Developers Discontent With PS3 Development Tools

[Powderkeg]

Concealing it would be near impossible. You would have to "cook the books" which is very illegal.

What someone (I'm too lazy) would have to do is look through the quarterly statements from early 2002 on. They do show total expenses in R&D, and they do show generally where their money is coming from. You would want to look for the quarter where they had a significant increase in R&D expenses and an increase in non-sales related earnings either in the same quarter or the quarter just prior to the R&D.

R&D expenses are the most telling factor. Chips are expensive to R&D and the more customized the chip the more it costs. With just a quick glance I noticed that R&D expenses between July 2002 and July 2003 only increased by $7,000. Taking inflation into account I think it's safe to say they didn't start work on a new chipset seperate from their normal products in that time frame so the actual work on RSX started less than 2 years before it was introduced. (Unless it was such a minor change from a normal G70 that $7000 spread over 3 months covered all extra R&D costs that RSX required)

 

[Qroach]

I maintain that a deal with Sony could have flown under the radar

Certainly a deal could have been discussed, however without a contract signed and payment for any work invovled, Nvidia wouldn't be able to throw more than a few employees on any project they started with sony. For certain, you don't think Nvidia worked for free over the course of that (claimed) two years on a PS3 GPU? That wouldn't be logical.

IMO that simply means they had very little invovlement with PS3 up until the time sony dumped toshiba's graphics chip (again that wasn't 2 years before the sony/nvidia annoucement).

 

[Carl B]

Certainly a deal could have been discussed, however without a contract signed and payment for any work invovled, Nvidia wouldn't be able to throw more than a few employees on any project they started with sony. For certain, you don't think Nvidia worked for free over the course of that (claimed) two years on a PS3 GPU? That wouldn't be logical.

IMO that simply means they had very little invovlement with PS3 up until the time sony dumped toshiba's graphics chip (again that wasn't 2 years before the sony/nvidia annoucement).

QRoach I maintain what I maintain. But you can join us in the search if you want to prove your case one way or the other. I mean, certainly the R&D for RSX has begun by now, right? And a contract signed? The first objective then is to see if the proxy from that quarter discusses this development at length.

@Powderkeg: When you say $7,000... you mean $7 million right? For someone who seems to be talking highly about his own abilities to read financials, I'm wondering is you forget that all amounts are in thousands, such that $7,000 = $7 million.

 

[Powderkeg]

I can't see in there, in a brief look and not detailed read, any reference to customers and specific activities. eg. In the legal 'we are facing several patent infrigment procedures' they don't mention what patents and with what companies. In breakdown of of received payments we surely still wouldn't know who the payment came from and for what.

You don't need to know specifics. You need only look for telltale signs with no other explaination.

A highly customized chip seperate from their normal product cycle would require a significant increase in R&D costs. That would indicate when work began.

Then look for a sharp increase in their Accounts Receivable income with virtually no change to their Inventory stock. That would give a good clue as to when someone gave them a lot of money without buying any of their current products.

Nvidia isn't producing a large quantity of highly customized chips. They only have 1 customer of such chips that I know of, so there wouldn't be very many other explainations for a large increase in income with no sales and a large increase in R&D expenses shortly after.

 

[one]

Every company does proactive R&D for potential markets.

My crazy theory: While Toshiba was preparing a GPU, SCE, that was impressed by Xbox 1 GPU then, asked NVIDIA to do a tech presentation for the design competition of PS3 GPU. NVIDIA presented the outcome of the R&D for Xbox 2 GPU. Later when it became clear that Toshiba's GPU couldn't match NVIDIA's solution, SCE adopted NVIDIA GPU.

 

[Powderkeg]

@Powderkeg: When you say $7,000... you mean $7 million right? For someone who seems to be talking highly about his own abilities to read financials, I'm wondering is you forget that all amounts are in thousands, such that $7,000 = $7 million.

Meh, I just copied a quick number without trying too hard to interpret it.

And I think I found the answer. July 2003 Nvidia had a $24 Million increase in accounts receivable while only having in increase of $1 million worth of inventory. There was an increase of $17 Million per quarter during the 6 month period after that.

So, it would seem that the deal was worked out something just before July 2003 and actual work started before April 2004, and it was a significant amount of work judging from the increase in R&D costs.

 

[Powderkeg]

I wish I could edit.

It was supposed to say:

There was an increase of $17 Million per quarter in Research and Development expenses during the 6 month period after that.

 

[Carl B]

You don't need to know specifics. You need only look for telltale signs with no other explaination.

A highly customized chip seperate from their normal product cycle would require a significant increase in R&D costs. That would indicate when work began.

