More gamers are playing on Radeon graphics than Intel and Nvidia combined

[Jovidah]

5 minutes ago, Misanthrope said:

No this isn't accurate: they have to keep manufacturing the chips or dealing with the fabs so they keep making them. Without that huge investment they'd have more money for R&D and wouldn't lag behind in tech so much.

 

But even more imporantly: they got screwed on the initial deal. Probably they wanted to outbid Nvidia so bad they settled for an extremely low profit margin, if they were making decent money on all those console sales they'd be rolling in cash.

 

Say what you will about Nvidia but they don't need to cheapen their brand and mass produce products almost at costs to compete: they can get away with consistently raising the price of the high end cards and at the end of the day, the fact that they have the upper hand in tech and a consistent lead on the high end market has make them a lot more money than AMD selling millions upon millions of console crap chips they barely break even on.

 

Sure it keeps them afloat but not for much longer: at this rate if they don't start to make a lot more money they simply won't be able to offer a console chip that makes sense and Nvidia will be able to just offer something much better to the point that Sony, MS and Nintendo would go "yeah this might costs us more but it just makes more sense"

 

Like Nintendo just did with the switch: AMD has no answer for that when is the last time you've seen a competitive AMD tablet or phone?

Oh I agree that nVidia is certainly in a better position than AMD. But what I'm saying is that AMD is better off with the console deals than without. The revenue it brings helps to pay for the general overhead, operating costs, etc. It also helps to keep their supply contracts filled; without the volume the console production brings it's likely they'd pay more for the production of their other products, or even end up paying fines due to lower-than-expected turnover.

 

Also remember that AMD was simply better positioned to create these integrated solutions on the cheap, as they were the only one that had decent problems in both the graphics and CPU markets. nVidia might make better graphics cards and Intel might make better CPUs, but in the case of these consoles all that was required was the cheapest solution, which happened to be the integrated SOC. This pretty much gave AMD a position where they could always undercut nVidia, as they'd have to make a far larger R&D investment in the CPU area.

 

For that reason it also makes sense for nVidia to pass this up, as they could never expect to get the margins AMD was getting on these products. 

Again, I'm not saying I'd want to be in AMD's position... but they're certainly in a better position with the console sales than they would be without it. Even if it's just for the revenue reports that help secure continued inflow of investment.

[Misanthrope]

12 minutes ago, Jovidah said:

Oh I agree that nVidia is certainly in a better position than AMD. But what I'm saying is that AMD is better off with the console deals than without. The revenue it brings helps to pay for the general overhead, operating costs, etc. It also helps to keep their supply contracts filled; without the volume the console production brings it's likely they'd pay more for the production of their other products, or even end up paying fines due to lower-than-expected turnover.

 

Also remember that AMD was simply better positioned to create these integrated solutions on the cheap, as they were the only one that had decent problems in both the graphics and CPU markets. nVidia might make better graphics cards and Intel might make better CPUs, but in the case of these consoles all that was required was the cheapest solution, which happened to be the integrated SOC. This pretty much gave AMD a position where they could always undercut nVidia, as they'd have to make a far larger R&D investment in the CPU area.

 

For that reason it also makes sense for nVidia to pass this up, as they could never expect to get the margins AMD was getting on these products. 

Again, I'm not saying I'd want to be in AMD's position... but they're certainly in a better position with the console sales than they would be without it. Even if it's just for the revenue reports that help secure continued inflow of investment.

I honestly don't think they are.

 

Let me give you an example: Let's say I get a bunch of venture capitalists to give me tons of cash which I invest to try and break into the car industry.

 

After getting some factory space (Cause my company, call it CARmd) doesn't has enough for my own production but can still rent some gets some to start.

 

My initial business model is that I can produce cars that sell for USD 5000 and my production costs are 2000 USD so that gives me enough margins to cover my R&D, distribution and marketing.

 

In comes a massive government contract that offers to purchase a cheaper model from me. They can pay me 3000 bucks per car. The simpler model is slightly cheaper to produce at 1500 per unit but that's still basically half my profit margin at 1500. Since I am guaranteed a customer with this contract I can drop a lot of the distribution and marketing costs and even some of the R&D since I won't need to create new products.

 

Except this government contract is a mandatory 6 years contract and demands a certain ammount of units to be produced per month (call it 200) The plant that's building this car for me can produce only 250 units per month tops and that's stretching it. So now if my company does really well, I can at best sell only 50 of the really profitable cars.

