News Intel reportedly lost PlayStation 6 chip design contract to AMD in 2022 — the $30 billion deal was up for grabs

[Admin]

Intel lost out to AMD in its bid to design and fabricate processors for the upcoming Sony PlayStation 6. According to three insiders, Intel and AMD were the two final contenders in the PS6 chip design and fabrication tender.

Intel reportedly lost PlayStation 6 chip design contract to AMD in 2022 — the $30 billion deal was up for grabs : Read more

 

[TheSecondPower]

I wouldn't be surprised if AMD makes almost no profit on the PS6 chips. An article the other day said that AMD is focusing on volume over margin. AMD graphics is chiefly focused on getting developer support, and this is one way to do that.

The contract was made in 2022 though? The PS5 came out in 2020 and console generations are usually around 6 years. They seriously chose the chip 4 years in advance of release?

 

[DS426]

I wouldn't be surprised if AMD makes almost no profit on the PS6 chips. An article the other day said that AMD is focusing on volume over margin. AMD graphics is chiefly focused on getting developer support, and this one way to do that.

The contract was made in 2022 though? The PS5 came out in 2020 and console generations are usually around 6 years. They seriously chose the chip 4 years in advance of release?

But doesn't AMD have better net margins than Intel? Such is already strange as obviously AMD's margins from PS and Xbox chip revenue has to be tiny -- maybe low double-digits?

Either way, unused fab capacity is far worse for Intel than having low margins (at least having money to keep the lights on), so I wonder if it goes back to "the old guard" executives and upper-management who are contributing to Intel's downfall as of lately.

 

[Giroro]

Nobody's talked about Intel being interested in gaming consoles for maybe over a decade, but then this story comes out a few days after I speculate Microsoft would be seriously considering Intel if they want to rush out a next-gen console and beat PS6 to market.
That's a weird coincidence.

I also said it's likely Intel would lose to Qualcomm as a smaller/cheaper/"cuter" Xbox would be a significant reason behind Microsoft's big push for ARM compatibility - so we'll see if they can make ARM good enough at gaming to maintain backward compatibility.
I don't think Microsoft is willing to compromise on backwards compatibility, which would be the main reason to use Intel. They wouldn't have much choice as a rushed next-box (with a terrible name) would take a pretty convoluted brand and make it even worse.

 

[bit_user]

The Reuters sources say that Intel and its foundries division were bidding competitively against AMD and TSMC for the PS6 chip sometime in 2022.

Pfft. If you just think back to the state of Intel's dGPUs in 2022, it's hardly any surprise they lost it! Their GPUs looked good on paper, but woefully underprerformed according to their specs (and they still do, in many cases). You can't prove it was just the drivers that were at fault, until you actually fix the drivers, and that didn't even start happening until late 2022.

Then again, the article does cite financial disputes as the deal-breaker. However, if Intel had the same kind of GPU track record as AMD, I have to wonder whether it'd have strengthened their hand in the negotiations.

The chip design and manufacturing foes, the last contenders with hope for the lucrative contract after Broadcom was sidelined

Again, this is laughable. I can't fathom how Broadcom hoped to compete on the GPU front. The only real contender would've been Nvidia. Since Sony was considering Broadcom, they must apparently be considering an ISA switch to ARM or RISC-V, which would definitely open up the field to include Nvidia (if they even wanted to bid).

I do sort of doubt PS6 will be backwards compatible with PS4, however. And this is probably due to the GPU ISA, not the CPU. PS4 was GCN-based, and RDNA has (thus far) included GCN backwards compatibility, but at what cost? It wouldn't surprise me for AMD to drop that, in RDNA 4 or 5 (or the subsequent UDNA that AMD recently announced).

 

[bit_user]

Nobody's talked about Intel being interested in gaming consoles for maybe over a decade, but then this story comes out a few days after I speculate Microsoft would be seriously considering Intel if they want to rush out a next-gen console and beat PS6 to market.

