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Nvidia set to make 300-400 million from switch sales next year.

K

KojiKnight

Member
RBC Capital Markets analyst Mitch Steves predicts Nvidia’s top line may see a boost of $300 million-$400 million in fiscal 2018 just from sales of the Nintendo Switch, which is powered by Nvdia technology. That’s because the game maker Nintendo (NTDOY) will reportedly double production of its brisk-selling Switch console this year from 8 million units to 16 million.
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https://finance.yahoo.com/news/heres-much-nvidia-will-make-off-nintendo-switch-200925921.html

I know we've all talked about how well the switch has been for Nintendo, but Nvidia is set to make a pretty good penny as well. Whoever it was who was told to get a console win under any circumstance has to be pretty pleased with the results.
 
D

Dystify

Member
Was that 16 million Switch production number confirmed? I only know that Nintendo currently is planning to sell 10 million Switch.
 
G

ggx2ac

Member
Frankfurter said:
So sth. like $20 per console apparently.
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More like $50

“We think the incremental 6-8M units could add $300-400M to the top line (3-4% growth to annual revenue on a $50 ASP),” wrote RBC Capital Markets analyst Mitch Steves in the report.
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Also for anyone wondering when they report their next earnings:

Wall Street analysts are expecting Nvidia to report earnings of $0.66 per share on $1.91 billion in revenues when the chip maker reports quarterly earnings on Tuesday after the markets close.
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S

Skittzo0413

Member
Dystify said:
Was that 16 million Switch production number confirmed? I only know that Nintendo currently is planning to sell 10 million Switch.
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It was reported by the WSJ but never confirmed by Nintendo. Those numbers do add up to me though, 16 million produced with the conservative intent to sell 10 million.
 
T

Trago

Member
CassidyIzABeast said:
AMD salty about that console contract.
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giphy.gif
 
B

Buzzman

Banned
For comparisons sake, AMD had a revenue of $506M from ps4/xbone and some other stuff in the last quarter of 2016.
http://www.anandtech.com/show/11092/amd-announces-q4-2016-earnings


AMD branched into Enterprise, Embedded, and Semi-Custom designs and it has proven to be a strong source of revenue for them. With wins in both the Xbox One and PlayStation 4, AMD continues to be the beneficiary of both of those consoles outselling their predecessors. For Q4, this segment had revenue of $506 million,
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It's hard to know an exact number since a bunch of other stuff is lumped into that category.
 
ethomaz

ethomaz

Banned
I made an estimate (because some guys tried to says X1 costs to Nintendo $100-200) using the size of the X1 and the number of the produced units per wafer that give us a cost of $20-30 per X1 unit to nVidia.

Add the nVidia royalties and profit then you have the price they sell it to Nintendo... $40-50 seems about right.
 
G

ggx2ac

Member
Buzzman said:
For comparisons sake, AMD had a revenue of $506M from ps4/xbone and some other stuff in the last quarter of 2016.
http://www.anandtech.com/show/11092/amd-announces-q4-2016-earnings




It's hard to know an exact number since a bunch of other stuff is lumped into that category.
Click to expand...

For comparison, that is one quarter of revenue you mention for AMD whereas that 8 million Switch shipment estimate giving $400 million to Nvidia in revenue is supposed to be for the whole fiscal year.
 
ethomaz

ethomaz

Banned
Principate said:
How much is that in comparison other console SoC margins.
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It is all based in estimates...

PS4 APU at launch was about $100... XB1 was a bit more expensive... that was in TSMC 28nm. So we can at least estimate the actual PS4's APU in 16nm today is at least half of that... maybe $60-70.

You need to take in mind the PS4's APU size is about 250mm^2 while the X1's size is 121mm^2.

Said that the nVidia and AMD models are different I guess... nVidia sell the chip to Nintendo directly... while AMD sells the project and receives the royalties of each chip produced but Sony/MS choose where to produce them... so it is cheaper the AMD model to Sony/MS than nVidia model to Nintendo.

ggx2ac said:
For comparison, that is one quarter of revenue you mention for AMD whereas that 8 million Switch shipment estimate giving $400 million to Nvidia in revenue is supposed to be for the whole fiscal year.
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The period of time is not the key but the number of units produced... last quarter of 2016 we can take around 13 million APU's for PS4 and XB1 (it is hard to know because we lack XB1 shipment).

The model used by nVidia and AMD are different too... the revenue is bigger for the first that paid the production costs while the revenue for AMD is smallar but Sony/MS paid for the production costs.
 
J

Juice

Member
Good. Nintendo is better off outsourcing more of the lower layer tech stack (from chip design to fab to architecture decisions) to Nvidia and then compensate them well enough that Nvidia is invested in continuously improving the platform as time progresses. If the switch is a hit, the economics of incremental hardware improvements become a lot easier.