 

Remember that I signed a contract so I can't get out of the government contract, meanwhile competition is dumping a lot more money than me on R&D and Marketing so as time goes on I am getting less money and my competition is getting better technology and more brand recognition.

 

Also my competition can keep making better calls to sell at 6000 or 7000 and leave them more and more profit margins and I am stuck for 6 years at selling for only 3000 regardless of the economical environment and changes.

 

Once my contract end my competition will be much better off than me because I simply signed a very bad deal for me even if it kept my company alive it also kept it with a stunt growth for far too much time for a competitive market.

 

This is why CARmd shouldn't have tried to outbid the competition so much that it basically put the breaks on the entire company. Not having the government contract would have been a bigger risk, but also the rewards would have been far better and would have helped my company in the long run a lot more.

 

[dfsdfgfkjsefoiqzemnd]

So ... all those people who are saying that we all should buy AMD cards to keep the competition going ... does this mean they now have to switch to Nvidia? 

[Misanthrope]

4 minutes ago, Captain Chaos said:

So ... all those people who are saying that we all should buy AMD cards to keep the competition going ... does this mean they now have to switch to Nvidia? 

It would certianly show that my theory is accurate: selling more units is meaningless if your profit margins are shit.

[Jovidah]

12 minutes ago, Misanthrope said:

snip

Remember there are a few things 'different' for AMD in your case.

 

-They might not do their own production, but they do have contracts with their supplier. These kind of contracts usually get cheaper when you buy more, and have provisions for fines if you don't buy enough. So even if you only break even it can still make sense to produce a product there when demand for your other products sucks (as was the case for AMD). The problem is not that it's 'taking up space in production'. AMD's problem was not having enough orders to fill their production quotas.

 

-The fact that these contracts are long-running is only beneficial, as most of the cost involved in creating a chip is in the R&D and design phase. Once it actually works, the more units you sell the more profit you make.

 

-At the same time, AMD really didn't have much 'high-end-high-profit' market to cut into to begin with. Sales on their CPUs have been tanking for years. Console production never took away production from other profitable products.

 

-AMD probably had fairly low R&D costs for these products. For nVidia to deliver a competing product they'd likely have to invest far more in R&D (as they had less useful CPU tech on the shelf). It can make total sense for both AMD to do this deal and nVidia not to do it. 

 

As I said, it's not 'great',  but in the last few years AMD was in no position to aim for great. They were happy enough just to stay afloat. They might not have gotten very rich off these things, but it did help in preventing bigger problems or going bankrupt.

Again, they're not even making a loss on these things. It wasn't taking away anything from their other products. For them this was a low-investment, low-risk option that simply guaranteed some steady income, even if the profits weren't spectacular.

[Jovidah]

2 minutes ago, Misanthrope said:

It would certianly show that my theory is accurate: selling more units is meaningless if your profit margins are shit.

I agree on that. The original article is a complete load of bollocks. 

What I'm saying is that in certain positions it can still make sense to do a less than stellar deal. This is a problem facing a lot of companies, and also facing farmers for example. Sometimes you end up producing without making any profit off it. It sucks, but simply ceasing production often isn't an option as it entails laying off all your employees, having no income, and thereby making it even harder to break out of this vicious circle.

It's a shit position to be in, but simply staying on the sidelines isn't an option. As I said; it's not an enviable position to be in, but you're really stuck choosing between bad options there. Getting into the console business was 'the one that sucked the least', and in all honesty the revenue reports support that. 

It might not help their position in remaining competitive, but neither does going bankrupt.

[Misanthrope]

1 minute ago, Jovidah said:

Remember there are a few things 'different' for AMD in your case.

 

-They might not do their own production, but they do have contracts with their supplier. These kind of contracts usually get cheaper when you buy more, and have provisions for fines if you don't buy enough. So even if you only break even it can still make sense to produce a product there when demand for your other products sucks (as was the case for AMD). The problem is not that it's 'taking up space in production'. AMD's problem was not having enough orders to fill their production quotas.

I did account for this on my example: I lowered the production costs because of it. More over expanding the production capabilities beyond the factories involves more initial investment which under a contract limits you quite a great deal since those are still alocated resources

 

Quote

-The fact that these contracts are long-running is only beneficial, as most of the cost involved in creating a chip is in the R&D and design phase. Once it actually works, the more units you sell the more profit you make.

