Microsoft Xbox One APU Cost Over $3 Billion to Develop

Former AMD Executive Reveals Cost of Xbox One SoC Project for Developers

by Anton Shilov
05/27/2013 | 11:17 PM

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.