My bigger fear when the partnership was announced was that the relationship would sour because it would be such a pittance on Nvidia's books and then the whole platform would stagnate or be another deadend, like the GameCube->Wii U PowerPC
 
LordRaptor

LordRaptor

Member
Juice said:
My bigger fear when the partnership was announced was that the relationship would sour because it would be such a pittance on Nvidia's books and then the whole platform would stagnate or be another deadend, like the GameCube->Wii U PowerPC
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ARM isn't going anywhere anytime soon; its arguably a 'safer bet' for a home device than x86 is.
 
R

rambis

Banned
Kenzodielocke said:
http://wccftech.com/nvidia-golden-days-consoles-over-other-ways/
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LMAO
https://www.gamespot.com/articles/ps4-not-worth-the-cost-says-nvidia/1100-6405300/
Nvidia passed on its hardware being used in the PlayStation 4 due to the "opportunity cost."


"I'm sure there was a negotiation that went on," Tony Tamasi, Senior VP of content and technology at Nvidia told GameSpot, "and we came to the conclusion that we didn't want to do the business at the price those guys were willing to pay."
"Having been through the original Xbox and PS3, we understand the economics of [console development] and the tradeoffs."



"We're building a whole bunch of stuff," continued Tamasi, "and we had to look at console business as an opportunity cost. If we say, did a console, what other piece of our business would we put on hold to chase after that?"
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Nvidia's about face about consoles is the most hilarious thing ever now that they've got a contract. They tried their best to downplay the console business during the PS4/XB1 launch period.
 
llien

llien

Member
AMD semi custom, Q3 2016:$506M
AMD semi custom Q4 2016: $835M

Hm.


PS
Haha, eventually got the salty reference...

PPS
Is 6-8 million estimate for 2018 a bit low an estimate?
 
Toni

Toni

Member
rambis said:
LMAO
https://www.gamespot.com/articles/ps4-not-worth-the-cost-says-nvidia/1100-6405300/


Nvidia's about face about consoles is the most hilarious thing ever now that they've got a contract. They tried there best to downplay the console business during the PS4/XB1 launch period.
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They also didn't foresee consoles making a legit killing off of their online infratructures this gen. Which is a massive increase over last gen.

Nividia wishes they did 4 billion in revenues like Sony did last quarter.
 
C

capitalCORN

Member
Toni said:
They also didn't foresee consoles making a legit killing off of their online infratructures this gen. Which is a massive increase over last gen.

Nividia wishes they did 4 billion in revenues like Sony did last quarter.
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Maybe you should compare them to Microsoft?
http://www.microsoft.com/en-us/Investor/earnings/FY-2017-Q2/press-release-webcast

And Nvidia alone made a quarter of the whole of Sony.
http://techreport.com/news/30507/nv...on-year-profits-in-its-fy-2017-second-quarter

Not to mention CUDA IS the language of compute. Their penetration into brand new markets is off the charts.
 
TAS

TAS

Member
Good. The Nintendo-Nvidia partnership is one of the best things to ever happen and I'm glad both sides are reaping the benefits. The premiere game developer teaming up with the worlds premiere GPU manufacturer. Call it the dream team. ;)
 
T

ThoseDeafMutes

Member
rambis said:
Nvidia's about face about consoles is the most hilarious thing ever now that they've got a contract. They tried there best to downplay the console business during the PS4/XB1 launch period.
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It's quite likely they got a better margin on Switch. They were never unwilling to equip the consoles, but the lack of an x86 soc and their unwillingness to work with razer thin margins made AMD the only logical choice for Microsoft and Sony. They just didn't need the revenue stream as badly as AMD did. They weren't willing to go as low as AMD was to win the contract. NVidia has been highly profitable without console contracts, which is why all the "NVidia salty" memes wound up being self parodies after the fact.
 
ethomaz

ethomaz

Banned
rambis said:
LMAO
https://www.gamespot.com/articles/ps4-not-worth-the-cost-says-nvidia/1100-6405300/


Nvidia's about face about consoles is the most hilarious thing ever now that they've got a contract. They tried their best to downplay the console business during the PS4/XB1 launch period.
Click to expand...
nVidia contract with Nintendo is better (give them more profit) than the console contract from AMD.
They indeed found console contract not good for them... and the new portable contract (Switch) was better.

Their words in that article are still true for them.
 
Z

zelas

Member
Skittzo0413 said:
It was reported by the WSJ but never confirmed by Nintendo. Those numbers do add up to me though, 16 million produced with the conservative intent to sell 10 million.
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Nintendo did state they plan to ship 10 million in their results briefing by March 2018. The question is indeed how many do they actually plan to produce.
 
L

Lord Error

Insane For Sony
One nice byproduct of nVidia being behind the switch tech is that they finally had to stop awkwardly talking about the console doom & gloom.
 
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