I account for this as well: I said that the R&D costs are lower however I also show you why this is still not ideal: You might not need to invest as much in R&D but you also don't stay competitive because of your lower available capital and alocated resources to the big contract.

 

Quote

-At the same time, AMD really didn't have much 'high-end-high-profit' market to cut into to begin with. Sales on their CPUs have been tanking for years. Console production never took away production from other profitable products.

 

Yes and no: Yes their CPU division was struggling quite a bit but istead of boosting their company with the ATI purchase they threw AIT into the crap console chip cycle and stiffled the innovation driven model ATI had

 

More over anything that you invest has an impact on the company: A dollar spend somewhere on the company is a dollar not spend somewhere else.

 

Quote

As I said, it's not 'great',  but in the last few years AMD was in no position to aim for great. They were happy enough just to stay afloat. They might not have gotten very rich off these things, but it did help in preventing bigger problems or going bankrupt.

Again, they're not even making a loss on these things. It wasn't taking away anything from their other products. For them this was a low-investment, low-risk option that simply guaranteed some steady income, even if the profits weren't spectacular

I disagree: they bought ATI and basically wasted their previous efforts: back before that purchase ATI was a legit competitor to Nvidia and even had the upper hand a bunch of times, both in tech as well as sales and overall profit. AMD simply didn't have enough money to purchase ATI and also didn't have a decent plan to take advantage of the purchase once they did.

 

That's two mistakes that could have easily been prevented instead AMD diluted their position on both the CPU market and their newly adquired GPU market. They were bafflingly ambitious and then defeatist showing very little vision and direction. Overall just one bad decision after another. So much so that I don't think they can even recover at this point: I predict both Vega and Zen will get apathetic reception and won't bring in nearly enough cash to get back on track.

[Prysin]

1 hour ago, Misanthrope said:

True, yet the article quoted by OP uses steam as well but attempts some statistics chicanery instead of being honest about it: PC gaming belongs 1st to intel but second to Nvidia, and even more important is that the relevant, sales driven ( Mobas I consider microtransaction driven or post-sale not really profit driven) games as shown on the steam survey, belongs to Nvidia.

 

Counting AMD because of the console market is extremely disengenious first because the console market is extremely different overall: AMD doesn't has to sell products in retail directly, game devs don't need to account for as many configurations, development and entry level is usually much more expensive (i.e. most games do want at least some physical retail prescence with it sometimes dominating sales numbers instead of digital distribution) and perhaps the most important is that, if the current financial numbers are anything to go by, these console hardware deals are terrible for AMD as a company as they're basically undercutting Nvidia so much they barely get any fucking returns, specially as time goes by.

Semi Custom is one of the most profitable branches they have. They ARE making money on those chips, quite a bit given the revenue. Graphics and Semi Custom is what has been the biggest provider of cash influx for quite some time now.

 

Source(s):

(2015, 2014, 2013, 2016Q3)

http://ir.amd.com/phoenix.zhtml?c=74093&p=irol-newsArticle&ID=2130467
http://ir.amd.com/phoenix.zhtml?c=74093&p=irol-newsArticle&ID=2008997

http://ir.amd.com/phoenix.zhtml?c=74093&p=irol-newsArticle&ID=1892414&highlight=
http://www.anandtech.com/show/10780/amd-announces-q3-2016-results

[Misanthrope]

1 minute ago, Prysin said:

Semi Custom is one of the most profitable branches they have. They ARE making money on those chips, quite a bit given the revenue. Graphics and Semi Custom is what has been the biggest provider of cash influx for quite some time now.

 

Source(s):

(2015, 2014, 2013, 2016Q3)

http://ir.amd.com/phoenix.zhtml?c=74093&p=irol-newsArticle&ID=2130467
http://ir.amd.com/phoenix.zhtml?c=74093&p=irol-newsArticle&ID=2008997

http://ir.amd.com/phoenix.zhtml?c=74093&p=irol-newsArticle&ID=1892414&highlight=
http://www.anandtech.com/show/10780/amd-announces-q3-2016-results

Doesn't refute anything I've been saying here: what they're making vs what they're spending vs what they could and should be making are all different things.

[Prysin]

15 minutes ago, Misanthrope said:

I did account for this on my example: I lowered the production costs because of it. More over expanding the production capabilities beyond the factories involves more initial investment which under a contract limits you quite a great deal since those are still alocated resources

 

I account for this as well: I said that the R&D costs are lower however I also show you why this is still not ideal: You might not need to invest as much in R&D but you also don't stay competitive because of your lower available capital and alocated resources to the big contract.

