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."
Cute (Score:1)
Cute-A love connection? (Score:2, Funny)
Would you like a quiet moment alone?
Don't Forget the Silicon (Score:4, Interesting)
Re: (Score:2)
Not really. Those "bland name" companies are supplying to pretty much everybody. I
Re: (Score:1)
Its not an either/or situation though. BlandName Ltd. supplies silicon for IBM, they make money. Samsung asks them to supply them with silicon, they do, so they make even more money. Just because IBM gets silicon off them doesn't mean Samsung won't. Where, exactly is the zero-
Re: (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
Re: (Score:1)
Re:Don't Forget the Silicon (Score:5, Informative)
Re: (Score:2)
Re: (Score:1)
Don't mean to be sour, but... (Score:2, Offtopic)
Gee, maybe I should start a blog or something...? ^_^
Re: (Score:1)
Re: (Score:1)
Yes, you said it... just like everyone else (Score:3, Insightful)
Re: (Score:2)
To be literal (Score:1)
It is true, however, that they're winning the microchip wars for non-PC gaming.
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: (Score:2)
The console market provides the economy of scale, they can produce millions of chips for the console markets and sell them for a minimal profit, and then produce thousands of chips for more lucrative markets (the chips still cost the same to produce) and sell them at a huge markup.
Plus, by producing chips for console makers, these aforementioned console makers have paid for a huge chunk of the research and upfront tooling costs which will hugely benefit
Re: (Score:1)
Re: (Score:3, Funny)
Re: (Score:3, Funny)
You mean "pedants' meeting."
Re: (Score:2)
Money hats?! (Score:2)
They're not in the tinfoil hat business anymore?
Re: (Score:1)
http://www.penny-arcade.com/comic/2000/10/23 [penny-arcade.com]
What about if Sony botches the PS3? (Score:1)
Re: (Score:2, Interesting)
Re: (Score:2, Interesting)
Someone will look good at the end of it. And then IBM can say they helped.
Re: (Score:2)
And no, I don't drink the Kool-aide. I'm just glad that Sony only has a part of the control over the chip - otherwise licensing the tech would be astronomically expensive, and no one would even bother looking.
Re: (Score:1)
The real losers are the gamers... (Score:2)
Re: (Score:2, Interesting)
Now, not all titles use that much, but $20-$30 million dollar game budgets are not uncommon anymore.
Old news (Score:1)
Re: (Score:1)
http://games.slashdot.org/comments.pl?sid=206534&
Apple. (Score:5, Interesting)
In fact, since Apple went to intel chips, it almost seems like IBM has been able to expand and focus on other chips projects like the gaming systems. It seems like getting rid of Apple was a pretty good thing for them.
PS
go ahead I'm ready... let the Apple loving flaming begin.
Re: (Score:3, Interesting)
Re: (Score:3, Interesting)
Re: (Score:2)
For the lifetime of a console, you want every box to have a processor running at the same spec and for the price to decline as the years go by. Intel, on the other hand, would like to offer you a faster processor at the same price. For th
Re: (Score:2, Insightful)
Re: (Score:1)
Reducing porting time. (Score:3, Interesting)
If we want to talk about "who are the winners here?", I'd have to say it's the developers!
Re: (Score:2)
Re: (Score:2)
The reason is that IBM was making most of its PowerPC business on either powerful, server-level processors or on low-power embedded cores (often with only a subset of the PowerPC functionalities). Apple wanted a fast laptop chipset, which meant adding complex laptop-style power management circuiterey to a server-style chip, with probably a different fabrication process to boot.
There was no way to justify that much engineering cost for the meager volume that Apple was going to buy. Yes, Apple ships a l
Re: (Score:2)
The world is going laptops crazy, and Apple knows it.
Re: (Score:2)
Re: (Score:2)
In fact, IIRC, the IBM folks were more than happy to be rid of the Apple peeps, because they were so picky about their designs. IBM decided it would be better to have other customers.
Re: (Score:2)
So Apple was a bitchy customer back then, and source at IBM tell me they were very demanding with Big Blue, too.
Re: (Score:1)
FatPhil
...and the loser is Apple (Score:2)
Skin in the Game (Score:1, Interesting)
Cable companies and phone carriers demand "skin in the game." You don't get paid until your doodad turns a profit. They call their suppliers partners but in fact the suppliers are subsudizing carrier R&D with essentially an interest-free loan.
IBM did a similar thing with
should make a console (Score:1)
Deep Blue (Score:1, Funny)