Is AMD designing Nintendo’s next-generation NX console?

18 Jul 2015 | Author: | No comments yet »

“Devil’s Third” first impressions.

Yesterday, on AMD’s conference call, CEO Lisa Su announced that the company had recently added a new embedded design win to its portfolio, though without a firm date on when the company might recognize revenue from the win.

Nintendo has already partnered with AMD for the GPU in the WiiU, so rumours that their next console could have an AMD processor isn’t so far fetched.Apparently, AMD claims that its current financial position is caused by the general hit the PC markets took these recent months as PC components have just hit a new low in shipments across the world.Recent reports indicate Nintendo (OTCMKTS: NTDOY) and AMD (NASDAQ: AMD) are partnering to fabricate the processor for the Japanese console maker’s next-generation console, the .

Its sales have had a few peaks with the launches of games like Mario Kart and Super Smash Bros., but most of the time, the system has been in the news as Nintendo’s failed experiment. One potential candidate for a hypothetical new device is Nintendo, which announced earlier this year that it would launch a new hybrid mobile device in 2016, codenamed the NX. The AMD stock opened at a stock price of 1.87 down -0.09 or -4.59% at the time of writing this report, which sets the company’s market capitalization at $1.53 billion (€1.40 billion). Advanced Micro Devices still hasn’t confirmed anything yet, but the evidence is growing that it’s designing the processor behind Nintendo’s upcoming codenamed NX video game console, which is expected to launch in 2016.

The weird idea of having a screen on your controller and having subpar hardware in the system made third party developers not want to make games for it which has only sunk it further into obscurity. One of the chips was described as being made for a “beyond gaming device,” leaving us to infer that the other would be for a console or something game-related at the very least. It’s a well known fact that AMD had designed and now supplies the processors for all the three major gaming consoles, including the PS4, XBOX ONE and Wii U. He was quoted by as saying, “I will say that one [design win] is x86 and [another] is ARM, and at least one will [be] beyond gaming, right.

With AMD’s highly successful APU – Accelerated Processing Unit – design combining both x86 CPU cores and a robust graphics engine on a single piece of silicon makes it the ideal solution for compact gaming machines. In a conference of December of last year, months before the NX was announced, AMD CFO Devinder Kumar was quoted saying that AMD is working on two customized chips based on x86 and ARM architectures, respectively. Warning liquidations come from across the media with sales drop that have reached quarterly earns below $1billion (€919million), with annual sales growth for the five past years of 0.40%. Nintendo is of course still dominating the handheld market and recently the release of Splatoon has been a hit, but the future of the console is grim to say the least. The difference between Nintendo and Sony/Microsoft, however, is that Nintendo appears to have licensed an AMD GPU design that’s built by a third-party, Renesas, and the GPU they licensed — by all accounts, a derivative of AMD’s HD 4000 family — was already quite dated even when the Wii U was new.

This new dire financial situation at AMD has prompted countless rumors of AMD splitting its CPU manufacturing department or even more radical ones, and not completely impossible, that Microsoft has plans to buy the company to increase its chip manufacturing facilities and to save costs for mobile processing units. They are going to announce it and then […] you will find out that it is AMD’s APU that is being used in those products.” And now today, AMD chief executive Lisa Su has confirmed a third semi-custom chip contract for a project potentially worth a billion dollars in sales, according to venturebeat via nintendolife. We still don’t exactly know any real details of the hardware, other than it’s going to be a nexus for an ecosystem of devices including smartphones, tablets, PC’s and Nintendo products. This is broad enough to mean almost anything — a tablet like Nvidia’s Shield could conceivably be classified as a “hybrid” if connected to a television, since the machine supports video-out and wireless controllers, while an ultra-portable living room system could conceivably be declared “mobile” as far as picking it up and walking away with it. It would make sense for Nintendo to continue its relationship with AMD (which makes the graphics chip for the Wii U) and switch to use x86 architecture in its next-generation design, which Nintendo announced would be called the NX.

Both of these things are very unique to this family friendly game machine which means that it needs to exceed to grab part of the more mature gaming market. Satoru Iwata’s recent passing could change that, if the company’s new president and CEO has a different vision for the future, but Nintendo has a decade-long history of preferring alternative control schemes and innovative technology over raw horsepower. Intel makes such chips as well, but AMD had an edge in the previous generation of consoles because it focused much more on the graphics side of the chip.

Sony and Microsoft have historically leapt for new process nodes and die shrinks as quickly as they were available, while Nintendo followed updates its consoles at a far more leisurely pace. However, coming late at the FinFET process technology R&D compared to Intel, GlobalFoundries and IBM shows an unpredictable financial position that may turn against the company on the long run. AMD confirmed that the latest design win announced in the Q2 earnings call is also x86 based making this the company’s fourth design to incorporate the x86-64bit CPU architecture. We predict that while Intel launches its first 14nm process technology CPU, AMD will come with its own eight-core 14nm FinFET barely during next-year’s summer, as the move from wafers to production levels FinFET takes months to achieve.

The current Wii U is built on 45nm technology, which means Nintendo could solve the backwards-compatibility issue simply by sticking a 14nm Wii U variant directly into the NX platform. Gameplay footage released from a developer should highlight its strengths, and if I can already see the games weaknesses, then there is a serious problem. Then again, a mobile-centric device might eschew backwards compatibility altogether, since such a move would eat up board space when internal volume is at an absolute premium. The game looks like a late Playstation 2 game, the dialogue sounds like it was written by a freshman in high school, the sound effects somehow sound “cheap”, the protagonist looks uninteresting, and the gameplay itself looks uninteresting.

It was widely speculated that the ARM semi-custom chip would end up as the processor that would power Nintendo’s new handheld device, while the x86 chip announced alongside it would be a tailor-made server chip. With Nintendo, AMD would have to come up with an APU that handled both the CPU and GPU functions and be able to handle the PowerPC processing as well (in order to run older Nintendo games). It allows all the developers that worked on games for the PC, PS4 and XBOX ONE to can carry over their experiences to the Nintendo NX without having to go through another the hurdle of working on a different architecture like IBM’s PowerPC. All the while backward compatibility to older Wii U games can be maintained through emulators enabled by the significant performance jump that the new x86 CPU is bound to bring. If Nintendo decided to move to a customized version of Android, it could take advantage of the work done by other companies to create an Android gaming ecosystem.

The system’s designers have to figure out their specifications and hire chip makers, and then those folk have to design and start manufacturing chips. Nintendo’s decision-making process may be informed as much by hardware as by software — if Nintendo wants to emphasize its mobile gaming division and its new-found efforts to branch into smartphones and tablets, it could theoretically partner or license Nvidia’s graphics technology, combine it with a core license from ARM, and fab the chips at Samsung, GF, or TSMC. Rather it was based on two embedded processors one from IBM and one from AMD A small PowerPC CPU and a separate graphics chip from AMD, both of which were standard embedded products.

One final note: While winning a new Nintendo console would generate positive buzz for AMD, I wouldn’t expect the company’s revenue to take a dramatic kick upwards as a result. Which makes TSMC’s 16nm FinFET or Samsung’s 14nm FinFET the perfect manufacturing nodes for it rather than the old 28nm node that current console chips are based on. Patrick Moorhead, an analyst with Moor Insights & Strategy, said regarding AMD and Nintendo, “I think it’s a very high probability unless Nintendo goes Android where I would expect them to go with Nvidia.” Nvidia has a Tegra processor for Android devices, and it is shippin its own set-top box for gaming and entertainment, the Nvidia Shield set-top box, with Nvidia’s own Tegra X1 processor.

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