It seems Intel was penny-wise but pound-foolish here:
> dispute over how much profit Intel stood to take from each chip sold to the Japanese electronics giant blocked Intel from settling on the price with Sony, according to two of the sources. Instead, rival AMD landed the contract through a competitive bidding process
However, I also wonder if Intel couldn't guarantee backwards compatibility with PS5 games to Sony's satisfaction:
> Console chip designs typically try to ensure compatibility with earlier versions of the system, to allow users to run older games on the new hardware. Moving from AMD, which made the PlayStation 5 chip, to Intel would have risked backwards compatibility, which was a subject of discussion between Intel and Sony engineers and executives, the sources said
If you looked at Intel's recent history, would you trust that they could deliver on cross-platform compatibility?
Honestly, it seems like the same thing that ended up losing them the iPhone back in the 00s. Even if profits might not have been as high as they might have liked, they absolutely needed this regardless to ensure enough used capacity on their foundry division by a third party and to gain experience in working with a customer like this. It would've also potentially secured further wins down the line with Microsoft or eventually the PS7.
Seems awfully short-sighted of Intel when they can least afford it.
I once worked at a FinTech company that spent a lot of time and money worrying about a potential deal with a marquee client. An FP&A report showed that we might lose money at first. We ended up making money from the get-go, but more importantly, no one ever asked;, wait, aren't the main benefits here reputational and don't they exceed the short-term costs and benefits by at least an order of magnitude?
From the outside, it looks like Intel had the same problem. But I don't think we really know what happened here.
> dispute over how much profit Intel stood to take from each chip sold to the Japanese electronics giant blocked Intel from settling on the price with Sony, according to two of the sources. Instead, rival AMD landed the contract through a competitive bidding process
However, I also wonder if Intel couldn't guarantee backwards compatibility with PS5 games to Sony's satisfaction:
> Console chip designs typically try to ensure compatibility with earlier versions of the system, to allow users to run older games on the new hardware. Moving from AMD, which made the PlayStation 5 chip, to Intel would have risked backwards compatibility, which was a subject of discussion between Intel and Sony engineers and executives, the sources said
If you looked at Intel's recent history, would you trust that they could deliver on cross-platform compatibility?