From Nasdaq: 2024-09-18 08:23:00

Advanced Micro Devices (NASDAQ: AMD) secured a contract for the upcoming PlayStation 6, beating out Intel (NASDAQ: INTC) for the deal. This milestone is a win for AMD and a loss for Intel, with Sony choosing AMD’s custom chips for their next-generation console. Sony’s commitment to AMD’s solutions has translated into billions of dollars in revenue for AMD.

The evolution of PlayStation processors has seen Sony transition from the MIPS architecture to IBM PowerPC, and now to a custom version of the x86 architecture offered by AMD. By choosing AMD, Sony ensures compatibility with a vast library of PS5 and PS4 games, a consumer-friendly strategy. AMD collects around $250 per PS5 console sold, showcasing the financial impact of these contracts.

Sony’s decision to stick with AMD for the PlayStation 6 is a blow to Intel, who was bidding for the contract. Intel’s higher unit price request did not sway Sony, as they opted to continue their partnership with AMD and Taiwan Semiconductor Manufacturing for manufacturing services. Intel misses out on a significant opportunity to showcase their graphics systems with the PlayStation contract.

Investors should consider the long-term benefits of AMD’s relationship with Sony, making up 20% of their total sales. This partnership signifies a vote of confidence in AMD’s solutions by a major player in the gaming industry. On the flip side, Intel’s loss in the PlayStation contract leaves them with room for improvement in their graphics processing unit market share.



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