AMD will continue as the exclusive hardware supplier for the PlayStation 6, following a competitive negotiation process that saw Intel come close to securing the contract. According to a report from Reuters, Intel was in advanced talks with Sony but ultimately lost out due to disagreements over profit margins.
The contract was estimated to be worth around $30 billion, which could have significantly bolstered Intel’s revenues amid its recent financial struggles. Securing the PlayStation 6 deal would have not only improved Intel’s financial position but also boosted the credibility of its foundry business and chip design capabilities, rumored to be potential divestments.
However, negotiations reportedly broke down in 2022. Intel’s desire for a larger profit margin on each chip, along with the technical challenge of ensuring backward compatibility with the PlayStation 5 while transitioning to a new platform, ultimately led Sony to opt for AMD once again. This decision further solidifies AMD’s position in the console market as a key partner for Sony.
AMD’s aggressive strategy
The information obtained by Reuters underscores Intel’s short-term focus on profitability. If Intel had been more flexible regarding profit margins, it could have demonstrated its foundry’s capabilities in sectors beyond its core computer, server, video card, and artificial intelligence markets.
While video game consoles have traditionally offered lower profit margins, Intel would have benefited from the high volume of steady console sales, keeping its production lines active and possibly drawing interest from future clients. This could have helped Intel compete more directly with TSMC, its key rival in semiconductor manufacturing.
On the other hand, AMD played a strategic game to secure the PlayStation 6 contract. By offering lower profit margins and emphasizing its ability to ensure backward compatibility with previous PlayStation generations, AMD, under the leadership of Lisa Su, managed to outmaneuver competitors like Broadcom and TSMC, eventually leaving Intel as its final rival.
When approached by Reuters, Intel disputed the characterization of the negotiations but declined to comment further on potential partnerships or future deals. Similarly, AMD declined to provide any additional details regarding the contract.
When will the PlayStation 6 be released?
With the recent announcement of the PlayStation 5 Pro, we will likely not see any official announcements about the PlayStation 6 for several years. However, industry expectations suggest that the PlayStation 6 could be released around 2028. If AMD continues to be the hardware supplier, it’s anticipated that the PlayStation 6 will feature an APU (Accelerated Processing Unit) based on AMD’s future Zen 6 CPU and RDNA 5 GPU architectures.
These architectures would significantly leap from the current Zen 2 and RDNA 3 technologies used in the PlayStation 5, offering substantial improvements in processing power, graphics performance, and energy efficiency. This advancement would position the PS6 to handle even more demanding games and next-gen experiences, ensuring it remains competitive in the evolving gaming landscape.
