Intel Looking to Grab Microsoft Xbox Semi-custom SoC Business from AMD

[btarunr]

Intel is reportedly pitching Microsoft to work on an "all American" semi-custom SoC for Microsoft's next Xbox generation that succeeds the Series X/S. The company's main pitch to Microsoft is the fact that the chip would be made entirely in the US, including its silicon fabrication and packaging. Microsoft currently relies on AMD for its SoC, which combines an AMD "Zen 2" CPU with a powerful RDNA2 iGPU that meets DirectX 12 Ultimate requirements.

Intel's semi-custom chip could be functionally the same, albeit based on its next generation CPU and graphics microarchitectures. Strengthening Intel's case is the fact that it now has a contemporary high performance gaming graphics architecture in Xe "Alchemist," and is on course to launch its successor, the Xe² "Battlemage," later this year. The company also made huge strides with chiplet-based SoCs as demonstrated with "Meteor Lake." Intel's semi-custom SoC for Microsoft could combine any of its upcoming CPU microarchitectures, such as "Lunar Lake," or "Panther Lake," and an iGPU based on "Battlemage" or Xe³ "Celestial." This chip could also integrate a next generation NPU if the platform calls for one. This wouldn't be Intel's first rodeo with powering a console; in fact the very first Microsoft Xbox was powered by a Pentium 3 "Coppermine" CPU, paired with a discrete GeForce 3 GPU supplied by NVIDIA.



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[theouto]

The news sounded absolutely bizarre to me, and then I saw the source, checks out.

 

[chris.london]

But all those "high-performance" GPUs are made by TSMC. What a bizarre story.

 

[qlum]

If there is going to be a new generation of Xbox, I feel like it will be a lower-key effort by Microsoft.
They have been clearly losing 2 generations in a row, so it may as well be their last real console generation.

 

[Denver]

Wait... Moore's Law is Dead ? For real ?

 

[Dristun]

Wait... Moore's Law is Dead ? For real ?

Every tech site is forced to report on his incessant drivel because otherwise they're losing on traffic.

 

[Ferrum Master]

How about putting yellow background on these "news"?

 

[Imouto]

You know this is BS when the most likely development is Xbox exiting the console business after Series sells less than One.

 

[nguyen]

MS should just close down Xbox division and focus on improving PC gaming.

 

[Assimilator]

Every man and his dog knows that Intel would love to steal marketshare from AMD. But MLID claims that Intel has made an actual formal offer to do this, and suddenly it's news?

 

[Onasi]

The whole “Microsoft should just quit/stop making consoles” is bizzare to me. Stop viewing their XBox division as competing with Sony or Nintendo. They are not, MS are not idiots (whatever you might personally think aside), they realize that this isn’t a fight they can win anymore. And that’s fine. Their whole new approach is obviously Game Pass and the consoles themselves are just a gateway to that. Becoming the de facto Netflix of gaming is a lot more valuable than winning the console war against an increasingly decrepit Sony. Now if THAT fails, then they might to start looking for an exit strategy. But so far, it seems to be working.

Oh, and as for the news - Intel might offer whatever they want, but I doubt MS will agree until they will see an Intel semi-custom doing well in some other product. I don’t think they want to gamble that much.

 

[Assimilator]

The whole “Microsoft should just quit/stop making consoles” is bizzare to me. Stop viewing their XBox division as competing with Sony or Nintendo. They are not, MS are not idiots (whatever you might personally think aside), they realize that this isn’t a fight they can win anymore. And that’s fine. Their whole new approach is obviously Game Pass and the consoles themselves are just a gateway to that. Becoming the de facto Netflix of gaming is a lot more valuable than winning the console war against an increasingly decrepit Sony. Now if THAT fails, then they might to start looking for an exit strategy. But so far, it seems to be working.

Oh, and as for the news - Intel might offer whatever they want, but I doubt MS will agree until they will see an Intel semi-custom doing well in some other product. I don’t think they want to gamble that much.

It never ceases to amaze me how so few people understand that console hardware is nothing more that a gateway into console software. Consoles themselves are always sold at a loss because that loss will be more than recouped over that console's lifetime by the games that are purchased.

 

[watzupken]

All American made chip? But their GPUs even integrated ones are made by TSMC. So it does not make sense to me. And while I think there are merits to Intel’s solution, I don’t think their software is good enough at this point. The performance is all over the place and may be a nightmare for game developers to work with.

 

[Nostras]

Exciting if Microsoft actually commits. This would give a lot of legitimacy to Intel's GPU division and guarantee that they will stick around for real.

 

[Vya Domus]

Boy will they regret this one if true, not only it will probably way worse performance and efficiency but Intel will ask an arm and a leg for a console SoC. What are they thinking ?

 

[Onasi]

It never ceases to amaze me how so few people understand that console hardware is nothing more that a gateway into console software. Consoles themselves are always sold at a loss because that loss will be more than recouped over that console's lifetime by the games that are purchased.

Yup. And, knowingly or not, the AAA publishers are absolutely giving MS a gift by upping the price on the next (current now) gen titles to 70 bucks. The more they do it, the more the Game Pass will look as an attractive option, even if MS ups the subscription. And soon enough, with balooning budgets going out of control, these same publishers will not be able to afford not being on said Game Pass. Sure, something like GTA 6 might be able to stand on its own, but a lot of other games? Not so much. And for MS it doesn’t actually matter whether they get their cut in the form of a full price game percentage or from the sub. It works out either way.

 

[Daven]

News stories like this always seem to be a way to temporarily increase a company’s stock price so the rumor’s originator can make a short sale.

