Praying For Consoles: AMD Details 2013 Game Plan, Offers Updates on New APU Performance

Praying For Consoles: AMD Details 2013 Game Plan, Offers Updates on New APU Performance

AMD announced its earnings today, with figures that generally reflected to poor state of the entire PC industry. Normally, this is where I'd delve into those figures and run the numbers. Not this time. AMD's conference call and Q&A session were interesting enough that the company's Q1 performance can be dealt with relatively quickly.

  • The PC market was awful.
  • AMD lost money.
  • The company has enough cash on hand (thanks to selling its HQ in a lease-back arrangement) to make it through the second quarter.
Computing solutions revenue really did take a hammering this quarter, falling to $751M (down nearly 40% year-on-year. The company didn't dwell on that fact, but  it's not a sustainable rate of loss.

The Fun Stuff

Let's talk products. According to AMD, Kabini (the 28nm follow-up to Brazos) entered volume production this past quarter. Estimated performance is "2x in CPU, 4x in graphics." The competition, in this case, is almost certainly Intel's 32nm Clover Trail. Given that Brazos is typically 20-25% faster than Atom, the 2x performance figure is reasonable once you calculate the higher number of cores and IPC improvements.


28nm wafers at TSMC

According to AMD, Kabini will target Intel's Pentium, Celeron, and even the low-end Core i3 business, while Temash will principally target Atom. Again, though, the company execs were speaking to 32nm Clover Trail. Intel's own 22nm Atom should ship by the end of the year, with its own quad-core configuration and far higher performance. Still, it looks like AMD is going to get a 4-6 month window of opportunity.

Next up, there's APUs. Read claimed that AMD took back market share in desktop products and won some small amount of share in desktop graphics as well. The net impact of the "Never Settled" bundle was positive on revenue; AMD reported $337M in GPU sales, up from $326M in Q4 2012. It also believes it took some share in workstation graphics, and those cards typically carry higher margins. That proposed gain makes the downward pressure on GPU operating income more troubling. AMD reported $16M in operating income, down from $22M in Q4 2012. When you factor in that the company made $11M more in GPU sales over the same period and claimed a slight average selling price (ASP) increase, it implies that "Never Settled" is costing the company some extra scratch.



"Never Settled," according to AMD executives, is a vital part of the company's long-term plan for gaming and graphics. AMD's executives have stated that they expect developers to leverage the synergy between the Wii U, Xbox Durango, and PS4's graphics hardware to create games that run better on AMD products over on the PC side of the business.

Finally, there's the consoles.

Betting Everything

Rory Read really likes the console/embedded business. It's clear that he views this as the future of AMD. The company projects that up to 20% of its revenue will come from embedded/console sales in 2013, with as much as 50% of all revenue coming from these sources by the end of 2014. AMD, in other words, is becoming an embedded processor designer with an x86 business, rather than the other way around.

What Rory Read didn't want to hear was concern from investors that the next generation of consoles might not pan out. When one analyst questioned whether or not historical trends were a good predictor of console uptake, Read told the man to go consult historical trends.

That was rather stupid. The entire PC industry just suffered a historic collapse in sales. The current generation of consoles is seeing a similar plummet. Xbox 360, PS3, and 3DS sales all fell 19-22% in March. Wii sales fell 51%, while the Wii U moved just 55,000 units. The Vita managed 42,500 units (a drop of 80%). Total sales for all consoles were down 22% compared to this time last year. The most recent entries in the Gears of War and God of War series (Gears of War: Judgement and God of War: Ascension) are estimated to have sold 425,000 and 360,000 copies since they launched in late March. That's staggeringly terrible. Gears of War 3 sold over 3 million copies in its first month when it debuted in 2011. God of War 3 sold nearly a million copies within days.

There's a really, really big problem with the way these figures could impact AMD's bottom line, and Read refused to answer whether the company's agreements with Sony, Microsoft, and Nintendo were structured in a way that would insulate it from abysmal console sales.

AMD's upcoming products sound strong. There's definitely some excitement around future console developments. We expect launch sales will be brisk, on both platforms. Nevertheless, AMD's entire strategy is based on the idea that people are going to buy two sorts of things in the next year:  Consoles and Windows tablets.

If that happens, AMD could come out of this on the best footing its enjoyed in years. If it doesn't, there won't be an AMD anymore.

There was no mention of Kaveri, by the way. Those of you curious about what AMD has planned for the mainstream desktop market will have to keep on waiting.
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Consoles and tablets, all or nothing huh? That does sound like one hell of a roll of the dice. A scary one.

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Quick, lick everything. Nvidia is more focused and that is why they are currently on top/

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Well i hope there is still an AMD in the next few years. All Intel for pc processors would not be a good thing. I hope thing's do pan out for AMD.

