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AMD To Benefit Greatly From Next-Gen Consoles

Could net $60 - $100 per SoC for each next gen console

AMD have been in need of a break for some time now and while they're unlikely to catch up with the financial clout of Intel any time soon, this next-gen console race is a win / win situation for the budget friendly CPU and GPU manufacturer, given that they are now the muscle that powers the Wii U, Xbox One and the PlayStation 4.

It is said that AMD could be making anywhere from $60 to $100 for every next-generation games console sold from both Microsoft and Sony, heck it doesn't even matter which one wins the console race because both consoles are using the same CPU! Meaning AMD must be laughing their asses off all the way to the bank thanks to the money saved by producing similar SKUs for both companies.

Mark Lipacis, an analyst with Jefferies & Co., believes that the average price for the SoC in each console is around $60-80, however Hans Mosesmann with Raymond James feels it is closer to $60-$90 per chip.

“Our analysis assumes that this generation of consoles ramps up at 60-90% of the previous model, with average selling prices (ASPs) varying from $60-100,” said Mr. Mosesmann.

This might sound like a lot, but in long run this is an absolute bargain in terms of performance. The Xbox 360 CPU cost Microsoft $105 and the GPU another $140 when it launched, while the PlayStation 3 set Sony back $89 per Cell Processor and $129 for the GPU, both over $200 combined. The new APU in both consoles however features 8 x86 cores and graphics that are significantly advanced compared to their current gen counterparts.

So what does this mean? Games consoles are often sold at a loss for the first couple of years, with software picking up the profit margins, but could Microsoft and Sony actually make a buck on the hardware this time? Given the current global economy, the can't afford not to.