I am thinking that the Switch 2 and its custom NVIDIA SoC will be one of the first announcements of this new division, if NVIDIA makes it official. As the article said, it would be though for NV to get into the PS6 or Xbox Next console. Sony has a horrible history of backwards-compatibility, essentially entirely relying on hardware-compatibility to achieve it. PS2 had the entire PSone CPU/GPU/RAM on board, and PS3 in turn had the PS2 CPU/GPU/RAM on it, and then actually did use software-emulation for PSone. PS4 had zero compatibility at all. PS5 runs PS4 purely because it is the same x86-64 architecture CPU and and AMD GPU.
Microsoft would have an easier time since their consoles have been using the DirectX API going back to Xbox original, but even still it would require a ton of effort. They wrote full software emulation for Xbox OG and Xbox 360 to run on Xbox One/Xbox Series, and they would have to almost redo that entirely to get it to run on an ARM/NVIDIA system. Not to mention also creating software emulation for Xbox One/Xbox Series to run on it.
Well, Microsoft already has an x86/x64 emulation layer in Windows on ARM. Maybe getting that to work on a console would be a lot of work, I'm not sure, but I expect that they wouldn't have to start from scratch.
I do hope nVidia will get back into suppling chips for Surface devices though. That could technically fall under the custom chips category.
That's true, I suppose it wouldn't be starting from scratch but probably still a lot of work. Since the PS4/Xbox One, it seems the APU is just the way things are now for consoles. But there is always a small chance MS could ask AMD for a crazy small 16 x Zen 5c processor or something, along with a beefy discrete NVIDIA GPU, in order to keep the base CPU architecture as x86-64 still. I just think it's unlikely at this point.
NV is worth more than China's entire stock market due in no small part to its AI and HPC units. At this point AMD probably only exists because NV buying it would run afoul of antitrust laws and the US SEC or whatever government organization it is that regulates mergers likely blocking a consolidation.
sony already made the deal, nvidia will not be in ps6 or next portable
xbox who knows, very shaky department right now
"NVIDIA is of course interested in expanding its footprint in consoles – right now they are supplying the biggest selling console supplier, and are calling on Microsoft and Sony every week to try and get back in,"
weird sentence that needs more or changed words (at least remove 'supplier')
it also seems weird for nvidia to be trying to get back into high performance console manufacturing. the margins are low for chip suppliers and nothing or negative at launch for console manufacturers. they could be spending those wafers on more AI chips.
meanwhile the switch uses a super outdated SoC and players are fine with it. margins are probably good so why bother with the ps6/xbox 180?
The best way for nvidia to compete with custom silicon might be to cut prices on their massively overpriced GPUs. Those 70 percent margins are not sustainable and create an incentive for big customers to roll their own.
There are two issues with consumer SOCs confronted by design producers. The first issue is making margin in relation the variable cost of design production including the foundry mark up. The second issue is wafer supply that coincides with the first, making margin.
Observing Nvidia Maxwell Switch and AMD Renoir PS5 and Xbox the products held wafers and starts but were not a great margin contributor. They were in fact marginal cost production contributors that offset the cost of wafer reservations (supply) waiting for high margin product allocation 'starts'' which in 2023 for AMD is Genoa. Nothing wrong with this low margin SOC business it pays for waiting wafers holding foundry starts subject 'price at cost' anticipating a higher margin production opportunity.
AMD made about $22 per PS5/Xbox SOC on the royalty and appears to make in the hundreds of millions for design work. The question then becomes if you reserve silicon for marginal cost SOC production, what picks up that slack production in the future to actually turn a competitive profit.
Noteworthy AMD 7840U in Rog Ally does make a competitive profit commensurate AMD gross margin objective where PS5/Xbox and Switch were all 'in fact' a gross margin drag. They held wafers and starts but took from gross margin it's a delicate balancing act.
We’ve updated our terms. By continuing to use the site and/or by logging into your account, you agree to the Site’s updated Terms of Use and Privacy Policy.
