The First Xbox Handheld. Can Intel afford to lose the console/handheld market?

[soAsian]

It will use the AMD Ryzen AI Z2 Extreme processor. Both current-gen Xbox and PlayStation consoles use AMD Zen 2.

ARM has taken over the mobile/tablet/phone market. Cloud providers like AWS are coming out with their own ARM-based servers.
Qualcomm is getting into Windows PCs/laptops.

Intel faces AMD and ARM for PC and server. Is the console/handheld profit margin just too low for Intel? Can Intel afford not to be in the console/handheld market?

 

[Maximus]

Intel faces AMD and ARM for PC and server. Is the console/handheld profit margin just too low for Intel? Can Intel afford not to be in the console/handheld market?

The console and handheld markets are neither large enough nor sufficiently profitable for Intel. The gross margin falls well below the 50% threshold recently established for new product launches. While this sector was crucial for AMD due to its scale at the time, it does not offer the same strategic value for Intel.

 

[Daniel Nenni]

The console and handheld markets are neither large enough nor sufficiently profitable for Intel. The gross margin falls well below the 50% threshold recently established for new product launches. While this sector was crucial for AMD due to its scale at the time, it does not offer the same strategic value for Intel.

Agreed, I don't think this market is the best use of Intel resources. Mobile (low power) devices historically have been a challenge for Intel. This monster will probably keep you warm at night.

 

[siliconbruh999]

Agreed, I don't think this market is the best use of Intel resources. Mobile (low power) devices historically have been a challenge for Intel. This monster will probably keep you warm at night.

Lunar Lake is one such product that Excels at low power and the challenge is mainly due to their methodology of the raw performance that they like over anything else.

 

[hist78]

The console and handheld markets are neither large enough nor sufficiently profitable for Intel. The gross margin falls well below the 50% threshold recently established for new product launches. While this sector was crucial for AMD due to its scale at the time, it does not offer the same strategic value for Intel.

I can’t say for certain whether the profit margin would be attractive enough for Intel to re-enter the game console market, but in terms of volume, is the console market really too small for Intel?

For example, the Sony PlayStation 5, released in 2020, sold approximately 18.5 million units in the fiscal year 2024 alone.

By comparison, a total of 262.7 million PCs were sold worldwide in 2024, with Apple accounting for 22.9 million units of its Mac PCs and notebooks.

Considering that the PlayStation 5 sold 18.5 million units in a single year, four years after launch, this volume for a single console product line doesn’t seem too small to me.

2024 Worldwide PC Shipments

PC worldwide shipments are in millions of units

Source: https://my.idc.com/getdoc.jsp?containerId=prUS53061925#:~:text=For the full year, PC,outlook and difficult demand planning.

 

[Maximus]

I can’t say for certain whether the profit margin would be attractive enough for Intel to re-enter the game console market, but in terms of volume, is the console market really too small for Intel?

For example, the Sony PlayStation 5, released in 2020, sold approximately 18.5 million units in the fiscal year 2024 alone.

By comparison, a total of 262.7 million PCs were sold worldwide in 2024, with Apple accounting for 22.9 million units of its Mac PCs and notebooks.

Considering that the PlayStation 5 sold 18.5 million units in a single year, four years after launch, this volume for a single console product line doesn’t seem too small to me.

AMD Reports Fourth Quarter and Full Year 2024 Financial Results

SANTA CLARA, Calif., Feb. 04, 2025 (GLOBE NEWSWIRE) -- AMD (NASDAQ:AMD) today announced financial results for the fourth quarter and full year…...

ir.amd.com

Thanks for the volume reference. My focus is primarily on revenue.

Based on AMD's financial reports, its gaming segment revenue for 2024 was $2.6 billion, reflecting a 58% decline from the previous year, mainly due to a drop in semi-custom revenue.

Considering Intel's current annual revenue of approximately $50 billion, AMD's entire gaming segment accounts for about 5% of Intel's total revenue.

AMD Reports Fourth Quarter and Full Year 2024 Financial Results

SANTA CLARA, Calif., Feb. 04, 2025 (GLOBE NEWSWIRE) -- AMD (NASDAQ:AMD) today announced financial results for the fourth quarter and full year…...

ir.amd.com

 

[hist78]

Thanks for the volume reference. My focus is primarily on revenue.

Based on AMD's financial reports, its gaming segment revenue for 2024 was $2.6 billion, reflecting a 58% decline from the previous year, mainly due to a drop in semi-custom revenue.

Considering Intel's current annual revenue of approximately $50 billion, AMD's entire gaming segment accounts for about 5% of Intel's total revenue.

AMD Reports Fourth Quarter and Full Year 2024 Financial Results

SANTA CLARA, Calif., Feb. 04, 2025 (GLOBE NEWSWIRE) -- AMD (NASDAQ:AMD) today announced financial results for the fourth quarter and full year…...

ir.amd.com

If we are looking into the revenue, should we compare one AMD console product revenue to one Intel product revenue?

If 5% of the revenue is the threshold to decide if an Intel product deserves to keep, Intel can only sell up to 20 products. If the threshold move up to 10%, then Intel is limited to sell up to 10 products.

Because Intel has so many products, I guess some of them may not contribute revenue big enough to surpass 5% of the Intel total sales at all.