Will PC, Xbox One and PlayStation 4 Kill Power Architecture?

In 2007 the Power Architecture-based embedded processor market peaked at almost $4 billion (USD). Designed into the Microsoft Xbox 360, the Nintendo Wii and Sony's PlayStation 3, Power Architecture revenues grew strongly in 2007 as production of the last-generation consoles ramped up. Then came the economic downturn. Production growth slowed but the year-on-year price erosion of the processors continued, so revenues for Power Architecture in games consoles steadily declined.

As far as the next-generation games consoles are concerned, Power Architecture's best days are long gone. Recently revealed specifications show that both the Xbox One and PlayStation 4 have changed to x86-based processors with integrated graphics processing unit. Combining a step up the performance curve with significantly reduced development timescales and costs for games developers (who historically have had to support both PCs and consoles), both Microsoft and Sony have adopted a “PC-lite” architecture for the next-generation of consoles. This means that Nintendo’s Wii U is the only console in the new generation not based on the x86 architecture. This divide splits the gaming market in two; PC, Xbox One and PlayStation 4 in the x86 camp; Wii U alone with Power Architecture.

With the original introduction of Nintendo's Wii in 2006, its motion sensitive controllers and family fun gaming style were a significant change from gaming conventions and as a result sales of the Wii soared. However, many of these features have since become supported by games on tablets and smartphones. In Semicast’s opinion, the Wii U is now architecturally isolated and runs the risk of some game developers not supporting it at all. Nintendo's Wii U is also exposed to the rising complexity of games on tablets and smartphones, where game prices are around 49 cents, not 49 dollars. Although extreme, it is possible that the Wii U could force Nintendo to exit the console market (as Sega did back in 2001).

Freescale is currently still the largest supplier of Power Architecture-based MCUs and embedded MPUs, with most of these supporting applications in the automotive, communications and industrial markets. With Freescale steadily embracing the ARM architecture in all of these markets, it is surely only a matter of time before Freescale succumbs to market pressure and slows development of its Power Architecture lines.

##IMAGE_2_R##Colin Barnden, Principal Analyst at Semicast Research and study author, commented “ARM is already the leading processor architecture in both the automotive and industrial markets, while availability of processors based on the 64-bit Cortex A53 and A57 cores is forecast to establish ARM in the communications infrastructure market, in competition with Power Architecture, MIPS and x86”.

Semicast forecasts the Power Architecture-based embedded processor market to fall to less than USD 2 billion in 2018. ARM and x86 are expected to be the main beneficiaries of Power Architecture’s decline.