I think they also totally own the console space, don't they? The next-gen consoles from both Sony and Microsoft are based on custom AMD cpu/gpu combos.

Nintendo switch uses NVIDIA, but yes AMD is the provider for Microsoft and Sony.

yes, I'd forgot about that. Current gen and next gen are both AMD silicon.

The lowest bidder owns the console space. It's not a good business, it's a bit of cash flow.

Disclaimer that I really know nothing about these kinds of deals.

I understand that has historically been the case, but AMD is in a pretty good negotiating position right now, being effectively the only company that can provide what they bring to the table.

* a SoC with integrated CPU and GPU

* with high performance and decent power consumption

* and great synergy with the desktop x86 platform, in terms of developer knowledge, available tooling, and ISA compatibility with older games

I wouldn't be surprised if AMD is making a decent respectable margin this time around. And if not, what they most certainly did get, was a bunch of free R&D money for developing ray-tracing technology for the consoles, which they can now leverage through their entire portfolio.

The real benefit of owning the console space isn't money, it's forcing all the console developers to develop specifically for your hardware. If you want to eke out all the performance on Xbone or PS4, you must take full advantage of AMD's CPU/GPU architecture.

The complaint was that AMD was insignificant, not that it's low margin which is a perfectly acceptable business strategy.

As dralley mentioned. AMD is actually one of the few businesses with both strong CPU and GPU expertise. Building a console with any other company would require buying the CPU and GPU from two different companies. Intel would refuse and ARM CPUs including the ones Nvidia designed are not powerful enough, so really AMD CPU+Nvidia GPU is the only alternative to AMD CPU+AMD GPU but there is absolutely no reason for AMD to collaborate with Nvidia. The truth is that AMD is the only one that can serve this market.