The graphic truth about gaming chips:
Special Report: The graphic truth about gaming chips
by John F. Ince
September 16, 2000
From the October 2000 issue of UPSIDE magazine
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SPECIAL REPORT:
LET THE GAMES BEGIN
Without the silicon chip, nothing we take for granted in the information revolution would have been possible. No software, hardware or Internet. At one time, there was awe and wonder surrounding these miraculously tiny devices.
Today, the silicon chip is even more miraculous, but we're beginning to take it for granted. Before we get too blasé about this new generation of chips for game consoles, let's take a moment to consider what may well be viewed as yet another technological watershed -- the juncture where the chip became strong enough to power not just games, not just Internet connections, but DVD players and a whole host of devices, all for less than $300.
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"Next-generation game consoles will be at the epicenter of the digital revolution."
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We are rapidly approaching with this new generation of chips the holy grail of the gaming industry: photo-realism. "Next-generation game consoles will be at the epicenter of the digital revolution," says Jen-Hsun Huang, president and CEO of Nvidia (NVDA).
Is this just more hype? No. There is something real and significant going on here. It deserves notice. For example, within the first 15 days of the Sony (SNE) PlayStation 2 launch in Japan this spring, a million units sold. And Oct. 26 is being billed as the largest -- and most hyped -- consumer-electronics launch in U.S. history.
There is a reason for the excitement -- and it's inside the millions of units that will fly off store shelves this fall.
Let's also keep in mind what the larger stakes are in this next generation of silicon chips. The possibility is nothing short of an ultimate digital-device convergence. Some analysts figure that the Sony PlayStation 2 is actually a Trojan horse being wheeled into the living rooms: a multipurpose entertainment device. How about a chip so powerful that your wireless phone becomes a game, a game console, or even a DVD player?
But not so fast, Sony. Another mildly competitive guy also has decided to bet the house on his new console made with a 128-bit Nvidia chip. When Bill Gates saw what this new Emotion Engine chip (see Glossary) could do in the PlayStation 2, he decided to respond in kind with a Microsoft (MSFT) console code-named the Xbox. It will be the true clash of the 128-bit chip titans.
Let's ask some of the hard questions and make some predictions. What are the unique strengths and weaknesses of the particular chips for each game console? What are the economic forces driving the industry? Who will be the winners? What is really new and significant about these new chips?
New chip on the block
What's new and significant is the ability do hundreds of millions of graphics calculations per second. What's new is the ability to re-create an artificial universe on a TV screen with a 128-bit chip that retails for $299. What's new is a chip as powerful as what powers the new Power PCs. These reality engines make higher levels of verisimilitude possible and can power a takeoff to another world.
The facial expressions are so true that the name Emotion Engine seems apt. It's the chip that transposes realities by drawing 300,000 polygons per second on the screen. It's the chip that can take care of 50,000 moving images on the screen at the same time. The chips coming off the shelf today are so powerful that "gamers" might mistake what they see on the screen for an actual NFL football game.
Yes, some of this is simply a reiteration of Moore's Law (see Glossary), but it's more than that. The advances in chip technology for game consoles also have to do with a fundamental shift in thinking about chip architecture. The most stunning breakthrough came with a simple but ingenious innovation: Rather than working to improve the performance of one magic chip, work instead with multiple chips. Now there would be a division of labor between chips, with one chip doing the work of on-screen graphics and object manipulation and another chip giving the mandate for communications, security management and other housekeeping functions.
The housekeeper chips (see Glossary) are generally well-known, like the Pentium III in the Xbox or the RPC chip inside the Nintendo console. Because these are popular processors, the game developers know how to work with them. But when a new graphics processor comes along, like the Emotion Engine from Sony, the Gekko (see Glossary) from IBM (IBM)/Nintendo, or the Nvidia from Microsoft's Xbox, it can make game developers scramble. Developers have to understand the special codes for each of those new graphic chips because there is not much commonality between each of the manufacturers' proprietary chips. So developers have to learn almost everything all over again to develop the same title for Sony, Nintendo and Microsoft.
Which all leads to one important rule: "It's the game, stupid." Never try to tell gamers that it's the chip that is the critical ingredient in their hot new consoles. Jon Peddie of Jon Peddie Associates says, "It's like the old real estate joke, ‘'Content, content, content.' It's whoever has the best and most content." Gamers are into the game, not the chip. Take this notion to its logical conclusion, and we run into an intriguing possibility: Perhaps the winner here will not be the one with the most hype and the most impressive chip.
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The chips do not drive profitability in the gaming industry.
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But let's step back even further. While the chip may not create the ultimate consumer buzz, it does drive strategic decisions in the industry. It was Sony's technological breakthrough with the Emotion Engine that accelerated (or perhaps even spurred) the creation of the Xbox. Sony's PlayStation 2 constituted such a serious threat to Microsoft's existing PC games that Microsoft felt it had to respond. Remember, Microsoft only started developing the Xbox after the PlayStation 2 was announced. It was a competitive threat it couldn't ignore.
