One's first thought is the answer must be that this ship is rich and its captain is willing to pay excessive sums to convince these masters of the sea to take the sail. Then again, when one considers the ship is Advanced Micro Devices (AMD), one may reconsider that basis. AMD has lost money and market share at a severe and devastating rate. It maintains a cash balance which investing bears will argue teeters upon bankruptcy. Yet some of the most brilliant minds of the technological world continue to partner with AMD. They knowingly and willingly agree to take sail upon a rickety old ship headed south, on a path set against the industry current; that current being a tumultuous and deteriorating PC industry.
Who are the Masters of Industry joining AMD these days?
Below are the names and press releases announcing the new leaders of AMD.
John Gustofson: AMD hires Chief Product Architect John Gustofson!
Raja Koduri: AMD brings on Visual Computing Expert Raja Koduri!
Why does it matter?
AMD is currently in position to provide the brain, APU or GPU, for all 3 major game consoles. The Big 3 are the Nintendo (OTCPK:NTDOY) Wii U and soon to be Sony (NYSE:SNE) PS4 and Microsoft (NASDAQ:MSFT) Xbox One, coming late 2013. The bears will argue that the gaming industry is dying and they are supported with factual data provided by statista, or basically any other statistical figure that can be derived from the recent history of game console sales. The numbers are revealing and factual; however, when one considers that a new Xbox or PlayStation has not been released in almost 7 years (11/2005- XBOX 360: 11/2006- PlayStation 3), one may conclude that we are at a bottom of a cyclical industry trend inherently correlated to the availability of new product.
The products to be offered are very different and far more capable than legacy items. We should be reminded that the game console of today is a multimedia device, providing streaming access to the internet, broadcast television, movies, video phone calls, facial and audio recognition and whatever else their nimble minds have contrived. All of this on your best TV! Further, if one was to peruse the available internet forums which lean toward technology and programming, there appears to be a strong user base which contends that a common architecture provided by one company, AMD, could result in programming efficiencies for game developers. This could make it easier for talented developers to create new, fascinating, innovative games for these game consoles. If this happens they posit games may eventually run smoother and faster on AMD-based systems; consoles, OEM GPUs and OEM APUs. This in turn may enhance the appeal of the products offered. The gaming industry extends well beyond the console and if game design efficiencies are achieved, AMD may benefit. Through diversification, AMD has successfully limited its exposure to the current pressures of the declining PC market.
What can AMD leverage?
The gaming industry! Never in history has one company provided the entire gambit of major console manufacturers their primary component. While each may be different in some small way, there will be inherent and fundamental similarities which will afford AMD the ability to mass manufacture these components, resulting in further cost efficiencies that are yet to be seen. These efficiencies may be further leveraged as they continue to develop and distribute products targeting mobile multimedia devices, such as the smart phone and tablet.
How can AMD execute?
Through talent. I will not speculate on how these human assets will be deployed. I do however wonder what these new, exceptional, intangible assets may contribute. They bring exemplary past performance and execution, creating cutting edge, industry-leading technology. What benefits can be derived from their contributions to AMD's collective efforts? AMD has talent, a market position as a globally recognized CPU duopoly with Intel (NASDAQ:INTC) and GPU duopoly with NIVIDIA (NASDAQ:NVDA). AMD will soon be a game console monopoly. These entertainment systems will provide access to media far beyond those of the past. What opportunities can be derived from this?
I wonder why did some of the industry's best join AMD? Are stars beginning to align?
When stars align constellations can be seen, recorded, recognized and revered.