With Intel's dGPU push, at the time, it would've seemed a natural way to try and further monetize those efforts. Also, even back then, there were leaks of upcoming laptop SoCs with huge iGPUs, making it clear that cross-pollination was happening between the dGPUs and iGPUs.

 

[Notton]

From the consumer perspective, ARM or x86 doesn't matter for a gaming console that has to be plugged into a wall outlet.

What matters more is how easy it is to develop games on the platform, and for that AMD Zen2 and RDNA3 was something many game devs were familiar with.

By going with AMD again, transition to a new platform would be simpler, and you most likely retain backwards compatibility.

If anyone recalls the development hell of consoles switching their processor type between generations, or PC↔Console ports that performed like trash.

 

[jlake3]

Nobody's talked about Intel being interested in gaming consoles for maybe over a decade, but then this story comes out a few days after I speculate Microsoft would be seriously considering Intel if they want to rush out a next-gen console and beat PS6 to market.
That's a weird coincidence.

I also said it's likely Intel would lose to Qualcomm as a smaller/cheaper/"cuter" Xbox would be a significant reason behind Microsoft's big push for ARM compatibility - so we'll see if they can make ARM good enough at gaming to maintain backward compatibility.
I don't think Microsoft is willing to compromise on backwards compatibility, which would be the main reason to use Intel. They wouldn't have much choice as a rushed next-box (with a terrible name) would take a pretty convoluted brand and make it even worse.

There were rumors circulating that Microsoft was considering Intel for the next-gen Xbox back in February of this year, then later that month there were further rumors that the deal had supposedly fallen through. It was not stated in those rumors whether AMD got the contract instead, or if they may be switching to ARM.

 

[JarredWaltonGPU]

With Intel's dGPU push, at the time, it would've seemed a natural way to try and further monetize those efforts. Also, even back then, there were leaks of upcoming laptop SoCs with huge iGPUs, making it clear that cross-pollination was happening between the dGPUs and iGPUs.

Yeah, given the time frame, I don't see how Sony ever would have really given Intel a serious thought on the hardware side of things. Having Intel fab AMD or Nvidia chips would have been more viable, but even that would be a hard sell. Sony has no need to prop up the US foundry industry.

In 2022, Intel Arc was just barely out the door and failing to impress. Sony would have been taking a serious gamble in trusting Intel to make something better for PS6 in 2027. There are a lot of people already doubting Intel will keep doing dedicated GPUs. Battlemage needs to be amazing, in other words.

 

[Giroro]

I wouldn't be surprised if AMD makes almost no profit on the PS6 chips. An article the other day said that AMD is focusing on volume over margin. AMD graphics is chiefly focused on getting developer support, and this one way to do that.

The contract was made in 2022 though? The PS5 came out in 2020 and console generations are usually around 6 years. They seriously chose the chip 4 years in advance of release?

Choosing who will make the chip isn't the same thing as choosing the chip. Consoles are custom/Semi-custom - which takes a couple years to design and qualify. You have to decide who will design the chip before you can start designing the chip. Then you have to get "close enough" dev-kits together and give developers time to make launch titles, which is another couple years.

*Alternatively* 2022 could have also been a reasonable timeline for an iteration of current hardware. As a random example, If Sony wanted to release some kind of giant, overpriced, feature-stripped PS5 "Pro" for drunk college kids who blame the console itself as the reason their $150 copy of Madden looks and plays like free-to-play crap.

I would expect next gen as to start 2026 at the absolute earliest if Microsoft is smart and tries to end this generation ASAP, with PS6 coming later, maybe even 2028. PlayStation is comfortably in the lead for hardware sales, and AMD just doesn't look like they have any big ideas in the pipeline to provide a meaningful or transformative "next gen" experience in the next couple years - so I expect Sony will drag out this generation as long as they can.

 

[umeng2002_2]

From a business perspective, Intel and nVidia are made for each other.

