AMD’s Microsoft Xbox One Deal Could Be Worth $3 Billion, Ex-Exec Says
AMD’s agreement with Microsoft to build chips for the upcoming gaming console is a big win for its semi-custom silicon efforts.Advanced Micro Devices' deal to supply chips to power Microsoft's upcoming Xbox One gaming and entertainment console could be worth as much as $3 billion, according to a former company executive who now works for rival Nvidia. In a statement on his LinkedIn site, Bob Feldstein, former vice president of strategic development at AMD and current vice president of technology licensing at Nvidia, wrote that AMD developed custom silicon for Microsoft to be used in its Xbox One console, and that "this project is valued at $3+B." Not only does the agreement with Microsoft represent a good deal of money for AMD, but it also is a significant step in the chip maker's efforts in creating a semi-custom silicon business, part of AMD's strategic plan to expand into new growth areas to diversify its business and reduce its reliance on the contracting PC market. Feldstein said he was part of the AMD team for the Xbox One project, with his involvement being "focused on business management and supply agreement negotiations. 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, multi-year deals," he wrote.
Microsoft officials on May 21 officially unveiled the Xbox One, a console four years in development that not only can be used for playing video games but will be a central computing feature for most forms of entertainment, from TV to movies. During the event, the officials reportedly said little about AMD's involvement, which primarily centers around providing the eight-core accelerated processing unit (APU) that will power the device.