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NVIDIA says trying to design a GPU for the console wasn't worth the cost

Advanced Micro Devices, Inc. (AMD) has quietly dominated the market for commodity graphics chips and CPUs for console gaming systems, and the latest generation of consoles look to be no exception.  Sony Corp.'s (TYO:6758PS4, to launch this holiday season, will feature an AMD GPU and CPU.  And there's an AMD 550 MHz Radeon "Latte" GPU aboard Nintendo Comp., Ltd.'s (TYO:7974popular Wii U.

So how does NVIDIA Corp. (NVDA), AMD's chief rival in the PC graphics market feel about AMD's dominance of the increasingly PC-like consoles?  Not too bad, apparently.

NVIDIA's Senior Vice President of content and tecnology told Gamespot in a recent interview that his company is essentially letting AMD win.  While he's convinced his firm could be AMD if it tried, he says it just isn't worth it, remarking:

I'm sure there was a negotiation that went on and we came to the conclusion that we didn't want to do the business at the price those guys were willing to pay. Having been through the original Xbox and PS3, we understand the economics of the development and the trade-offs.

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.

That statement seems a bit odd -- after all, hegemony of consoles could be a ticket for a financially struggling AMD to effectively sell tens, if not hundreds of millions of chips.

The Wii U packs an AMD GPU (blue: memory; red: stream processors; yellow: texture units).
[Image Source: Chipworks]

But NVIDIA's focus is more directed on the mobile market, where it's looking to leverage pared down versions of its GeForce GPUs beside ARM CPU cores.  NVIDIA has its work cut out for it in that market; it largely lost the last round to Qualcomm, Inc. (QCOM) due to its chips being too power-hungry.  

NVIDIA is focused on its mobile processor war with Qualcomm.

NVIDIA is looking to change later this year with the refresh of Tegra 4 that will include an on-die LTE modem.  Between Tegra and the development of traditional PC GPUs, NVIDIA sounds content to let AMD freely dominate the console market -- or so it says.

Source: GameSpot

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RE: Nvidia didn't have a chance...
By TheJian on 3/16/2013 7:32:57 AM , Rating: 0
l can see their point and his. AMD 1.18B loss and selling or renting their land just to stay afloat. They'll probably not do well on consoles as game devs seem to be abandoning these. They only sold 245million units total between xbox360/ps3/wii. Roughly 35mil/yr for 7 years. That won't make you rich.
Lost 5B+ over the last 10yrs and billions in debt.

On the other hand NV made ~750mil last 12 months and has made billions in the last 10yrs and has 3.8B in the bank with no debt.
Phone's/tablets are growing and currently at ~900mil/year in units. Which would you rather sell to and dev for? Even a 10% share would mean 90million units for NV and it's projected to be 1.5B units per year by 2016 (phone+tab). Economics say you're dumb to shoot for small markets. On top of that they're putting out shield which gets your PC gpu to your TV (IE, who needs a console then?). I help kill a console and hopefully sell you a gpu upgrade here and there to upgrade your TV experience. This is just plain smart business and economics sense. Even $9/90mil units would be 810mil added to the bottom line (pure profit assuming $16 cost to make, $25 to sell for T4, a tad more than T3 on both sides). You have to realize that's more than double what they made last year, and nearly double the best years they've ever had when including gpus (they've never made more than ~850mil/yr even in 2007 when the stock was $36.5 before the market crash).

Nintendo just slashed projections of hardware 17% this year, and software from 24mil units to 16 mil. That shows they see total weakness even before shield/steambox/ouya etc hit stealing more sales than phones/tablets are already doing now. What happens for the next 9 months? Nintendo and sony can't get anyone to dev for their handhelds (or wiiu in nintendo's case). Vita is a complete failure and 3DS/Wiiu sales (well all consoles) were down for xmas. So even a new console from Nin and handhelds from nin/sony have sucked sales wise. NV saw this as wasted dev money on hardware. Righly so it seems and instead spent on a market that is NOT shrinking by any measure and in a bad economy to boot.

The recent game dev survey showed only 2.6% plan to dev a game for 3DS, 6.5% for wiiu and only ~11-13 for the next xbox/ps4. The overwhelming majority however, are planning stuff for android/pc/ios. IF consoles are lucky they'll have 35mill units sold in the next year and until they debut this xmas wiiu is all that's holding things up and not doing it well. Phones/Tabs/PCs will sell 1.35Bil units in that time (350mil PC's sold yearly and likley a Billion units of phones/tabs this year). Projections for tablets just got raised by gartner to 190mil and phones are projected over 800mil. Again, who should you aim at with your hardware OR software?

