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Although Microsoft Corp. has gained a number of strategic advantages when it managed to land orders to supply system-on-chips for both Microsoft Xbox One and Sony PlayStation 4, the company actually had to spend rather whopping money on development of those components and technologies, according to a former AMD executive.

Bob Feldstein, who was vice president of strategic business development at AMD and managed a number of important projects, revealed on his page in LinkedIn that the cost of the Xbox One accelerated processing unit project was rather vast. The APU was co-developed by AMD and Microsoft, so both companies invested their human resources, IP and had to develop new technologies. It is unknown how much both companies spent on the chip that powers Xbox One, but the whole project cost well over $3 billion.

“[My] involvement [into the Xbox One APU project] was focused on business management and supply agreement negotiations. […] AMD provided a custom silicon solution to Microsoft for the Xbox One, a game console and entertainment device. […] This required the coordination of multiple functional teams within AMD, as well as regular customer meetings with leadership teams responsible for handling the challenges of complex, muti-year deals. This project is valued at $3 billion+,” described Mr. Feldstein his work at AMD on LinkedIn.

Considering the fact that AMD spends around $300 million on R&D per quarter and approximately 1.2 billion research and development a year, it is impossible that the firm actually expended $3 billion on a single project. But keeping in mind that AMD had to develop multiple technologies to power the Xbox One, including GCN graphics architecture, Jaguar x86 architecture and others, actual spending on different things was actually very high.

Technologies that are used inside APUs that power PlayStation 4 and Xbox One will be used for desktop, mobile and ultra-portable PC devices, microprocessors, graphics cards and other products by AMD.

Tags: Microsoft, Xbox One, Xbox, AMD, Jaguar, Radeon, ATI, GCN

Discussion

Comments currently: 7
Discussion started: 05/28/13 10:57:21 PM
Latest comment: 05/29/13 07:15:21 AM
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1. 
3 Billion for pretty much "everything" wont just be for the xbone
0 1 [Posted by: vid_ghost  | Date: 05/28/13 10:57:21 PM]
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2. 
3 billion and yet it has lackluster hardware.
0 2 [Posted by: SteelCity1981  | Date: 05/29/13 03:34:35 AM]
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3. 
This story has all sorts of errors in it...

It was NOT "Microsucks" who landed orders for both the Xbox and PS4 (and also the new Wii), it was "AMD". The cost to develop the Xbox APU was NOT $3 Billion dollars, the REVENUE that AMD will generate from the Xbox/PS4 APU sales will exceed $3 Billion.

As far as performance of the APU used in the Xbox, it exceeds any APU ever seen or used before by huge amounts. There is no lack of performance from the Xbox, PS4 or Wii APUs. What the respective manufacturers do with these APUs is a completely different story.
4 0 [Posted by: beenthere  | Date: 05/29/13 04:54:00 AM]
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That was my understanding as well. Have you got your facts right Anton?

Quote Fudzilla: "AMD stands to generate more than $3 billion in revenue on its custom APU deal with Microsoft. AMD has managed to win all three console designs this time around, so it could make a pretty penny. The value of the deal was leaked by Ben Allen, an AMD chap in charge of "business transformation". Since it is a multi-year deal, AMD should generate the revenue over the next five years or so. At the moment, AMD’s revenue is just north of $1 billion".

Remember that the $3 billion revenue is not including Sony PS4 which, I dare say will do far better. But let's pretend that both consoles do equally well. Then, AMD is looking at $6 billion / 5 years x 4 quarters = $300 million per quarter.

http://www.fudzilla.com/h...orth-more-than-$3-billion
1 0 [Posted by: linuxlowdown  | Date: 05/29/13 05:01:50 AM]
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4. 
You apparently have reading comprehension problems Anton. The 3B figure is the expected revenue.
1 1 [Posted by: koziolek.matolek  | Date: 05/29/13 05:50:11 AM]
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5. 
Anton's stories are always either pr copy paste or factually incorrect. Makes one wonder if english is even his main language.
1 2 [Posted by: Sparkster83  | Date: 05/29/13 06:50:41 AM]
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And why would that matter if English was his second language? It would just demonstrate his intelligence. Do you speak a second language?
1 1 [Posted by: linuxlowdown  | Date: 05/29/13 07:15:21 AM]
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