Then look for a sharp increase in their Accounts Receivable income with virtually no change to their Inventory stock. That would give a good clue as to when someone gave them a lot of money without buying any of their current products.

Nvidia isn't producing a large quantity of highly customized chips. They only have 1 customer of such chips that I know of, so there wouldn't be very many other explainations for a large increase in income with no sales and a large increase in R&D expenses shortly after.

Two things.

First of all, since RSX is 'based' on G70 development, the majority of the R&D costs would have been folded in to regular operations anyway. The RSX, one way or another, is simply derivative - and that much we know.

Secondly, a signed contract might not result in any immediate financial gain in any event. The conract could simply stipulate several conditions to be met, with the agreed compensation being the ~$5 IP royalty payment per chip produced down the line - something NVidia could probably expect to gain ~$500,000,000 from eventually. In addition, R&D costs could have been defrayed by Sony and actually appear on Sony's books - the fifty engineers NVidia contributed to the team could simply have been on loan to Sony.

There are plenty of ways this could have been accoounted for. Unless you and I and whoever are willing to start doing the research, no one here is for certain right or wrong.

EDIT: Well then, after reading your most recent post, maybe you've found the answer already. I'd still prefer isolated though whether that R&D was associated with G70.

Here's a relevent David Roman quote:

David Roman: We do not disclose anything on the actual resources. Obviously there is a major economy of scale. This chip is a custom version of our next generation GPU. So we’ve been working on the next generation GPU for close to two years now, namely about 18 months. I don’t know the cost of this one but I know the cost of the last generation: it was 350 million dollars. These are expensive chips to develop. So, the fact that we didn’t have to do that development just for the Sony application obviously is a major economy of scale, because we are doing the development for the new chip anyway. The amount of work involved into customization, I don’t know. I know that we designed a new generic team, we had been working with Sony before on the actual development platform, we had actually been working on the details of the chip. We now have assigned an engineering team to work as a Sony engineering team. And the numbers? I don’t know what the numbers are but I am sure they are growing, but there is a lot of work that’s going on. As I have said we do not disclose the details, but there is certainly some economy of scale due to building it on the technology that we have been working on for a long time. So, it is the next generation of GPU.

 

[Hardknock]

I don't get it. Why would Nvidia or Sony hide that they are working together? There is no gain. ATi came out as soon as they got the contracts for Nintendo and MS. In a financial PDF ATi included how much Nintendo and MS were to pay them for licensing and how much they both paid towards R&D for their chips. There's nothing strategic by keeping something like that secret(and to be quit honest in the corporate worlds we live in today, the competition would have probably found out very easily anyway.) Nvidia announced their partnership the end of 2004 and then expected us to believe they have been working on it for 2 years out of the blue. Sony and Nvidia were trying to save face. I find it really hard to believe that with as many intelligent people that this forum has that you guys would be so gullible to think otherwise. Hell even in an ATi interview, one of the chip designers let slip that Sony went with Nvidia last minute and that's why they couldn't get a chip from scratch. I guess we'll never have concrete evidence either way, but I think common sense dictates what truly happened here.

 

[Carl B]

I don't get it. Why would Nvidia or Sony hide that they are working together? There is no gain. ATi came out as soon as they got the contracts for Nintendo and MS. In a financial PDF ATi included how much Nintendo and MS were to pay them for licensing and how much they both paid towards R&D for their chips. There's nothing strategic by keeping something like that secret(and to be quit honest in the corporate worlds we live in today, the competition would have probably found out very easily anyway.) Nvidia announced their partnership the end of 2004 and then expected us to believe they have been working on it for 2 years out of the blue. Sony and Nvidia were trying to save face. I find it really hard to believe that with as many intelligent people that this forum has that you guys would be so gullible to think otherwise. Hell even in an ATi interview, one of the chip designers let slip that Sony went with Nvidia last minute and that's why they couldn't get a chip from scratch. I guess we'll never have concrete evidence either way, but I think common sense dictates what truly happened here.

Hardknock I've already stated why it would be quite beneficial (to Sony) to hide that they are working with NVidia. And if you feel that the corporate world is as leaky as it is, then find me one definitive claim from any source that Sony and Toshiba were definitely working on a Cell-based GPU.

You will find no such telling document, because none exists. It was all speculation - though educated speculation that I still believe. The point though being, if the world you believe in really existed, we should have evidence of such, due to the 'holes.'

 

[one]

ATi came out as soon as they got the contracts for Nintendo and MS.

It was Aug. 14, 2003 MS and ATI announced their partnership. Xenos was taped out at the end of 2004, so it's approximately 1 and a half year and not very long time if you ask me.

