Next Gen Console Winner Is IBM 58
Via Joystiq, an article on the Seattle Times points out what many of us have already known: IBM is the real winner of the console war. The company is providing chips for all three consoles, and is busily crafting money hats for everyone involved. From the article: "Using the engineering consulting work it did for Microsoft, Nintendo and Sony as a model, IBM has formed a new 'technology-collaboration solutions' unit that's expected to post $4 billion in revenue this year. Internal projections call for that division to hit $10 billion by 2010 and $20 billion by 2015. Those targets may sound high for a $91 billion company that is barely able to grow overall revenue. But hardware-division chief William Zeitler hopes to achieve them by replicating IBM's video-game collaborations in such industries as telecom, defense and medicine."
Re:To be literal (Score:4, Insightful)
the real point as I see it (and as the article states), is that IBM is leveraging the experience they have working with the console makers to solve their technical design problems to make a business unit that will pursue the same kinds of collaborations in telecom and elsewhere. it's not about selling the chips. It's about selling the technical expertise that is required to design products that use those chips.
nobody wins big by manufacturing the components that go into the console. "winning the micro-chip wars for non-PC gaming" is not much of a victory at all. The console makers sell those things at a loss for the most part, which means they nickel and dime their component suppliers to death on the costs. If you provide the chips (gpu/cpu), you win bragging rights, but that is about it. From a pure profit perspective you'd be much better off selling those chips to the non-console market where the profit margins on hardware are higher.
It's not about the chips. I think that probably works well for IBM's business model. I've never quite been able to figure out exactly how IBM operates, but they don't seem interested in making profits on hardware sales (not primarily anyway). They seem interested in making profits on selling high end technical services to other businesses.
Re:Don't Forget the Silicon (Score:3, Insightful)
Base material suppliers are typically selling to everybody in the industry. It doesn't matter if IBM or Samsung or AMD chips inside those consoles, its all coming from the same silicon, that's the zero-sum.
For example in the LCD market, there are only 3 or 4 major panel makers. In the 20" display market, if Apple captures marketshare away from Dell, the panel manufacturer doesn't gain, because both companies use the same panel [anandtech.com].
Yes, you said it... just like everyone else (Score:3, Insightful)
Re:Apple. (Score:2, Insightful)