AMD has played a crucial role in powering Sony’s gaming consoles for the past two generations. However, a recent report reveals that Intel was in the running to create the chip for the yet-to-be-announced PlayStation 6. According to information from Reuters, there was a competitive bidding process between Intel and AMD for the contract, and ultimately, Intel did not secure the deal.
The negotiations with Intel reportedly fell through due to disagreements over the profit margins from each chip sold to Sony. Discussions spanned several months in 2022 and involved high-level executives, including the CEOs of both companies, along with numerous engineers and decision-makers.
In addition to financial concerns, compatibility issues also posed a challenge for Sony. Since previous consoles like the PS4 and PS5 utilize AMD technology, moving to Intel’s architecture could jeopardize backward compatibility, an important feature for console users. While compatibility between AMD and Intel isn’t typically a significant issue for PCs, it becomes far more critical in the tightly integrated ecosystem of game consoles, which operate on specialized software and their own distinct operating systems.
Intel has faced a series of financial challenges recently, including reports of record-low revenue, leading to investor lawsuits and an announcement of job cuts amounting to about 15% of its workforce. The company also canceled plans for its 20A manufacturing node in favor of focusing resources on its 18A technology, for which it has secured contracts with major clients, including Microsoft and the U.S. Department of Defense. Losing out to AMD for the PS6 contract could have meant missing out on approximately $30 billion in potential revenue.
While the bidding climate ultimately boiled down to a showdown between Intel and AMD, other firms like Broadcom were also considered for the PlayStation 6 partnership. In response to these developments, an Intel spokesperson expressed disagreement with the characterization of events but opted not to comment further on its current or potential negotiations with customers.