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Next Gen Console Winner Is IBM

Posted by ryuzaki0 on from the seekrit-console dept.

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."

9 of 58 comments (clear)

  1. Don't Forget the Silicon by eldavojohn · · Score: 3, Interesting

    Yeah, IBM did win. But every time a technological war is waged between two competitors in the United States, the default winners are the companies in the Philippines and other silicon producing countries. I mean, there's probably a lot of companies with really bland names that jump for joy when this stuff happens. IBM is cashing in but I'm sure everyone along the way from basic elements to full fledged product enjoys it too.

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    My work here is dung.
  2. Re:What about if Sony botches the PS3? by cmdrpaddy · · Score: 2, Interesting

    Hardly. Anyone that knows IBM made the chips will probably already be aware that it was Sony that screwed up, not IBM. Anyone else who knows that Sony screwed up more than likely wont know that IBM made the chips in the first place.

  3. Re:The real losers are the gamers... by Kirin+Fenrir · · Score: 2, Interesting

    Growing game budgets have been to blame for this. Final Fantasy XII, for example consumed $35 million in production costs.
    Now, not all titles use that much, but $20-$30 million dollar game budgets are not uncommon anymore.

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    Caffeine is my anti-drug!

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  4. Apple. by CDPatten · · Score: 4, Interesting

    Anyone else notice Apple leaving IBM hasn't made a blip in their profits? They really haven't skipped a beat.

    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.

    1. Re:Apple. by pilkul · · Score: 2, Interesting

      Speaking of which, I've always been confused as to why Apple decided it could get better performance with Intel instead of IBM, whereas Microsoft at the same moment made the exact opposite switch with the Xbox. What the heck is going on here? Anyone know a good reason?

    2. Re:Apple. by Wesley+Felter · · Score: 2, Interesting

      Performance for games and performance for media apps are not the same thing. And performance is not the only consideration for a console. There are rumors that MS wanted to own their chip designs, which was not an option for Intel processors. Also consider power, cost, customizability, etc.

  5. Re:What about if Sony botches the PS3? by mrvis · · Score: 2, Interesting

    If the PS3 does poorly enough, then either the 360 or the Wii will be a smashing success.

    Someone will look good at the end of it. And then IBM can say they helped.

  6. Skin in the Game by Anonymous Coward · · Score: 1, Interesting

    Don't bet on a big payoff in other areas of embedded devices right away. The videogame console makers may have been on cash & carry terms with IBM, but business with rental or monthly-recurring-charge revenue don't work that way.

    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 R&D on the game CPUs, but got paid per unit as they were deliverd. Imagine not getting paid until the XBOX360 breaks even and you have a better idea how some of these other target industries treat suppliers.

  7. Reducing porting time. by Ayanami+Rei · · Score: 2, Interesting

    No, I'm not kidding. It encourages ports of games developed for other next-gen platforms to the XBox 360, and it gives developers a warm fuzzy to aim for the 360 as their baseline target, and then tweak it to run on the Cell and/or Dolphin platforms.

    If we want to talk about "who are the winners here?", I'd have to say it's the developers!

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