Intel lost PlayStation 6 chip contract over profit margins and backwards compatibility concerns, according to report
According to a report from Reuters, Intel's loss may have been AMD's gain.
Intel may have missed out on a signficiant PlayStation 6 contract, which would have seen the company's chips be used in Sony's next-gen console. This comes from a new report from Reuters, which claims that Intel may have ultimately lost out on the deal due to a disagreement on profit margins and concerns around backwards compatability.
The report, published late yesterday, cites sources which state that AMD has picked up the PS6 bag after Intel was no longer the frontrunner. This deal, if locked in by Intel and Sony, would have amounted to billions of dollars in revenue according to two of Reuters' sources.
The Reuters report states: "A dispute over how much profit Intel stood to take from each chip sold to the Japanese electronics giant blocked Intel from settling on the price with Sony, according to two of the sources. Instead, rival AMD landed the contract through a competitive bidding process that eliminated others such as Broadcom (AVGO.O), until only Intel and AMD remained".
In addition, am emphasis placed on backwards compatability also led to the decision, according to Reuters. As AMD made the PS5 chip, the ability for the PS6 to be backwards compatable with PS5 games would be a lot simpler than the alternative scenario, where a different chip manufacturer stepped in to create a new PS6 chip.
An Intel spokesperson told Reuters: "We strongly disagree with this characterization but are not going to comment about any current or potential customer conversations. We have a very healthy customer pipeline across both our product and foundry business, and we are squarely focused on innovating to meet their needs." Neither Sony, Broadcom, or AMD responded to Reuters as of writing.
Rumours, speculation, and little tidbits about the PS6 are all over the internet at the moment. Sony has only recently announced the PS5 Pro, with its high price point shocking many potential purchasers. Eyes are certainly on the future of the PlayStation and its next big totally fresh console release, especially as Microsoft has laid the groundwork for what could be an impressive console release in the near future.
This is just one crumb of info in what will surely be a lengthy trail of clues into what form the PlayStation 6 will ultimately take. One thing's for sure; this seems like a major win for AMD.