IBM's Dominance in Next-Generation Consoles

Strategic Insights -

As the video-game console market heats up, Microsoft's Xbox 360 Premium, set to hit the market soon, features IBM silicon as a crucial component, driving cost and functionality. This is not an isolated case; IBM's chips will also power two other next-generation consoles, solidifying its position in the market. The custom microprocessor designed and co-manufactured by IBM for the Xbox 360 is a triple-core PowerPC, running at 3.2GHz and costing a significant US$106, accounting for 20.2% of the total BOM cost.

Key Takeaways:

  • IBM silicon is a key factor driving the cost and functionality of the Xbox 360 Premium console, with the custom microprocessor accounting for 20.2% of the total BOM cost.
  • The microprocessor, a triple-core PowerPC, runs at 3.2GHz and costs US$106.
  • IBM chips are also at the heart of two other next-generation game consoles set to hit the market in the coming months.
  • The Xbox 360's BOM cost reaches US$525, well above its retail price of US$399.
  • The Graphics Processing Unit (GPU), designed by ATI Technologies for groundbreaking High-Definition (HD) graphics, costs an estimated US$141, including embedded DRAM from NEC.
  • The total cost of other key semiconductors in the Xbox 360, including the memory and a Southbridge I/O controller, amounts to an estimated US$340 per console.

Statistics:

  • 20.2%: The percentage of the total BOM cost for the Xbox 360 Premium accounted for by the custom microprocessor designed and co-manufactured by IBM.
  • US$106: The cost of the custom microprocessor designed and co-manufactured by IBM for the Xbox 360.
  • 3.2GHz: The frequency at which the custom microprocessor runs.
  • US$525: The total BOM cost for the Xbox 360 Premium.
  • US$399: The retail price of the Xbox 360 Premium.
  • US$141: The estimated cost of the Graphics Processing Unit (GPU) designed by ATI Technologies for the Xbox 360.
  • US$340: The estimated total cost of other key semiconductors in the Xbox 360.

Sources:

  • iSuppli Corp's Teardown Analysis Service
  • [Release Date: November 23, 2006]
  • SOURCE: iSuppli Corporation
  • CONTACT: Jonathan Cassell, Editorial Director and Manager, Public Relations of iSuppli Corporation, +1-408-654-1714
  • Web site: http://www.isuppli.com/news/xbox