Facebook
Twitter
RSS
10 Comments
Back to Article
NextGen_Gamer - Tuesday, February 13, 2024 - link
I am thinking that the Switch 2 and its custom NVIDIA SoC will be one of the first announcements of this new division, if NVIDIA makes it official. As the article said, it would be though for NV to get into the PS6 or Xbox Next console. Sony has a horrible history of backwards-compatibility, essentially entirely relying on hardware-compatibility to achieve it. PS2 had the entire PSone CPU/GPU/RAM on board, and PS3 in turn had the PS2 CPU/GPU/RAM on it, and then actually did use software-emulation for PSone. PS4 had zero compatibility at all. PS5 runs PS4 purely because it is the same x86-64 architecture CPU and and AMD GPU.Microsoft would have an easier time since their consoles have been using the DirectX API going back to Xbox original, but even still it would require a ton of effort. They wrote full software emulation for Xbox OG and Xbox 360 to run on Xbox One/Xbox Series, and they would have to almost redo that entirely to get it to run on an ARM/NVIDIA system. Not to mention also creating software emulation for Xbox One/Xbox Series to run on it.
domboy - Tuesday, February 13, 2024 - link
Well, Microsoft already has an x86/x64 emulation layer in Windows on ARM. Maybe getting that to work on a console would be a lot of work, I'm not sure, but I expect that they wouldn't have to start from scratch.I do hope nVidia will get back into suppling chips for Surface devices though. That could technically fall under the custom chips category.
NextGen_Gamer - Tuesday, February 13, 2024 - link
That's true, I suppose it wouldn't be starting from scratch but probably still a lot of work. Since the PS4/Xbox One, it seems the APU is just the way things are now for consoles. But there is always a small chance MS could ask AMD for a crazy small 16 x Zen 5c processor or something, along with a beefy discrete NVIDIA GPU, in order to keep the base CPU architecture as x86-64 still. I just think it's unlikely at this point.PeachNCream - Tuesday, February 13, 2024 - link
NV is worth more than China's entire stock market due in no small part to its AI and HPC units. At this point AMD probably only exists because NV buying it would run afoul of antitrust laws and the US SEC or whatever government organization it is that regulates mergers likely blocking a consolidation.Dante Verizon - Tuesday, February 13, 2024 - link
NVidia will not reach consoles beyond the Switch, but will reach cell phones through Mediatekkn00tcn - Tuesday, February 13, 2024 - link
sony already made the deal, nvidia will not be in ps6 or next portablexbox who knows, very shaky department right now
"NVIDIA is of course interested in expanding its footprint in consoles – right now they are supplying the biggest selling console supplier, and are calling on Microsoft and Sony every week to try and get back in,"
weird sentence that needs more or changed words (at least remove 'supplier')
whatthe123 - Wednesday, February 14, 2024 - link
it also seems weird for nvidia to be trying to get back into high performance console manufacturing. the margins are low for chip suppliers and nothing or negative at launch for console manufacturers. they could be spending those wafers on more AI chips.meanwhile the switch uses a super outdated SoC and players are fine with it. margins are probably good so why bother with the ps6/xbox 180?
lmcd - Wednesday, February 14, 2024 - link
Nvidia wants the next Xbox so that they get into the Xbox Cloud racks, or even better rent to Xbox!Blastdoor - Wednesday, February 14, 2024 - link
The best way for nvidia to compete with custom silicon might be to cut prices on their massively overpriced GPUs. Those 70 percent margins are not sustainable and create an incentive for big customers to roll their own.Bruzzone - Wednesday, February 14, 2024 - link
There are two issues with consumer SOCs confronted by design producers. The first issue is making margin in relation the variable cost of design production including the foundry mark up. The second issue is wafer supply that coincides with the first, making margin.Observing Nvidia Maxwell Switch and AMD Renoir PS5 and Xbox the products held wafers and starts but were not a great margin contributor. They were in fact marginal cost production contributors that offset the cost of wafer reservations (supply) waiting for high margin product allocation 'starts'' which in 2023 for AMD is Genoa. Nothing wrong with this low margin SOC business it pays for waiting wafers holding foundry starts subject 'price at cost' anticipating a higher margin production opportunity.
AMD made about $22 per PS5/Xbox SOC on the royalty and appears to make in the hundreds of millions for design work. The question then becomes if you reserve silicon for marginal cost SOC production, what picks up that slack production in the future to actually turn a competitive profit.
Noteworthy AMD 7840U in Rog Ally does make a competitive profit commensurate AMD gross margin objective where PS5/Xbox and Switch were all 'in fact' a gross margin drag. They held wafers and starts but took from gross margin it's a delicate balancing act.
mb