Simple math says phones/tablets/pc's. NOT consoles that are stuck in stone at 1080p for the next 8 years, while Intel and TV makers will be pushing 4K all that time. Tablets already at 2560x1600 and should be able to provide a decent game experience this year if not next. Phones should be there power wise in 2-3yrs (14nm?). Consoles will not be made again by MS/Sony/Nin after this gen. Watch as dev's jump ship if sales at xmas suck. Tough to sell a $60 game to 35mil users next year when you can sell $20 to a 1.35billion users instead. You only need a 1/4 of the userbase to buy your game and it equals EVERY console user buying your game. This never happens on a console game. Most don't reach 10mil sold over the consoles lifetime.
Look at the list on the left of similar games. Only ~5 over 10mil in sales with modern warfare3 being 13mil. So realistically you'd only need a 1/6 or so of phones/tablets/pc's sales to match a console and people keep buying better hardware in all 3 of these. So if someone doesn't have the power to play your game today, they may next year when they drop their phone again...LOL.

Consoles will not sell 350mil units over 7-8yrs this time (wiiu/x720/ps4 total). The sales show the party is over. Vita 4.8mil units vs. 75mil for PSP, 3DS 29mil vs. 154mil for Nin DS,so far. This doesn't look good right?

It doesn't take a fanboy to see the writing on the wall for anything involved in consoles (handheld or consoles itself). Thank god. I want gaming to be made for ABOVE 1080p and ported down if needed. Not the other way around for 8yrs. AMD just wasted whatever they spent on R&D for consoles and history will prove this in time. I'd be shocked to see consoles sell 200mil units over the life this time. Phones/tablets/PC on TV/steambox, ouya, etc etc all fighting for the same thing and all use a gamepad and can do hdmi out to tv. Not good for consoles or AMD (no arm chip until 2014, console money won't really roll in until Q1 2014 at best). It's hard to say NV made a bad decision to ignore consoles and go heavy mobile+PC on TV. I own NV stock and will for the foreseeable future if T4/4i are what they've shown so far and many have benchmarked. I wouldn't touch AMD stock based on financials and prospects for the future. If MPR etc are correct and T4 is better than S800 (and 4i anywhere close to s800) you'll see $25+ again on NV within 2yrs (same as 2011). Last time it doubled from $12 in about 5 months. I expect the same this time or better if benchmarks from pcmag, engadget etc are to be believed (they ran them themselves at MWC, where is Qcom with S800? I'd show it off rather than brag to reporters if it beat T4 at this point). PCmag already showed T4 trashing S600. Samsung isn't letting them bench Octa yet either. Both situations will keep me dumping more into NV monthly for a while :)

RE: Nvidia didn't have a chance...
By nikon133 on 3/17/2013 10:55:31 PM , Rating: 5
Personally, I'd rather stay with 30 - 40 million consoles a year than going for questionable share of Android's mobile market while being completely out of Apple's and Windows phone/Windows Pro tablet shares. Considering that only company that moves real volumes in Android market, Samsung, prefers to stick with their own hardware, and Nvidia is fighting Qualcomm, TI, - even Intel is pushing their X86 on Android - it doesn't really look like Nvidia has it set in stone on mobile market either.

Even on PC market, considering that majority of units are shipped with integrated Intel GPUs, and big chunk of dedicated solutions are based on entry level (and dirt cheap) Nvidia and AMD solutions... that console market might be healthiest source of income than anything else either Nvidia or AMD have right now.

Yes mobile market is and will grow even further compared to console market, but like I said - there are no guarantees that Nvidia will be overly successful there, nor that fierce competition with other players will let them make as much money there as they could, otherwise.

At the end of the day, Nvidia only does what seems to be common practice nowadays - trying to underestimate competitor's success by downplaying its importance. Not unlike what Apple and HTC are trying to do about Samsung Galaxy S4.

Damage control, nothing else.

RE: Nvidia didn't have a chance...
By FlyTexas on 3/18/2013 2:39:15 AM , Rating: 2
nVidia's biggest problem is the lack of a x86 CPU to pair with their GPUs.

So they are going in another direction trying to get away from Intel as much as they can.

Is there a future in add-on desktop graphics cards? Probably not, give a few more years and the built in GPUs on Intel CPUs will become "good enough" for most people.

Hard cord people will want add-on cards, but their numbers will shrink as Intel's GPUs improve.

Quite frankly, I'm shocked that Intel hasn't purchased nVidia, it made perfect sense after AMD bought ATI.

By FITCamaro on 3/18/2013 8:41:21 AM , Rating: 2
Intel and AMDs integrated GPUs have been "good enough" for average people for years.

The discrete market has always been for hard core gamers and Intel is no where close to being "good enough" for them. Sure Ivy Bridge can play older games at decent resolutions and newer games at 720p with low/mid details. But that isn't going to take away sales from those who would have bought a dedicated GPU to start with.

RE: Nvidia didn't have a chance...
By Bateluer on 3/19/2013 11:32:46 PM , Rating: 2
If you're wanting to play games at anything higher than minimum details settings, you're going to get a PCIe card. Even the HD4600 in the Haswell i7 4770K doesn't deliver playable frame rates in yesterday's games. Not exactly future proof there.

"If you can find a PS3 anywhere in North America that's been on shelves for more than five minutes, I'll give you 1,200 bucks for it." -- SCEA President Jack Tretton

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