a real money maker by any stretch.

I mean AMD/ATI has had GPU's in consoles for a long time and dont have jacksh*t to show for it.....and Nvidia's Xbox and PS3 deal were never a big profit maker for them either. Steady revenue stream (which is important for AMD) but profit, not really.

Interesting to actually get a confirmation on the low profitability of this type of contract though.

 

[BallaTheFeared]

I think it makes sense, Nvidia has a lot of wafer needs now, adding in a high volume low profit chip without any extra wafers doesn't really add up well for them.

Don't we assume already that they're wafer supply constrained?

 

[n0x1ous]

I think it makes sense, Nvidia has a lot of wafer needs now, adding in a high volume low profit chip without any extra wafers doesn't really add up well for them.

Don't we assume already that they're wafer supply constrained?

Yes agreed. I don't think it would have been a worthwhile pursuit for them

 

[thilanliyan]

Makes sense considering all the other products they have on the go.

I wonder how much money is actually being offered for the PS4 chips...?

 

[OS]

I don't think Nvidia has much in the way of CPU technology anyways, all the consoles are probably asking for integrated solutions now, it may simply have been feasible for AMD but not for Nvidia.

 

[blackened23]

I dunno. I came away from the articles reading something different, nvidia was referring to opportunity costs. It sounded like they didn't want to spend engineering resources on consoles and divert their existing engineers away from tegra, that was pretty much my interpretation. And that would be a valid decision for nvidia since their tegra processors in the past have done very well.

As for profitability, no one knows. AMD is selling per chip and not just a flat rate (which differs from prior consoles) which is due to the technology being x86.... x86 cannot be licensed (and nvidia is unable to provide x86 anyway) , so there is potential for higher profitability with a per chip contract. Nobody knows really. Basically, AMD is providing something that nvidia cannot provide - nvidia doesn't have an x86 license. Both microsoft and sony specifically sought out the x86 architecture because that is what developers want. AMD can do that while nvidia cannot.

 

[wand3r3r]

I assume some industry expert will do a BOM assessment once it's released like you see for the iphone etc. They will get a ballpark, probably within a margin of error guesstimate.

Like this:
(lumia 900 vs some samsung)
http://www.isuppli.com/Teardowns/News/pages/Nokia-900-Carries-Bill-of-Materials-of-$209.aspx

iphone 5 ($199)
http://www.isuppli.com/Teardowns/News/pages/iPhone5-Carries-$199-BOM-Virtual-Teardown-Reveals.aspx

Price increases for each model.
16 GB costs $207 manufactured
32 GB costs $217 manufactured
64 GB costs $238 manufactured

Something on the PS3, from 09.
http://www.isuppli.com/Teardowns/Ne...n-Point-with-Latest-PlayStation-3-Design.aspx

Interesting how they change it over time.

Cost Consciousness
To reduce costs, this design of the latest-generation PlayStation 3 is significantly revised from previous versions. The major changes involve the use of less expensive semiconductors, a general redesign of the product and a reduction in the number of components in the console.

The new version employs some critical semiconductors that are manufactured, using more advanced semiconductor manufacturing technology at the 65-nanometer and 45-nanometer nodes. Such chips are less expensive than those using older processes employed in previous-generation PlayStation 3 consoles.

The new chips also cut the power usage of the PlayStation 3, allowing design changes that reduce hardware costs. The new system cuts the energy budget nearly in half from the first-generation hardware as the new PS3 employs a 220-watt master power supply, compared to a 400-watt supply in the first version. The lower wattage reduces the cost of the power supply as well as other power and cooling components.

Given its extensive range of capabilities, the PlayStation 3 has always been a complex product with a large number of components. But the latest version is simplified considerably in terms of not only component and subsystem counts but also overall complexity. Excluding the controller and the box contents, the latest version of the PlayStation 3 includes approximately 2,568 components—down from 4,048 in the original version.

 

[Lonyo]

Makes sense for NV to say no, since they would only be doing the GPU.
For AMD, they have got the CPU and GPU, so even if the GPU alone wouldn't be totally worth it, the combined CPU+GPU will be, especially given their excess production capacity (assuming they can make them at GloFo at some stage).

 

[badb0y]

For what the console makers want AMD seems to be the only choice on the market.

 

[BallaTheFeared]

Only if you assume what the console makers want is what the only company within their price range offers.

I can't imagine anyone at Sony was overly ecstatic about a crappy 8 core Jaguar piggybacking in on that deal.

 

[blackened23]

Here's the full original, by the way:

http://www.gamespot.com/news/ps4-not-worth-the-cost-says-nvidia-6405300

"We're building a whole bunch of stuff," continued Tamasi, "and we had to look at console business as an opportunity cost. If we say, did a console, what other piece of our business would we put on hold to chase after that?"

"In the end, you only have so many engineers and so much capability, and if you're going to go off and do chips for Sony or Microsoft, then that's probably a chip that you're not doing for some other portion of your business. And at least in the case of Sony and Nvidia, in terms of PS4, AMD has the business and Nvidia doesn't. We'll see how that plays out from a business perspective I guess. It's clearly not a technology thing."

