AMD Sees a High-Level Exec Defect to the Enemy
In the world of console gaming, there are two graphics choices: Advanced Micro Devices (NYS: AMD) or NVIDIA (NAS: NVDA) . With the current generation of consoles, known as the seventh generation, the primary contenders are the Nintendo (NASDAQOTH: NTDOY.PK) Wii, Sony (NYS: SNE) PlayStation 3, and Microsoft (NAS: MSFT) Xbox 360.
Two out of three of these popular consoles feature AMD graphics: the Xbox 360 and Wii. The odd man out is the PlayStation 3, which uses NVIDIA graphics. The next generation of consoles, the eighth for those keeping score at home, all are expected to carry AMD GPUs. We're talking the Xbox "720," PlayStation 4, and Wii U all built on AMD technology.
That's a big win for AMD, and one man in particular is attributed with playing a key role in scoring those relationships: Bob Feldstein. He was a part of ATI before AMD acquired that company in 2006 and reportedly spearheaded negotiations with console makers, helping secure the spots in the next generation of consoles. Feldstein has now left AMD and defected to chief rival NVIDIA, where he will now become the vice president of technology licensing.
It's worth noting that the next generation of consoles are still in development, and it's a very real possibility that those graphics slots could change before their respective launches. That's a tough blow, considering AMD's core chip business declined 13% last quarter, and now its graphics segment may be put under pressure by the very exec who helped build it.
Game consoles are included in AMD's graphics segment and NVIDIA's consumer products division, and AMD relies on graphics more than NVIDIA does its consumer products.
% of Sales (MRQ)
|AMD graphics||$367 million||26%|
|NVIDIA consumer products||$132.6 million||14%|
Source: SEC filings.
Of course, AMD's core business is PC processors and NVIDIA's PC graphics, but these segments contain the console gaming businesses. If Feldstein can tap his existing relationships with the console makers and poach them for his new employer, AMD might just be waiting for its other shoe -- and operating segment -- to drop.
NVIDIA also has another important burgeoning business in mobile applications processors that could become a major revenue growth driver in the coming years. Read all about the mobile revolution and how NVIDIA is hoping to cash in on it.
The article AMD Sees a High-Level Exec Defect to the Enemy originally appeared on Fool.com.Fool contributorEvan Niuholds no position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns shares of Microsoft and has sold shares of Sony short.Motley Fool newsletter serviceshave recommended buying shares of Microsoft and NVIDIA, writing puts on NVIDIA, and creating a bull call spread position in Microsoft. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days. The Motley Fool has adisclosure policy.
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