 

[scooby_dooby]

You guys are funny. You now what you, scooby, the other guy Hardknock are all right NVidia started to work on the RSX the week before E3. I mean that's what you want to hear right? Yep it was a 11 hour and 59th mintue job.

Let's just forget anything Ken Kutargi said. But you guys are right. Glad to see we have people hear more knowledgeable about the PS3 project than Ken.

All your snide coments won't change the fact that Sony and Nvidia refuse to give REAL details about when development began.

I don't want to hear anything, quit accusing me of bias. Thx.

 

[wco81]

Lot of companies won't announce impending deals in a 10Q.

Wouldn't that be an obvious vector for preannouncements if they did?

Plus 10Q usually has disclaimer type stuff, like things which could go wrong and hurt future profitability, not things which can enhance it.

What would be the point in disclosing this deal before the public announcement? They wouldn't earn anything until the PS3 actually started shipping so it's not like 2 years before the PS3 launches, they can forcast revenues from the deal.

For all we know, the financial arrangement between Sony and nVidia may not have been hammered out before the announcement. For all we know, it still might not be.

 

[Shifty Geezer]

Sony and Nvidia were trying to save face.

Save face from what? What hideous cockup or embarresment does one or other or both parties want to hide?

 

[scooby_dooby]

Save face from what? What hideous cockup or embarresment does one or other or both parties want to hide?

Are you serious?

The obvious implication that the GPU was a last-minute decision.

Why else would they use clever language try and give the impression of something, but not just come right out and say it. For example why say "the G70 has been in development for 2 years, over that time we have been collaborating with Sony on their next gen consol GPU" instead of: "We started development on the SOny RSX in April 2003"

Both sentences give the same impression, so why dodge the issue? Why the fancy wording? Why not just say when they began development?

 

[London Geezer]

Are you serious?

The obvious implication that the GPU was a last-minute decision.

What obvious implication? The only people that care are the nagging fanbois...
Anyone else will look at it for what it is: Sony saw that NVIDIA could do a good job and singed them on, and we're gonna get much better graphics from this decision than whatever other plan Sony had in mind. End of. If someone sees that as a negative thing, i think he's looking at it from the wrong perspective. It's a Good Thing (TM).

 

[scooby_dooby]

Well that's your opinion. IF Sony didn't care about th "nagging fabois" as you put it, why do they play the hype game so strongly? Your assertion that they don't "care" flies in the face of all of Sony's actions over the last decade.

If the New York Times, or any mainstream media outlet ran an article on Sony's "Last Minute PC Adapted GPU" that would not be good. It simply looks bad, they are trying to save face.

Talk about a no-brainer.

 

[Shifty Geezer]

The obvious implication that the GPU was a last-minute decision.

For the first part it's not 'last minute' as the decision was made a year or two before PS3's release. That's like the last 25-33%. And what's so terribly wrong with keeping your options open, evaluating alternatives, and selecting the best solution when you've enough data to make an informed decision? People talk as though an nVidia component is the worst Sony could have done, or a G70 derivative is a diabolical solution for a console. Perhaps that's true, but someone complaining aboutr the choice of nVidia's GPU should at least explani what would be abetter option and why. eg. If Sony had engaged nVidia in 2002, and they had worked on a GPU solution for 3 years, what would an ideal GPU look like? What have Sony missed out on by waiting too long to start development earlier? RSX is amongst the most powerful GPU's ever devised. A bog standard GPU did fine for XB and totally outclassed the PS2's custom solution. What we're seeing so far looks amazing and that's just the tip of the iceberg. I don't honestly know what people are complaining about!

 

[Edge]

I can't believe the discussion going on. Some of you guys really need to get a life, away from this forum.

Who cares how long they are have been working on RSX. It's a version of the 7800 GTX running at a higher clock rate. We know it going to be kick ass, because the 7800 GTX is kick ass.

 

[London Geezer]

Well that's your opinion. IF Sony didn't care about th "nagging fabois" as you put it, why do they play the hype game so strongly? Your assertion that they don't "care" flies in the face of all of Sony's actions over the last decade.

If the New York Times, or any mainstream media outlet ran an article on Sony's "Last Minute PC Adapted GPU" that would not be good. It simply looks bad, they are trying to save face.

Talk about a no-brainer.

Why would the New York Times run an article like that?
As i said, only you and a few other people are actually nagging about this. Everyone else (you know, normal people who don't know jack about this kind of thing) will see "Custom NVIDIA GPU" and put it on the same level as X360's "Custom ATI GPU".

Yes, it really is a no brainer.