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There is a new rumor going around that says that Microsoft may be in talks or have an interest in buying AMD. Acquiring AMD would cost Microsoft roughly $1.8 billion and the company has $95 billion in cash. So it would be like buying a McDonalds burger for the tech giant. In fact, current value of AMD is three times lower than the company paid for ATI Technologies in 2006.
Analysts estimate that Microsoft pays around $100 for every Xbox One system-on-chip to AMD. Life-to-date sales of Xbox One are around are around 12.6 million units, which means that Microsoft has already paid AMD around $1.26 billion for Xbox One chips. The acquisition of AMD could save it around a billion per year on Xbox One chips alone. It the company develops appropriate chips for smartphones and tablets, Microsoft’s savings could be even higher.
The battle for video game console space is very strong. If Microsoft bought AMD, then Sony would be faced with a bad set of choices: put money in Microsoft’s pocket every time it sells a PlayStation, or try to create an entirely new platform by using technologies from Intel, Nvidia, ARM or Imagination Technologies.
Since game consoles is an important business for Microsoft, the company naturally wants to make sure that its technology provider does not go bankrupt or is acquired by a competitor. For example, if Samsung takes over AMD and builds-in its APUs into its TVs, it will automatically become a major player in the market of video games.
Source: Techradar,Kitguru