But let's also keep things in the larger economic perspective. The chips do not drive profitability in the gaming industry. With the cost of the chip subsidized largely by sales of the games, some analysts question whether Sony really wants to sell that many units of the PlayStation 2. Though historic buzz and PR have supported it, Sony has hardly had to advertise it. People just line up to buy them.
With boxes sold at or below cost, each one sold is a drain on profitability. Yes, Sony wants to establish PlayStation 2 as the dominant game platform, but it makes its money on the sales of games, not consoles. So although Sony anticipates selling 3 million PlayStation 2 units in the United States in the first five months, its real passion for profitability comes from selling games. That's where the economics turn in its favor.
Don't underestimate the chip
What are the economics for the silicon chips in the game consoles? On average, the chips (housekeeping, microprocessor and graphics chips combined) generally constitute half of the value of the game console, with some analysts suggesting it might be as high as 60 percent. That percentage starts higher and declines over time. For example, the first PlayStation 2 shipped in Japan this March for the U.S. equivalent of $424 and will sell in the United States this fall for $299. The chips for the first 100,000 Japanese consoles probably cost Sony in excess of $1,000 each. This summer's chips probably will cost Sony about $400. By Christmas, with Sony having sold 3 million units in Japan and 2 million in the United States, per-chip cost will be down to $90 of the $299 console price.
Why the precipitous decline in chip cost? Richard Doherty, director of Envisioneering, says, "The chips ramp up in yield. The Emotion Engine is a very complex chip. It has more transistors on it than a Pentium III. While Sony would never release these figures, they may have gotten one chip in six to work out of their first batch last winter. Their yield is probably half of the chips now, and by Christmas, they'll probably be up to 8 out of 10."
But with the current shortage of chips worldwide for almost everything outside of the PC space, chip economics could shift after six months or so. With global demand soaring for personal digital assistants (PDAs), DVDs and video game consoles, the situation is being exacerbated by a practice known as double ordering (see Glossary). People order displays from two manufacturers and pay only for the one that arrives first. With more people double ordering, it becomes more difficult to determine what is really happening in global chip markets. Today, it's a serious problem. No one knows for sure when supply and demand will come into greater balance.
Now, let's take a look inside these reality engines and the four main chip manufacturers.
Nintendo/IBM
It was the Nintendo 64-bit system that established a new level of performance in game consoles with regard to 3-D graphics ability. Peddie says, "That's what generated a lot of the initial excitement in this industry. NEC had been and still is the fabricator of chips for those Nintendo machines."
Sony PlayStation draft 1
For the moment, the most impressive chip on the market is Sony's Emotion Engine in PlayStation 2. There is nothing like it. Until Nintendo ships in Japan in a few months and in the United States next year, Sony will be in a class by itself. The Emotion Engine is a full 128-bit CPU integrated on a single-chip large-scale integration (LSI), together with state-of-the-art 0.18-micron processor technology. The new CPU incorporates two 64-bit integer units -- with a 128-bit single instruction multiple data (SIMD) multimedia command unit, three independent floating-point vector-calculation units, an MPEG 2 decoder circuit, and high-performance direct memory access (DMA) controllers -- onto one silicon chip. It is a supercomputer with floating-point calculation performance of 6.2 billion floating-point operations per second (GigaFLOPS, or GFLOPS). Peak calculation performance is 66 million polygons per second.
Microsoft/Nvidia
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When dealing with any Microsoft product launch, it's a good idea to separate hype from substance.
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Most analysts say the Xbox holds tremendous promise. Game developers and rivals alike take it very seriously. Larry Probst, chairman and CEO of Electronic Arts (ERTS), says, "We view Microsoft's entry into the console business as an important event."
Doherty of Envisioneering says, "This is a system that literally can't fail at this point. It is guaranteed to be a stable and high-performance platform, and when it ships in late 2001, it should be even higher-performance than a $3,000 PC at that time."
When dealing with any Microsoft product launch, it's a good idea to separate hype from substance. In the case of the Xbox, it appears there is both. According to preliminary reports, Microsoft's hefty Xbox marketing budget may be well spent. The Nvidia partnership gives Microsoft credibility in its new arena. Nvidia has been delivering high-performance graphics chips for PCs for the past five years. Nvidia beat out ATI to win the Xbox contract for many reasons, not the least of which is the credibility it brings to Microsoft with the Xbox.
The Xbox processors also will support multitasking (only one application at a time) and nongaming applications. Like Sony's PlayStation 2, the Xbox will be able to play DVD movies. It may also have add-on features, such as an optional modem. Whether these applications will be important to the product's ultimate success is unknown.
The core of the Xbox runs on a 300MHz graphics processor that can process 300 million polygons per second if the polygons are less than one pixel in size. The Nvidia NV25 core platform will support 3-D graphics with more than eight to 10 times the performance of today's best PC cards. Its unified-memory architecture will significantly reduce operating-system overhead. Nvidia is still the graphics engine on the highest percentage of the highest-performance PCs out there.
