Semiconductor industry Another challenge is that Intel has recently lost a key client in Sony’s PlayStation, and this is a very big blow for one of the biggest chips manufacturers in the world. In console gaming, Intel reigned supreme for years, and then Sony changed strategy, and rising competition from other foundries, particularly AMD caused the sea change. 
 

The collapse of the partnership happened when Sony thought it was high time to use AMD’s custom chips for Company PlayStation-related gadgets beginning with Company PlayStation 4. Some of the factors that led to this change included; Where previously the Intel Atom needed more powerful, energy-efficient, and integrated options that AMD was able to offer profitably. 

Highlights 

1- Intel also lost one of its longest-running relationships in the gaming console space to Sony PlayStation beginning with the PlayStation 4 all of which was powered by AMD. 

2- AMD’s custom-built chipsets were higher performing and more integrated for the gaming and graphics at a lower price than interleaved Intel solutions. 

3- The shift was a big moment for AMD, where it managed to establish itself in the gaming console market at the cost of Intel. 

Another reason that made Intel lose the PlayStation business was that AMD went further in offering a single chip that integrated a CPU and a GPU. This SoC was particularly suitable for applications such as gaming consoles, for instance, PlayStation in that it offered both processing power and better graphical capability coupled with a small size and less power consumption. Currently, Intel, the well-known CPU manufacturer, lacked a proper GPU solution that could be on par with AMD-integrated solutions at the time.

In addition, as AMD is a well-experienced service provider in delivering semi-custom chip solutions, Sony could easily engage AMD to fashion a chip that would perfectly fit the PlayStation’s required performance at an optimum chip cost. While Intel which was involved in the production of mainly general-purpose CPUs, could not be as elastic in meeting these custom design calls. 
 

The third factor was the costs of production which the company realized was more efficient to outsource. AMD was able to do so at a lower cost which is significant when it comes to consoles, which are considered to be in a commodity-like segment where every cost reduction can lead to a cut in the pricing of the console. This made AMD’s chips even more attractive to Sony most especially in light of the high returns the latter was posting financially. 
 

The PlayStation business loss to AMD was a wake-up call to Intel that forced it to define a new strategy for the gaming industry and the custom chip. At the same time, AMD has only managed to strengthen its position within the gaming console market, which not only produces PlayStation consoles for Sony but also Xbox consoles for Microsoft.

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