Reuters has made an intriguing new report on the PlayStation 6, and a set of unlikely players.
According to the report, Intel bid and lost the contract to make the PlayStation 6’s CPU. This is not a loss for Sony as much as it was for Intel.
Of course, we had gotten used to both PlayStation and Xbox consoles being built on AMD chips for some time now. However, it has always been rumored that AMD’s position in the market was not set in stone, and Sony and Microsoft had always been talking to other companies to get their pitches.
So, it’s easy to see Intel competing with AMD for this contract. But Intel was also competing with Taiwan Semiconductor Manufacturing Co, AKA TMSC. That’s because Intel launched plans to start their own foundry business a few years ago, to compete with TMSC, Samsung, and others.
What this meant is that Intel would not only be designing the PlayStation 6’s CPU, like AMD has done for previous PlayStation consoles. They would also be physically manufacturing those CPUs on these foundries themselves.
Reuters posits that Sony’s console sold more than 100 million units in this half decade alone. This would have been a boon to Intel’s Foundry business, which has at least nine foundries in the works all across the world. While the game console business gives foundries low profits compared to AI chips, it would have been steady business for the company.
And Intel desperately needs that steady business. Last month, they reported a Q2 earnings decline of 1 % year over year, from net income of $ 1.48 billion to a net loss of $ 1.61 billion. They also announced plans to lay off 15 % of their workforce.
Reuters revealed that Sony and Intel spoke for several months in 2022, which involved meetings between their CEOs and executives, but also their engineers. The deal broke down because of disputes on how much profit Intel would take home.
Intel would have certainly wished they made different decisions, because the company is now in real peril of survival. While gamers are more likely to ‘side’ with AMD over Intel in PC gaming, Intel’s business encompasses too many facets of the tech industry for them to be allowed to fail.
While PlayStation moving from Intel to AMD seems perilous, Sony gamers may not realize how good they could have had it. Intel was awarded a CHIPS contract by the US government, and is building many of their upcoming foundries in the country.
Intel making the PlayStation 6 could have meant cheaper consoles for Americans, as the CHIPS contract could have meant most, if not all, of the console could have been made there. And in a roundabout way, most of the world would benefit too, as many game consoles are sourced from the US and then get spread around the world’s grey and white tech markets.
But then again, we can’t guarantee that Intel’s entry into this market could not have been in a disaster. Intel’s struggles as of late are tied to big bet mistakes from their management, and we can’t imagine those disappearing because Sony acquired this contract. Given the poor response of the PlayStation 5 Pro announcement, we aren’t sure ourselves if the PlayStation 6 itself is certain to appear in the future. Sony is no less vulnerable to market failure than Intel, but here and now, it’s Intel that’s in the losing spot.