 

 

Yes and no: Yes their CPU division was struggling quite a bit but istead of boosting their company with the ATI purchase they threw AIT into the crap console chip cycle and stiffled the innovation driven model ATI had

 

More over anything that you invest has an impact on the company: A dollar spend somewhere on the company is a dollar not spend somewhere else.

 

I disagree: they bought ATI and basically wasted their previous efforts: back before that purchase ATI was a legit competitor to Nvidia and even had the upper hand a bunch of times, both in tech as well as sales and overall profit. AMD simply didn't have enough money to purchase ATI and also didn't have a decent plan to take advantage of the purchase once they did.

 

That's two mistakes that could have easily been prevented instead AMD diluted their position on both the CPU market and their newly adquired GPU market. They were bafflingly ambitious and then defeatist showing very little vision and direction. Overall just one bad decision after another. So much so that I don't think they can even recover at this point: I predict both Vega and Zen will get apathetic reception and won't bring in nearly enough cash to get back on track.

ATI was bought in 2008. AMD entered consoles in 2012/2013. Thinking that they used the previous 2-3 years developing the semi-custom hardware for the consoles. That leaves 3-4 years at least from aquisition until "they threw ATI to consoles"....

Actually, you are also WRONG.

They bought ATI in order to make APUs a reality. To make a SoC for PCs. the "perfect" solution. The ability for ONE manufacturer to have a competitive edge in two major hardware fields.

 

Guess what AMD is making the bulk of its money from these days? Guess?

Oh yes, fucking APUs, Graphics and Semi Custom.....

 

guess where they are losing shitloads of money?

CPU, debt, RnD and their shitty GLOFO contract.

[Prysin]

2 minutes ago, Misanthrope said:

Doesn't refute anything I've been saying here: what they're making vs what they're spending vs what they could and should be making are all different things.

at what point can you prove what tehy "COULD AND SHOULD" be spending?

none.

none at all.

 

you have no idea what the cost of producing these chips are. Nor what AMDs official margins are, nor what they could charge if they werent desperate for money.

 

you

 

have

 

no

 

fucking

 

clue

 

nor

 

does

 

anyone

 

else

 

on

 

this

 

forum.

 

 

[Misanthrope]

7 minutes ago, Prysin said:

-Annoying as all fuck formatting-Seriously make your motherfucking point without fucking up the thread formatting.

Actually there's more than enough circumstances we can look at to make a fair assumption: the price of the consoles vs the tech available at the time, their financial statements, the prices Sony and MS have maintained through the cycle, etc.

 

We know that they sell console at a lost but not at that much of a loss.

 

Anyway I don't think I'll be replying to you again on this issue since your contention is a bit ridiculous giving the context of an article making just as many guesses and assumptions: you wanting to suddenly bring up factual data only is just disengenious and argumentative for it's on sake.

 

[Prysin]

1 minute ago, Misanthrope said:

Actually there's more than enough circumstances we can look at to make a fair assumption: the price of the consoles vs the tech available at the time, their financial statements, the prices Sony and MS have maintained through the cycle, etc.

 

We know that they sell console at a lost but not at that much of a loss.

 

Anyway I don't think I'll be replying to you again on this issue since your contention is a bit ridiculous giving the context of an article making just as many guesses and baseless assumptions: you wanting to suddenly bring up factual data only is just disengenious and argumentative for it's on sake.

 

oh, so factual data is suddenly no longer a valid form of discussion? now you want to only discuss in vague, and impossible to prove or disprove arguments that you yourself, nor anyone else can dispute for the sake of winning internet poing?

What are you? Patricks cousin?

 

discussions should adhere to facts. That is all that matters. Feelings, biased thesis or whatnot is not going to provide any healthy argument. You bring facts before claiming you are right.

 

Making bold, yet vague statements that "they could and should" has no place in a discussion where facts are missing. If you had facts on their margins, fine. I'd accept such a argument. But the one arguing for the sake of arguing, that is your doing. You are the one not willing to accept that AMD might actually be doing better then we'd think.

 

 

[Misanthrope]

Just now, Prysin said:

oh, so factual data is suddenly no longer a valid form of discussion?

