Why Nintendo isn’t likely to use AMD’s top Zen chip design — and why Microsoft will

Advanced Micro Devices revealed its schedule for rolling out Zen microprocessor chips today, and it disclosed a few tea leaves that are crucial for figuring out the moves that Nintendo and Microsoft will make in the video game console wars.

In short, AMD’s schedule for the release of its Zen high-end processor chips tells me that it will be coming out too early for Nintendo’s NX game machine, which the Japanese company has said will debut in March 2017. Microsoft, on the other hand, will debut its Project Scorpio game console in the holidays of 2017. That gives it the right timing and opportunity to make use of the Zen technology in a new Microsoft game console.

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This is my own speculation, based on reading signs instead of any inside information. But some smart folks agree with some of the conclusions I’ve drawn. And one knowledgeable source said I was headed in the right direction.

It takes a bit of explanation about chips and game console history, so please bear with me.

First, AMD has a reason for making the main processing chips for all of the game console manufacturers. Years ago, when AMD merged with graphics chip maker ATI Technologies, it pledged to build accelerated processing units, or APUs. These were chips that combined processor and graphics functions on the same piece of silicon. That made the chips more affordable, as you get a cheaper solution when you combine two chips into one. And cheaper solutions are important for game consoles, which sell for $300 to $500 (at least when they first hit the market), in contrast to $1,600 PCs.

So in the last round of console launches, AMD swept up. Its APUs are in Nintendo’s Wii U, Microsoft’s Xbox One, and Sony’s PlayStation 4. The APUs are fairly powerful chips, but they have the benefit of running x86 software (same as the PC) and have strong graphics performance. Intel, by contrast, hasn’t put as much priority into the graphics power of its own solutions.

So when it comes to future game machines, AMD is the favorite. And AMD chief executive Lisa Su says that the company has more than one new “semi-custom” chip coming. Semi-custom is AMD’s parlance for game console chips, which are distinct version of an existing PC standard APU. AMD has confirmed its chips are in Microsoft’s Xbox One S (a thinner, 4K version of the Xbox One) and in Project Scorpio as well.

Last night, Su said that AMD will debut its first Zen products in the first half of next year. Zen server chips will arrive in the second half of 2017. Those Zen chips are 8-core processors that are central processing units, not APUs. They have no on-board graphics. To work in a PC, the Zen processors would have to be paired with a separate graphics chip. That’s OK for a PC, but not for a game console.

Now Zen is a really big chip. Big chips are expensive. Small ones are cheaper. There are a lot of reasons for this. A big chip has a greater risk of having a tiny microscopic flaw that could kill the entire thing. Smaller chips are less likely to have such a killer flaw. On top of that, smaller chips use less material, and bigger chips use more. So bigger chips cost more money. You can’t put lots of huge chips into game consoles, where space is very tight.

If AMD tried to make an APU with Zen, it would have to really strip down the capabilities of the CPU, or it would have to make a huge chip that combined both the Zen cores and the graphics processor. At the outset of a new chip generation, before manufacturing can shrink the size of a chip, it’s just too expensive to make an APU. Over time, chip makers can shift to new manufacturing technologies, which allow them to miniaturize a chip, making it cheap.

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By shrinking the size of a chip, a console maker benefits with lower costs, lower cooling requirements, and a smaller footprint. When you see console makers launch a smaller and cheaper version of a console, like Microsoft’s Xbox One S, it is because the chip maker has been able to shrink the primary chip. For instance, Sony once said that over the lifecycle of the original PlayStation, the size of the main processor took up just 13 percent of the area that the original chip did.

If AMD is just coming out with a Zen CPU early next year, it won’t be able to do a Zen APU. And since Nintendo is coming out in March, its console is coming too early to make use of Zen. Nintendo could ask AMD to build an APU with older AMD technology, such as a previous generation CPU, coupled with AMD’s new Polaris graphics designs, said Michael Miller, chief information officer at Ziff Brothers Investments, in an interview.

But it wouldn’t be a really high-end chip. That’s consistent with Nintendo’s hardware design philosophy. It usually opts for inexpensive hardware that consumers can afford, using older technology that doesn’t push 3D graphics as far as it can go. Or Nintendo might even do something crazy again, as it did with the Wii, or do something in the portable realm, as some have speculated.

“That’s a very good assumption,” said Patrick Moorhead, analyst at Moor Insights & Strategy, in an interview after I painted this Nintendo scenario for him.

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By contrast, Microsoft usually goes for the highest-end possible when it comes to 3D graphics for its Xbox machines. The fact that Microsoft is coming out later with its own new game console — late in 2017 — means that it could have a chance to use the Zen technology. By jumping to Zen APUs, Microsoft could leapfrog Nintendo and satisfy its audience of hardcore gamers who favor high-end graphics. By the fall of 2017, AMD will have the ability to create new, more efficient, and cheaper Zen-based APUs. And that should attractive to Microsoft. I wouldn’t expect AMD to throw in the entirety of the Zen design into a console APU, but some less expensive variation of that is very likely.

The wild card here is Sony, which is likely using an AMD chip in its Neo system — a 4K version of the PlayStation 4 that debuts in early September. Sony is the market leader in game consoles, so it probably doesn’t want to launch a new system real soon. But it too will likely use a high-end Zen APU.

So here’s my prediction. Nintendo will debut a low-end system with an AMD APU that uses Polaris graphics. Microsoft will follow with a Zen-based semi-custom APU in Project Scorpio in the fall of 2017. And Sony will debut a new system last of all, after its rivals shoot first.

As for Su, the only vague clue she dropped was that “the best is yet to come.”

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