If Microsoft made these claims alone, its claims might be suspect, but in combination with Nvidia, there is a high degree of confidence that it will deliver a system that is even more powerful than the PlayStation 2. However, whether it will be more powerful than the Nintendo Dolphin remains to be seen.
One reason that many people are excited about the Xbox is that it will enable developers to hedge their bets by delivering special Xbox versions of their existing catalogs. Why? The Xbox has one important and unique advantage over the others. Because it uses the Pentium III as its main processor, it can piggyback immediately off all the PC games that have been developed. Firms that want to gain the largest audience would normally develop both a PC and a console version. But in this case, they can share 90-plus percent of the DNA (code) for both games by putting special Nvidia code in the Xbox version. They can develop a game that looks the same, although it may not perform the same, on different-speed machines.
Will Microsoft's breakup affect the Xbox? Perhaps in 18 months, but right now, few, if any, game developers are concerned about that.
May the best chip win
On the surface, who are the early favorites to lead in the new generation of game consoles? For what's available today, the Sony PlayStation 2 is the most impressive. But, says Doherty of Envisioneering, "Microsoft has done a very good job of demonstrating what's coming. On the basis of disclosure, the Microsoft Xbox is most impressive. But for secret buzz, the Nintendo Dolphin system seems to have the most going for it."
Given the fact that IBM makes the smallest, fastest chips on Earth, the Nintendo Dolphin may yet win this thing. But there's one thing of which we can be sure: No one knows for sure until the products hit the market and the consumers cast their votes.
Glossary
Trying to understand the technology of silicon chips can be a daunting task. To simplify the process, we've included a brief glossary of commonly used terms:
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128-bit console:
The number of bits is the most understood benchmark of speed. The biggest bottleneck or limitation on all game consoles is how quickly you can access information from the microprocessor and the memory. More bits means more and wider lanes to move traffic, not unlike on a freeway with automobile traffic. A 128-bit processor is not always double the speed of a 64-bit graphic system. But the more bits that are available, the faster the performance. It is only one measure of performance and not necessarily the ultimate measure. Other important measures of performance are polygons per second and megapixels per second.
Cray computer:
This is a supercomputer level for visualization into a TV-quality image. It is so powerful that it's only limited by the resolution and the size of the TV screen. What's on TV can look as good as the special effects in "Beauty and the Beast." A Cray computer won't serve as a movie theater screen but is sufficient for a home TV. Cray Research is actually a division of Silicon Graphics, but the term is used generically. It is named after Seymour Cray, the inventor.
DNA:
The code that game developers use. With the new generation of graphics chips, there is little commonality in DNA from one system to another. It is unlikely that such commonalities will develop anytime soon because the proprietary code of each system is the "secret sauce" that developers believe gives them a competitive advantage.
Double ordering:
A common practice in chip manufacturing during periods of tight supply. Double ordering further drives up chip prices and places greater strain on demand. During this current crunch of non-PC chips, double ordering has become endemic to the industry.
Emotion Engine:
The new Sony PlayStation 2 chip, so called because it achieves a stunning quality of photo-realism. A game player can begin to feel the emotions of the characters by watching subtle movements in facial expressions--turning from a smile to a scowl. It enables a kid with a joystick to do what a professional Disney (DIS) or Pixar (PIXR) animator might do by handcrafting each frame for a movie.
Gamer:
The ultra-serious game player. Devotes more than 40 hours per week to this enterprise--as opposed to the casual game player, who puts in a mere 10 to 20 hours per week. The gamer clearly gets a buzz from the more addictive aspects of the medium. Sega (and other game manufacturers) employs nearly 50 serious gamers to road-test beta versions of all new games.
Housekeeping microprocessor:
One of the two primary chips in a game console. One of the breakthroughs in chip architecture in the past five years was to put multiple chips in game consoles: a graphics chip and another "housekeeper" chip that performs communications functions, security and other tasks.
Gekko chip:
New graphics chip manufactured by IBM.
Power PC processor:
Processor architecture recently selected by Nintendo for its next-generation Dolphin console under a $1 billion long-term agreement with IBM. It is one of several types of possible microprocessor architectures in the embedded space. Other possible types of architecture are MIPS, ARM and Hitachi SH.
Moore's Law:
Fundamental exponential prediction named after Gordon Moore, the co-founder of Intel (INTL), in an article published in Electronics magazine in 1965. Moore's Law held that the number of circuits on a silicon chip would double every year. Moore later revised his prediction to 18 to 24 months. Others have expanded the concept to say that the cost of silicon chips would be reduced by half every 18 months. Moore's prediction has been remarkably accurate, but in a recent issue of Time magazine, Moore acknowledged that there are real material limits to his law and wrote that, "In the next two or three generations, it may slow down to doubling every five years."
Reality engine:
A generic term for the microprocessor system in a game console that can produce photo-realistic worlds, characters and facial expressions. The term goes back to the 1960s, but it has just come into wider usage in the consumer markets in the past few years.
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