Not on speculative topics, no. Despite your outrage a lot of what we do here is speculate about rumors. If you don't like it that's fine, but don't be surprised if some of us do.

[Prysin]

1 minute ago, Misanthrope said:

Not on speculative topics, no. Despite your outrage a lot of what we do here is speculate about rumors. If you don't like it that's fine, but don't be surprised if some of us do.

i totally accept that the data in the OP is not trustworthy. I have made this clear in almost every post.

But trying to steer the topic with vaguer and vaguer arguments does not benefit anyone, especially when all your data is even vaguer then the confirmed data we have in the first place.

[Misanthrope]

3 minutes ago, Prysin said:

i totally accept that the data in the OP is not trustworthy. I have made this clear in almost every post.

But trying to steer the topic with vaguer and vaguer arguments does not benefit anyone, especially when all your data is even vaguer then the confirmed data we have in the first place.

Is not that vague I'd argue that my reasoning is not completely baseless: we know AMD is not profitable, we know they stretched themselves too thin by prematurely buying ATI, we know the price and cost to produce the modern consoles, we know they basically haven't had an answer to Nvidia's high end cards for over a year, etc.

 

But if you still think this is "too vague" even for a vague OP that's fine we can just drop the subject.

 

[Mooshi]

Was holding off on checking this thread due to the Polygon level clickbait, but it seems everything has been covered lol. If this was a push for Radeon graphics, it fails when we toss in the consoles and Intel's lackluster on-board graphics. 

[suicidalfranco]

2 hours ago, Misanthrope said:

The PS3 also had plenty of yellow light of death. Nowhere near as prevalent as the 360 but it was still fairly high failure rate numbers, particularly for consoles with such a long cycle: barely any original PS3 models survived the 6 years mark.

*looks at still working og 60gb ps3*

 

[Misanthrope]

7 minutes ago, suicidalfranco said:

*looks at still working og 60gb ps3*

 

*Links up wiki article to anectdotal evidence*

[Totallycasual]

Struggling to see the point of making this thread. 

[sazrocks]

So because console gamers are forced to use amd cards, more people have amd cards. That means nothing.

[BuckGup]

7 hours ago, Notional said:

Why I wrote almost. Sure you can use it for other things, but how many people buy a console and don't play games on it? I would think that number would be insignificant.

I know 4 people who just use it to watch movies and play music

[JoseGuya]

On 16/11/2016 at 7:56 PM, Notional said:

Consoles are used (almost exclusively) for gaming. The only game apple users play is "why is my bank accounts empty?".

Well, I play the occasional 5 hours match in CIV V, VI on my late 2013 RMP when in bed, when im to lazy to get to my desktop pc. 

[Lawliet93]

I see people talking about AMDs finances and the how much money they are losing on consoles, well... since they´ve started selling APUs for consoles... the SOC division has been profitable (using the cheap and small x86 Jaguar core is in my opinion the main reason why they can make money on those 100 dollars + chips). RTG was also profitable since it was founded (even before, the Graphics part of AMD has been profitable). Even in the last quarter, both of them have been profitable, they were dragged  down by the CPU-division and the fact, that AMD had to pay 400 million dollars to Global Foundries for changing some terms of a shipment deal they made in the past... so AMD would have been profitable (and I really hate the fact, that Linus did not mention this fact properly!!!!). The limiting factor for AMD is the CPU-division, which is loosing money since 2011 (they basically developed a server-style CPU-core and didn´t sell it in the server market), but this will change with zen (it will... trust me, the core-design is looking great, IPC should be somewhere between IB and haswell... like 10% away from skylake... and don´t come with but broadwell... it is just a die-shrink.. nothing more). The reason, why Nvidia is making so much money this quarter is simply because... they didn´t spend as much money on R&D for paxwell (Pascal is just a die-shrink of maxwell... there is literally zero difference betwen those architectures...ok, I admit, they added better memory compression techniques).

 

P.S.: I had a guy telling me, that nvidia is better than AMD... so I asked him, why? He didn´t give any evidence on, why the green team was better, so I told him, that, since I believe 2009 both companies have released  products, that were completely comparable in terms of performance in their respectable price-points... he would not believe me and marked me a fanboy... well, this goes to show, how much manpower nvidia has.  

[Swndlr]

On 11/16/2016 at 5:56 PM, Notional said:

Consoles are used (almost exclusively) for gaming. The only game apple users play is "why is my bank accounts empty?".

I can never beat that fucking game smh