 

[Amdlova]

If Sony change the CPU for Arm I Think will be easier to Jail Broken.
Xbox one and Xbox series With AMD desing Never got a HIT
The Nitendo has defeat with a paper clip using nvidia.

If as a reason to keep AMD is the Fear of mods or Jail broken.

 

[vanadiel007]

It all makes sense to me. AMD is integrated both in CPU and GPU design. Being able to run a PS and potentially an XBOX all on the same AMD hardware will be a big boon for developers as many games are ported over from consoles these days.

It now makes more sense why AMD said they will not focus as much on the high end GPU market and instead focus on midrange GPU's, as that would roughly provide the same power as the PS hardware in terms of graphical performance.

But it is another serious issue for Intel as they seem to be going downhill faster and faster.

 

[logainofhades]

I wouldn't be surprised if AMD makes almost no profit on the PS6 chips. An article the other day said that AMD is focusing on volume over margin. AMD graphics is chiefly focused on getting developer support, and this is one way to do that.

The contract was made in 2022 though? The PS5 came out in 2020 and console generations are usually around 6 years. They seriously chose the chip 4 years in advance of release?

Chip design can take years to complete.

 

[Gururu]

Sony knows what it wants, and I am sure both companies would deliver, but I can see why Intel might have negotiated harder since they more than likely would have been paying more for labor at the U.S. fab. That’s assuming operating costs in Taiwan are more than U.S. and that the chips aren’t being made at TMSC Arizona.

 

[-Fran-]

Hm... I have a feeling it was also because AMD actually collaborates with Sony to design, but I have the feeling Intel was more "gives us* your reqs and we'll build it behind closed doors".

If rumours are to be believed, Sony dodged a HUGE bullet with Broadcom's burn.

Regards.

 

[Giroro]

From the consumer perspective, ARM or x86 doesn't matter for a gaming console that has to be plugged into a wall outlet.

I disagree, I think it matters a lot. Wattage dictates cooling, and cooling dictates the console's physical size and shape.

Size and convivence are both big factors in why somebody would choose one console over another, or a console over a PC. More often than not the company able to make the smallest console also happens to win its generation.
PSone, PS2 (slim), Wii, PS4, and Switch.
Granted the definition of a generation weird right now with the Switch being a trans-generational sortof-handheld, and the Xbox Series S being a weird little stripped-down half-step thing that developers hate... and most those winners were already in the lead before getting out their smallest version.

But still, when a console weighs 10 pounds and is the size of a man's torso, then a bunch of people are going to have to think about if saving a little money (up front) is really worth it over a gaming laptop that performs better at half the weight, has more features, open platform, long-term cost savings on subscriptions/games, etc.

 

[Murissokah]

Hard to imagine this going Intel's way. Back when they had the advantage in CPUs it was already a hard sell as they lacked the GPU tech to compete. Now that AMD is at least as competent in CPUs it's hard to imagine Sony taking a chance on an Arc GPU.

 

[hotaru251]

Intel's foundry image was damaged by...Intel. When you the owner won't use your foundry for your top of the line cpu's and instead announce you outsourcing to TSMC for them...they basically stated "we know we arent the best" & companies who want a top of the line system arent going to settle for 2nd best.

 

[thestryker]

The contract was made in 2022 though? The PS5 came out in 2020 and console generations are usually around 6 years. They seriously chose the chip 4 years in advance of release?

Recent generations have been longer so 2027-2028 for PS6 isn't unreasonable especially with the refresh just announced.

Xbox 360: Nov 2005
Xbox One: Nov 2013
Xbox Series: Nov 2020

There's an absurd amount of speculation that goes into making consoles these days due to manufacturing costs. The Xbox Series X ($499 MSRP) SoC is larger than a 6700 XT ($479 MSRP) which should provide some context for margins (picked because same node used). Chances are the console manufacturers have a performance target and those competing for the SoC pitch how they'll get there. For example in 2022 I'd be surprised if most of the Zen 6 framework wasn't already done so while there may not have been a power on they have performance estimates. While GPU technology is a little more fluid I'd imagine RDNA 4 was already done with 5 laid out. This is why we've seen semi hybrid GPUs in the last two generations of consoles as opposed to them matching a single GPU generation.

