No one appears to have mentioned the important meta game going on: Intel bidding as a credible alternative supplier. For Intel, by bidding they get to undercut AMD's profits. For Sony, they get a credible alternative which they can pretend would be a viable choice. Thus forcing a slightly better deal from AMD. We saw similar articles related to the Switch 2. That time it was AMD acting as spoiler to Nvidia. Nvidia re…
Adding a bit more context. Nvidia got the bid for Switch when they were basically dumping those unwanted Tegra to Nintendo for an incredibly low price. Xbox and Playstation dont earn AMD much profits at all. AMD had this Custom Processor segment to barely keep them surviving, people may forget AMD was only worth ~$3B market cap in 2016. They are now at ~$250B. On the subject of software compatibility though, one thin…
It doesn't cost them much either. Lisa Su, in an interview that was posted to HN a few months ago, said it is a deliberate strategy to repackage IP AMD has already developed. They are willing to pull designs from the shelf and customize it to meet partners needs. Having a long tail of products adds up, and sets you up to get first dibs on higher margin partnerships in the future.