Why AMD Can Win Big With the Ataribox

Advanced Micro Devices (NASDAQ: AMD) had been the go-to supplier of custom processors for video game console majors Sony and Microsoft. But NVIDIA (NASDAQ: NVDA) rained on AMD's parade when Nintendo (NASDAQOTH: NTDOY) decided to use a custom Tegra processor to power its latest Switch console.

Sales figures suggest that Nintendo has hit a home run with the Switch. The console has outsold both the PlayStation 4 and the Xbox One four times in the past six months in the U.S. Meanwhile, Switch sales have been very strong in key console markets such as Japan, selling over 1.5 million in just 26 weeks, a figure that the PS4 took 69 weeks to hit.

Not surprisingly, Nintendo now aims to sell 15 million Switch consoles during its first year as compared to the original expectation for 10 million units. Now, NVIDIA reportedly makes $50 on each Switch console, so it stands to win big with this device in the long run given a potential lifetime production forecast of 40 million units.

Source: Fool.com