Imagination Technologies Group plc Takes Aim at Gaming Consoles

By Markets Fool.com

Imagination Technologies, which supplies graphics processor intellectual property, recently announced the PowerVR GT7900 graphics processing unit. The company said this is a relatively high-end design aimed at "notebooks, micro-servers, and game consoles."

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Investors might wonder, then, whether the GT7900 (and future high-performance Imagination graphics processors) can actually gain traction in gamer consoles.

How does the GT7900 compare with the Xbox One and PlayStation 4?
Today, Advanced Micro Devices supplies the processors into both the Xbox One and the PlayStation 4, which integrate AMD's Radeon graphics designs. According to AnandTech, the graphics processor inside the Xbox One system-on-chip can deliver 1.23 teraflops of single-precision compute performance, while the PlayStation 4 can deliver 1.84 teraflops.

According to Imagination, the GT7900 can deliver up to 1.6 teraflops in FP16 and 0.8 teraflops of FP32 shader performance. The AMD numbers above are "single precision," which suggests FP32. So, in terms of raw shader performance, the current consoles deliver more compute performance than the GT7900 can.

My guess is that a next-generation AMD console chip, built on the same 14/16-nanometer processes Imagination expects the GT7900 to arrive on, would deliver significantly more performance. This is not a knock on Imagination but rather an observation that the company's graphics processors are generally aimed at low-power applications, while AMD's designs are largely targeted at higher-performance/higher-power applications.

What consoles could Imagination go after with the GT7900?
I do not think Imagination has much of a shot of winning a next-generation Xbox or PlayStation with its higher-end IP. AMD has already proven itself a capable vendor of system-on-chip solutions for consoles, and as long as AMD wins the contracts to design the chips for the next Xbox and PlayStation consoles, AMD will very likely use its own graphics IP.

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However, the GT7900 could succeed in portable game consoles along the lines of a Nintendo3DS or a SonyPlayStation Vita. In these applications, Imagination's low-power designs could offer fairly compelling gaming performance.

I could also see this IP doing well in chips aimed at so-called "microconsoles" (such as the Ouya), as well as in set-top boxes.

Imagination also wants to go after notebooks and microservers
Imagination is also aiming for the notebook and microserver markets with the GT7900 IP. The Windows notebook market is dominated by x86 chips from Inteland AMD, which means the GT7900 IP probably will not find its way into those devices.

Just the other day Googletalked up extremely cheap Chromebooks from Haier and Hisense, both powered by low-cost chips from Rockchip. If there proves to be demand for higher-performance Chromebooks, then I could see some chipmakers adopting Imagination's higher-end IP to try to deliver competitive chips into this market.

Finally, Imagination is talking about addressing microservers with the GT7900. But it is not clear what kinds of typical microserver workloads will ultimately value GPU compute performance. Also, to the extent that this market does value GPU compute, Intel, AMD, and Qualcomm(which has said it will enter the server market) all have in-house graphics processor architectures, which could limit Imagination's traction in microservers.

The article Imagination Technologies Group plc Takes Aim at Gaming Consoles originally appeared on Fool.com.

Ashraf Eassa owns shares of Intel and Qualcomm. The Motley Fool recommends Google (A shares), Google (C shares), and Intel. The Motley Fool owns shares of Google (A shares), Google (C shares), and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.