I really think they wanted to focus on Tegra, this is why they're discussing engineering priorities and opportunity costs. That is a more profitable business for nvidia in the long term if they can maintain traction (and so far they have).

 

[tviceman]

I think it would be a lower profitability situation for Nvidia more so than AMD, since if Nvidia supplied the GPU, Sony (and / or MS) would still need to contract out the CPU, thus raising the costs for having two chips instead of one and also having to deal with the components necessary for the extra cooling required. There is only so much money Sony and/or MS is willing to spend on component costs. With AMD supplying an APU, margins can be higher on a single chip that servers a dual-purpose.

EDIT: I still think Nvidia will end up in Valve's upcoming hardware, based on their collaboration with Linux performance and also based on some comments Gabe Newell has made here and there. If AMD GPU's were to end up inside Valve's steam box, and if the Steam Box is successful (which I think long-term it will be), IMHO Nvidia's video card business will suffer dramatically in the future.

 

[gorobei]

there hasnt been any real profitability in gpu designing for consoles simply because sony and ms wont allow it(ms learned their lesson after xbox1). you need total control of costs and the chip design.

since sony and ms needed the lower costs of coding for x86 this round, amd is their only option. intel doesnt have the graphics yet and nvidia only has arm for cpu. the fact that amd is in financial distress just makes it gravy on top when it comes to negotiations.

the upside for amd isnt the possible revenue from the x86 license, but rather that gamestudio programmers get used to coding for direct access to GCN and openCL. the more people using those features means that their APU divisions can gain some advantage down the line. if a game takes advantage of direct to silicon calls to GCN, a laptop with an amd APU could see some real performance gains that marketing could use as a real selling point.

 

[nanaki333]

i thought everyone went to AMD because nvidia was charging stupid amounts for their GPUs anyway? maybe that was just the original xbox though.

 

[notty22]

After AMD presented the designs and won the contracts, the engineering is basically over. That goes for either company. This is why many of the layoffs were from the gpu division, last year.
Nvidia would have had to shift, from somewhere and that evidently wasn't cost effective.
Imo, it would have been engineering work more similar to mobile discrete gpu's.

Anand Mandapati & David Wang: Key Console and Desktop GPU Architects Leave AMD

Report: AMD to Cut Up to 30 Percent of Engineering Staff in Coming Weeks

 

[BallaTheFeared]

So wait, AMD used those guys to get the design, then fired them?

 

[Eureka]

So wait, AMD used those guys to get the design, then fired them?

Sounds like corporate greed to me. When I worked at JnJ they would hire an entire department for a new project and then unhire them when it was done.

Been saying this for a while but AMD is no shining star... They offer cheaper gpus than nvidia, and that's it.

 

[OILFIELDTRASH]

Nvidia is printing money with their GPU's. Especially the titan. I still can't believe they are selling for a grand. Makes me wonder if the next titan will start off at $1200?

 

[n0x1ous]

Sounds like corporate greed to me. When I worked at JnJ they would hire an entire department for a new project and then unhire them when it was done.

Been saying this for a while but AMD is no shining star... They offer cheaper gpus than nvidia, and that's it.

Also a common practice at some game developers unfortunately. Particularly ones under the umbrella of a big publisher like Activision.

I know this happens at Raven software for example.

 

[railven]

Also a common practice at some game developers unfortunately. Particularly ones under the umbrella of a big publisher like Activision.

I know this happens at Raven software for example.

This is common practice every where. Department stores, fabrication industries (well where everything isn't fully automated.)

You hire extra for crunch time, once crunch time is done you fire the excess.

My place hired extra temps during the flu season, they all got axed when that was over. No crocodile tears were shed.

 

[notty22]

The process keeps head hunters in business. The big difference is a company can excel on engineering talent. And maybe die by it. But it's often why companies hang on to the talent. ATI engineers were still noted when part of AMD for over 6 years, because they were the 'brains'. Most are now gone, after the last cuts.

 

[railven]

The process keeps head hunters in business. The big difference is a company can excel on engineering talent. And maybe die by it. But it's often why companies hang on to the talent. ATI engineers were still noted when part of AMD for over 6 years, because they were the 'brains'. Most are now gone, after the last cuts.

And that's exactly why AMD will go down in records for being one of the worst managed companies ever.

All they need to do is cook the books and they'll take Enron's spot.

 

[DaveSimmons]

AMD was already in the single-chip x86 CPU+GPU business, with existing designs and the engineering experience to tweak them.

Neither MS or Sony wanted just ARM cores, so using nvidia would not have made much sense if you wanted an integrated single-chip solution.

 

[Olikan]

I can't imagine anyone at Sony was overly ecstatic about a crappy 8 core Jaguar piggybacking in on that deal.

i can...not about the cpu per-se, but the shared memory in pool that comes with it...and the easy to deal with x86

 

[SickBeast]

With the PS4 running x86 it's probably only a matter of time before it's hacked and people install Windows or Linux on the thing to run PC games.