AMD's Fusion Cloud Could Hurt GPU Biz

How often do you upgrade your graphics card to play the latest first person shooter games? Every six months? Every year?

Graphics cards are the focal point in a system for gamers. A GPU is the break or make point for a high-end game to be playable. This in essence, is what AMD wants to address with its Fusion super computer. AMD wants to be able to deliver a game to users on any computer. Because of the way Fusion delivers graphics--essentially pre-rendered and them streamed over the Internet--gamers will be able to enjoy all the latest games, no matter what GPU they have in their system.

While this makes perfect sense for the consumer, where does AMD's graphics card business stand in this situation?

With a really good Internet connection--net connections in the U.S. are horribly behind--you can enjoy the latest games, even on a GPU that can't even handle 3D rendering. Time to whip out that old ATI Mach 64 card.

But Fusion is more than pre-rendered games on a super computer, it's about integrating both the GPU and the CPU into one chip. But this too presents an issue for the gamer. Why would a gamer want to have their GPU tied to a CPU, when a CPU can outlast a GPU by many months and even years.

We spoke to an AMD board partner today, who wanted to stay annonymous, and it indicated to us that the future for AMD GPUs may be very limited for board partners. Once Fusion has the GPU and CPU in one chip, what will the board partners do? Will there be Fusion add-in boards on motherboards instead of CPU sockets? That could very well be the outcome. Even more interesting, Zotac, an Nvidia partner, told us that Fusion is actually great for the Nvidia camp because "no one wants to to have to upgrade both everytime; as a gamer, I want to upgrade my graphics card separately, especially when I alreayd have a great CPU."

Here's the real kicker though: both Zotac and the AMD board partner said that AMD is really going to kill 50-percent of its buiness with Fusion. Obviously, we think AMD has thought about this already. When asked if AMD plans to exit the discrete GPU business, it declined to comment on future initiatives.

As Nvidia continues to push on the strengths of its discrete GPU solutions, AMD seems to be taking a totally different route. Only time will tell how these strategies will play out.

One more thing: if AMD does turn out to make its Fusion super computer a success and gamers could always play the latest games no matter what their platform was, who would buy a GPU at all?--AMD or Nvidia.