AMD's HD GPU for Nintendo's Wii U - Analyst Blog
23 11월 2012 - 10:45PM
Zacks
Advanced Micro Devices
Inc. (AMD) announced that it is supplying custom AMD
Radeon HD GPUs to Nintendo's (NTDOY)
newly-launched Wii U home consoles. This custom graphic processing
unit (GPU) will enable Wii U to support high-definition (HD) video
for games.
The Wii U is Nintendo’s first
offering with HD graphics. Moreover, this is the first console
upgrade by Nintendo in six years since the release of Wii. Gamers
appear enthusiastic about the new console, as evident from the fact
that Wii U is already sold out in many U.S. stores. Research firm
IHS is also optimistic, expecting Nintendo to sell 3.5 million Wii
Us in the U.S. this year. Obviously, the success of the Wii U will
benefit AMD, which may compensate for its recent poor showing
versus Intel (INTC). AMD and
NVIDIA (NVDA) are the main contenders for discrete
graphics sockets, so this may be considered a key win for AMD.
Nintendo launched the AMD-powered
gaming consoles just before the holiday season. This makes sense,
as the holiday season is usually the time when demand goes up.
Sony Corp.’s (SNE) PlayStation leads the global
console market with 38.8% market share. It is followed by
Microsoft’s (MSFT) Xbox 360 with 34.9% market
share and Nintendo with 26.3% share.
The gaming hardware market is
currently reeling under competitive pressure from emerging social
network sites and competing hardware platforms such as smartphones
and tablets. Gamers are switching to these platforms or devices as
they also provide free games. Gaming apps are also providing
various fun-filled and thrilling games, which are successfully
enticing gamers.
A study conducted by DFC
Intelligence suggests that the global gaming market is expected to
increase from $67.0 billion in 2012 to $82.0 billion in 2017.
Further, IDC is expecting that there will be 257 million active
consoles worldwide by 2015. These estimates suggest that there are
opportunities for gaming companies to increase their stakes.
AMD’s revenues in the third quarter
came in at $1.27 billion, down 10.2% sequentially and 24.9% year
over year, more or less in line with its revised guidance of a 10%
sequential decline (at the mid-point). Revenues were also in line
with consensus expectations of $1.28 billion. The Graphics business
generated 27% of its sales and was down 6.8% sequentially and 15.1%
from the year-ago quarter.
AMD’s shares currently carry a
Zacks #5 Rank, implying a Strong Sell rating. Nintendo and Sony
carry a Zacks #2 Rank, implying a Buy rating in the short term.
Microsoft carries a Zacks #3 Rank, implying a short-term Hold
rating.
ADV MICRO DEV (AMD): Free Stock Analysis Report
INTEL CORP (INTC): Free Stock Analysis Report
MICROSOFT CORP (MSFT): Free Stock Analysis Report
(NTDOY): ETF Research Reports
NVIDIA CORP (NVDA): Free Stock Analysis Report
SONY CORP ADR (SNE): Free Stock Analysis Report
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