Mosesmann estimates that gaming consoles could be an approximately $1 billion revenue opportunity for AMD next year, as the company will be powering Sony Corp.'s new PlayStation 4 and Microsoft Corp.'s latest Xbox.
The analyst said that AMD is an undervalued stock whose server prospects are the best they've been in years, but still favors Applied Micro Circuits Corp.
Problem is, AMD will lose at least $2 billion in mainstream CPU product revenues over the same period. AMD has never lost market share as fast as it is presently. You can't replace high margin high volume business with low margin high volume business and expect to reverse a revenue and margin decline.
That $1 Billion from gaming consoles is a 'best case' blow-out estimate. I seriously doubt that figure as does just about everyone else. There is a lot of pent up demand for the new consoles but people are now stepping back and saying, DANG!' at the cost of the new XBox. Microsoft is also STILL selling the old XBox and announced plans to continue to do so---and that XBox does not have an AMD chip. I think the ramp up of sales of the NEW consoles is going to be much slower than people anticipate....also why DO people keep forgetting about the collapse in the desktop market? That was a far, far bigger market than gaming consoles? It is like a guy on the Titanic rented a small submersible pump from Home Depot and then tells the passengers not to worry......