 

[thestryker]

Then again, the article does cite financial disputes as the deal-breaker. However, if Intel had the same kind of GPU track record as AMD, I have to wonder whether it'd have strengthened their hand in the negotiations.

It wouldn't have and I can't imagine anyone at Intel has forgotten what Microsoft pulled. They likely wanted something along the lines of minimum guarantees for the lifetime of the product.

With Intel's dGPU push, at the time, it would've seemed a natural way to try and further monetize those efforts. Also, even back then, there were leaks of upcoming laptop SoCs with huge iGPUs, making it clear that cross-pollination was happening between the dGPUs and iGPUs.

Only if the margins were right would it have made any sense because Intel would have to be using Intel 3/18A. They also haven't made any of their current GPU IP on Intel process nodes so while that wouldn't be a deal breaker is another level of potential complexity. We are talking a part that likely wouldn't be finalized until next year though so that bit may be irrelevant.

Pfft. If you just think back to the state of Intel's dGPUs in 2022, it's hardly any surprise they lost it! Their GPUs looked good on paper, but woefully underprerformed according to their specs (and they still do, in many cases). You can't prove it was just the drivers that were at fault, until you actually fix the drivers, and that didn't even start happening until late 2022.

I'd be shocked if Intel Arc GPUs had anything to do with Intel not getting this contract. There are some very real mistakes which were made with the design that Intel knows about so it wouldn't be particularly hard to lay all that out for a pitch like this. Also. remember there aren't a litany of specifications and APIs that consoles have to work with.

 

[JamesSneed]

But doesn't AMD have better net margins than Intel? Such is already strange as obviously AMD's margins from PS and Xbox chip revenue has to be tiny -- maybe low double-digits?

Either way, unused fab capacity is far worse for Intel than having low margins (at least having money to keep the lights on), so I wonder if it goes back to "the old guard" executives and upper-management who are contributing to Intel's downfall as of lately.

It might be Intel's margins would have been negative if they competed with AMD on price. Intel likely low-balled offers to try to attempt to reduce AMD's margins by reducing the contract price. Intel has a lot of work to do to get efficiencies on the fab side of the house. I think they will get there but It is likely in Intel's best interest to do big chips for third parties like hyperscalers and AI at first due to the lack of efficiencies. Maybe by 2030 we could see Intel making a mobile chip or gaming APU either designed by them or others.

Also, Intel likely needs a couple more years making dGPU's before they entice someone to pick them for APU's because they are infants in this space.

 

[Taslios]

This whole article is a months old MLiD leak...

 

[waltc3]

It isn't as widely known as it should be today, because a lot of people in the biz don't have experience that goes back decades... Since I'm remembering back so long ago, I hope my menory is intact here. Anyway, the console "wars" are nothing new and are always open to any company wanting to bid. In fact, the first xBox was made using Intel CPUs and nVidia GPUs, IIRC, but then nVidia did a no-no and decided to sue Microsoft. Microsoft paid it and then dropped nVidia for good after that. Gates was still CEO at the time and apparently nVidia pissed him off... So nVidia made a short-term profit but took a long-term loss. You can't blame Microsoft at all, as it felt--with some justification--that it could no longer trust nVidia, and that was that. But ever since, for xBox and for PS, the companies have been open for competitive bids and from what I recall, both Intel and nVidia and some others regularly bid on new console contracts and seem to always lose out to AMD--an extremely tough competitor.

 

[jkflipflop98]

I don't think this story is true at all. We learned our lesson on the original Xbox. Being in a game console is a crappy deal. You don't make any money at all.