Intel tried but failed to secure $30 billion PlayStation 6 contract

Sep 17, 2024

Intel lost a $30 billion PlayStation 6 chip contract to AMD despite lengthy negotiations with Sony.

Intel tried but failed to secure $30 billion PlayStation 6 contract

: Intel failed to secure a $30 billion PlayStation 6 contract with Sony, losing to AMD for the third consecutive time. Despite intense negotiations and consideration of Intel's process nodes, Sony opted for AMD's processors due to better profit margins and backward compatibility. This loss is another setback for Intel, which is struggling with market share and financial challenges. AMD's previous success with the PlayStation 4 highlights the significance of console deals in the chip industry.

Intel's bid to secure a $30 billion contract to design and manufacture chips for Sony's PlayStation 6 was unsuccessful, with AMD outbidding both Intel and Broadcom for the third consecutive time. Negotiations between Intel and Sony began following the announcement of Intel's new fab plans in 2021, but they couldn't reach an agreement on chip profit margins.

Sony's decision to go with AMD again was influenced by the ease of backward compatibility with existing AMD x86 hardware. Switching to an Intel processor would have been costlier and more challenging, despite lengthy discussions involving top executives and engineers from both companies.

The contract could have provided a much-needed revenue boost for Intel amid its current struggles, which include losing data center CPU market share and failing to capitalize on the AI boom. The loss of the PlayStation 6 deal underscores the competitive nature of the console market, where securing a deal can significantly impact a company's financial health.