[paulmd]

What I'm saying is that the final sale price isn't the only relevant number here - Sony and MS are paying to develop the graphics architecture in the first place. That's revenue on the frontend that helps develop the chips in the first place. The B2B sales of the console chips that result are lower-margin than the dGPU sales into the broader consumer market, but, it's hundreds of millions of dollars of R&D money that AMD doesn't have to find elsewhere a half decade before the product goes to market. That money has a lot of time-value, because it's available now, not 5 years and 10 billion dollars from now.

Early VC funding rounds are way less than you'll see when your product goes to market too. Applying your accounting philosophy, a couple million bucks surely must be insignificant compared to billions of dollars of sales revenue we'll see later, right? And they want how much equity? What a terrible deal.

Except for the part where you fold years before you get to "later", of course.

And that was a very, very, very real concern with AMD. They were right on the edge for years and years during the Bulldozer years, Ryzen was very much a last-chance move for them and they were obviously still scraping bottom for the first couple years even then. There are numerous factors that all aligned to keep them alive - they would not have been alive without Intel misstepping on 14nm (the early days were very bad) and then 10nm, they would not have been alive without Apple writing huge R&D checks to advance TSMC 7nm and 5nm far enough ahead of the market that GloFo bowed out of the game, they would not have been alive without consoles keeping the lights on while they spent every penny on Zen R&D, and they would not have been alive without their interconnect turning all their IPs into legos and allowing them to break and scale them.

Things were really, really, really touch-and-go for AMD in 2016/2017/2018. I figured they were going under. I have no doubt that console R&D money (along with those other factors) was instrumental in keeping the lights on at RTG.