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They'll make bank off of their console part sales regardless..Sony and Microsoft are going to have to buy a lot of em to begin with..

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And in my opinion? Those are THE only two consoles to buy..Nintendo's Wii U is a joke...for many it will be a one or the other decision..and for many others? both! (Sorry AMD..I have no plans on purchasing a new console anytime soon at all..maybe a new GPU soon though. :) )

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I am in the same boat as nearly everyone else, I will NOT be purchasing either of the next gen consoles (the wii u is not a next gen console) and unless things drastically change that could mean that I might be out of the console buying game forever.

Even more sad news is that even as a former AMD fan I wouldn't consider purchasing anything AMD embedded or APU related, example: I really still want a Surface Pro and if I want one I need to buy generation 1 because if the Surface Pro 2 comes with an AMD APU as rumored its a product I wouldn't be interested in and I'm hoping it will ship with an Intel Haswell CPU.

As for graphics I have always been an nvidia fanboy with th only non-nvidia gpu I've ever purchased being an ATI radeon All-In-Wonder card for an htpc in 2006 before AMD owned them.

Good luck AMD we really need you to stick around but non of your products appeal to me anymore.

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used to be a amd fan but they have really let me down in the past few years i'm about to jump ship to intel on my next system upgrade

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Those of you saying AMD will make bank off consoles don't seem to grasp just how bad AMD's per-console earnings are going to be.

We know AMD provided both the CPU and GPU for the PS4. Persistent scuttlebutt suggests it did the same for the Xbox Durango. We know it provided the GPU for the Wii U.

If AMD is making $8 per console sale on the Xbox / PS4 and $4 per Wii U, that'd be *great.* Think about that for a moment. 20 million console sales by the end of the year would be an extraordinarily good launch, but that only comes out to $120-$140 million in profit for 3-5 months. AMD's failing APU did business did $750 million in one *quarter.*

That's why analysts are asking Read to break down what he means when he talks about "console/embedded" products accounting for such much of AMD's revenue. Console royalties aren't very high. The Wii U, Xbox 720, and PS4 may put a little icing on the cake, but they aren't going to sustain the company.

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interesting stride into the future. Hope this helps the pc market turn around a bit.

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FJak,

Historically, yes, they do. Current console generations are at rock-bottom prices. There are huge libraries. Consider the following:

1) The Wii U is selling abysmally. Better games will help -- when they eventually appear.

2) The Vita has sold abysmally. That's a next-gen handheld with the promise of PS4 integration.

3) The 3DS is finally selling "ok." Not much more than that, and only after a price cut.

4) Hugely successful game franchises aren't selling for beans. Just because you wouldn't invest in an Xbox 360 or PS3 *now* doesn't mean you'd stop buying games for it. Historically, game sales on entrenched consoles continue to be major revenue drivers even after a new console launches.

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I really do hope that eh next-gen consoles are good.  I really want them to be powerful.  Not because I want to play good looking console games, but because I want the PC to pull ahead further by having to somewhat compete with them.  Hopefully with the new x86 support for the next gen consoles we will have more and more game devs start developing for PC and porting to console, and less and less devs designing for console and porting to PC.

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Kidbest100:

I really do hope that eh next-gen consoles are good.  I really want them to be powerful.  Not because I want to play good looking console games, but because I want the PC to pull ahead further by having to somewhat compete with them.  Hopefully with the new x86 support for the next gen consoles we will have more and more game devs start developing for PC and porting to console, and less and less devs designing for console and porting to PC.

While we all want this the new norm is going to be console game ported to PC unless it is strictly a PC game. Now what this will do I think with the upgraded tech in the next gen consoles is the ports to PC should be alot better. 

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Yes, but game developers are currently designing the games to be crappy looking, and to be optimized for the old, outdated hardware that the consoles have.  

 

Now that the new consoles are going to be on an updated architecture, and have newer hardware, and most importantly, MORE MEMORY!!! :D, they can finally start developing the games from actual workstations and then cutting back, instead of developing and cutting down using side-roads and software/firmware that cuts the game engines back and makes it compatible with the old console architecture.

 

The whole new memory thing is going to be the most important jump.  Game loading times should be much faster, and the overall experience should be a little bit smoother.

 

Despite all this improvements and major leaps and bounds, I still can confidently say:

PC FTW Cool

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I wish it was that way. To elaborate more I think it is the publishers that will push console ports to PC. Valve might be the other way around but Activison and EA will make thing for console then port them to PC so we can still play them. I could be a 50/50 on what happens I just don't see if where publishers let devs build for PC and scale down to console. 

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I belive Apu's can save AMD

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