 

[john_]

Intel is already in bed with Microsoft considering the Surface line up. So getting also the XBOX business does makes sense. Their first GPUs where not really great, but good enough for the low-mid range. Their first effort in RayTracing and Upscaling was also good enough and their problems with drivers will be non existed in a console environment. So, they only need to offer a good cheap solution to MS to get the job. On the other hand MS needs to differentiate itself from SONY, in hardware, to even have a chance. There are two ways to do it. Go Nvidia, which is a problem, because Nvidia doesn't offer an X86 CPU, or go Intel. Intel wanting to get in a new market, start increasing revenue for it's GPU department and also finally having a reason to say that it won AMD on it's own game, I believe will offer a console SOC at cost to MS.

Ignoring the source and it's non credible past, this could really happen.

 

[Imouto]

MS should just close down Xbox division and focus on improving PC gaming.

Even more taking into account that Valve is nibbling at its heels with SteamOS.

 

[watzupken]

It never ceases to amaze me how so few people understand that console hardware is nothing more that a gateway into console software. Consoles themselves are always sold at a loss because that loss will be more than recouped over that console's lifetime by the games that are purchased.

What I cannot understand is Microsoft’s strategy here. What you said is correct, but this is also Microsoft’s problem, and that is the software is not exclusive to their console. The same day the game is available on Xbox, it’s generally also available on the PC. So selling console at a loss and not able to recoup their losses quickly means they will never be as profitable as compared to Sony. Sony’s strategy of PS5 exclusivity for a couple of years and then selling the same game on PC market later helps rake in profits longer.

 

[pressing on]

All American made chip? But their GPUs even integrated ones are made by TSMC. So it does not make sense to me.

That's the trouble with "rumours" once you look at them in detail they fall apart. The other version of this had Microsoft approaching Intel not with any real intention but only to put pressure on AMD over pricing. True, fake, who knows...

 

[SOAREVERSOR]

MS should just close down Xbox division and focus on improving PC gaming.

They'd improve it by speeding up it's move to the cloud or as a service. That is the future of PC gaming!

 

[Onasi]

What I cannot understand is Microsoft’s strategy here. What you said is correct, but this is also Microsoft’s problem, and that is the software is not exclusive to their console. The same day the game is available on Xbox, it’s generally also available on the PC. So selling console at a loss and not able to recoup their losses quickly means they will never be as profitable as compared to Sony. Sony’s strategy of PS5 exclusivity for a couple of years and then selling the same game on PC market later helps rake in profits longer.

Game Pass is their strategy. They don’t CARE how you get into their ecosystem and on what devices, just that you DO. They have no intentions of trying to beat Sony in a console war. It’s pointless. The mind share is too strong, people snatched up PS5s even when it had f**k all to play on it. But winning the subscription service for games market before it’s even fully formed? Now that is something they want. And arguing profitability is kinda pointless seeing how for MS the XBox division is something where they can play the long game and subsidize it via their different ventures. Sony is a completely washed up company, on the other hand, with their gaming division being almost the one thing keeping them afloat. That, and camera sensors. Even the strategy you mentioned with PC releases seems to be out of necessity, not anything else. And seeing how it’s accelerating (new Horizon is already coming to PC quite quickly) it seems that the increased budgets are forcing their hand.

Microsoft isn’t perfect by any means, the fact that they looked at getting BG3 on the Pass and decided against it, while valuing it only at 5 million as a “niche Stadia exclusive” shows that they are often quite blind to opportunities.

 

[Shou Miko]

So will this then get Intel's "premium" taxes less performance?

 

[Imouto]

Game Pass is their strategy. They don’t CARE how you get into their ecosystem and on what devices, just that you DO. They have no intentions of trying to beat Sony in a console war. It’s pointless. The mind share is too strong, people snatched up PS5s even when it had f**k all to play on it.

Microsoft only had FH5 in the first two years of Series on the shelves. And I mean a somewhat mainstream game. PS5 at least had something for its launch.

But winning the subscription service for games market before it’s even fully formed? Now that is something they want.

What's the point of winning that race when a subscription isn't even a good match for the media? They can put all the mid games they want on Game Pass and players will still play Baldur's Gate 3 for months wondering why they are paying for a subscription. Once they want to put it on any of the other consoles most of the appeal with the temporal third party games joining will be gone as it will be Microsoft's IP only.

And forking a 30% cut on top of that.

And arguing profitability is kinda pointless seeing how for MS the XBox division is something where they can play the long game and subsidize it via their different ventures. Sony is a completely washed up company, on the other hand, with their gaming division being almost the one thing keeping them afloat. That, and camera sensors. Even the strategy you mentioned with PC releases seems to be out of necessity, not anything else. And seeing how it’s accelerating (new Horizon is already coming to PC quite quickly) it seems that the increased budgets are forcing their hand.

Ahhh. But they put limits to how long they will be bleeding money. They probably gave themselves plenty of time to recover from the One disaster and they are doing even worse with Series. Something to think about is that their bonuses are also based on performance and Xbox has been missing them three years straight.

Satya Nadella’s compensation no longer tied to Game Pass growth after missing targets for two straight years | Game World Observer

In FY23, Microsoft CEO Satya Nadella’s performance-based pay targets were no longer tied to Game Pass growth, as opposed to the previous three fiscal years. This comes amid uncertainty and a lack of officially disclosed data about the current state of the subscription service.

gameworldobserver.com

Microsoft might be pretty happy going third, unlike Xbox fans.

Microsoft isn’t perfect by any means, the fact that they looked at getting BG3 on the Pass and decided against it, while valuing it only at 5 million as a “niche Stadia exclusive” shows that they are often quite blind to opportunities.

To be honest, most of the Xbox executives look like they've been conscripted into the division. The last appointment of Blizzard's president pretty much confirms it.

They went for the "Netflix of video-games" because they can't think of anything of their own and they have no taste on top of it as Steve Jobs said.