Should AMD Shareholders Be Worried About Mantle’s Delay?

AMD's (NYSE: AMD  ) graphics API project, Mantle, has been delayed. Electronic Arts' (NASDAQ: EA  ) Battlefield 4 was poised to become the first video game to include support for AMD's technology, but the update that would've brought Mantle support has been postponed.

If Mantle does catch on, it could give AMD's graphics cards an advantage over rival NVIDIA (NASDAQ: NVDA  ) .

Mantle lets you do more with less
AMD developed Mantle to increase the graphical performance of PC games. PC gaming hardware is notoriously fragmented -- the parts in your typical gaming PC comes from half a dozen different manufacturers, with perhaps hundreds of different products.

To get around this fragmentation, game developers use different APIs and SDKs when creating their games. AMD is pitching Mantle as the next great graphics API, allowing video game developers to get better performance out of lesser hardware.

Slides from an upcoming AMD presentation leaked onto the Internet Monday (via incgamers) claim to show substantial performance increases when using Mantle -- up to 45% better graphical performance than DirectX, another popular graphics API.

Battlefield 4 is a mess
Battlefield 4, Electronic Arts' popular first-person shooter, was supposed to receive support for Mantle in December. However, the patch that would've added Mantle support has been pushed back -- according to AMD, to some time this month. At first glance, this might seem disconcerting -- is a delay bad news for AMD's would-be graphical standard? Potentially, but in all likelihood, probably not.

Electronic Arts' flagship title has been plagued with issues, making Battlefield 4 virtually unplayable for some users. Early in December, Electronic Arts said it was halting all production at its Battlefield 4 studio, DICE, until the bugs affecting the game were resolved. With a crisis on its hands, adding Mantle support was likely not high on Electronic Arts' priority list.

Will Mantle emerge as the new graphics standard?
Of course, Electronic Arts' shooter isn't the only game slated to support Mantle -- AMD has said Thief and Star Citizen will also include support, with more games on the way. AMD investors should keep a close eye on Mantle adoption, as it could have a noticeable effect on its graphics business.

Collectively, AMD and NVIDIA account for almost the entire PC graphics market, but AMD has long played second-fiddle: NVIDIA takes about two-thirds of the market to AMD's one-third. But if Mantle were to catch on, it could drive PC gamers to AMD's cards. Assuming Mantle support is eventually added to Electronic Arts' Battlefield 4, not every player will be able to take advantage of it: In order to see the performance boost Mantle brings, gamers will need to own a newer model AMD graphics card.

AMD has pledged to keep Mantle open, meaning that one day, NVIDIA could add Mantle support to its graphics cards, in theory taking away AMD's hardware advantage. Still, this seems unlikely -- with AMD in control of the tech, NVIDIA could be at a disadvantage.

Mantle could be huge
If Mantle catches on, it will be a huge win for AMD. Last quarter, about 45% of the company's revenue, and more than 80% of its operating income, came from AMD's graphics division -- more than double from the prior year.

These figures were elevated by demand from the Xbox One and PlayStation 4. Nevertheless, AMD's graphics are becoming a more vital component of its overall business, and Mantle -- if successful -- could propel it to new heights.

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  • Report this Comment On January 07, 2014, at 11:06 AM, KenLuskin wrote:

    Sam, MANTLE has NOT been delayed!

    The developers at Dice the creators of BF4 are having internal problems, that are NOT related to MANTLE.

    MANTLE has been adopted by 3 of the largest game engines, and is being supported by at least 20 new games to roll out this year.

    AMD created the MANTLE API for PCs because the equivalent is available for the new consoles.

    ALL the new AAA games are being OPTIMIZED for AMD Grapics!

    The game developers KNOW that using the MANTLE API will improve performance by about 45% on PCs that have AMD's latest GPUs or APUs.

    Even though AMD is saying MANTLE is "open", it ONLY works on AMD's latest GPU architecture.

    So, if Nvidia wants to get a license from AMD to copy its GCN GPU architecture, then MANTLE is available for free!

    NO WAY Nvidia or Intel is going to switch over to AMD GPU architecture.

  • Report this Comment On January 07, 2014, at 11:12 AM, bluesky64 wrote:

    Smart investors ( aren't scared ) and have done the math from Xbox and Play station Sales figure posted and the opening of China mkt. will preform nicely. Here's the Bottom line $ .42 per share in 2014 TOTAL: 2014 sales $ 8.35 BILLION NET profits $1.2 BILLION

    TOTALS of ALL of AMD's 4 MAIN current BUSINESS AREAS for 2014 to 2017

    1) CONSOLES: 2014 sales $3 BILLION NET profits $600 million

    2015 sales $5.4 BILLION NET profits $1.08 Billion

    2016 sales $5.4 BILLION NET profits $1.08 Billion

    2) DISCRETE GPUs

    2014 sales $2 BILLION NET profits $400 million

    2015 sales $2 BILLION NET profits $400 million

    2016 sales $ 2 BILLION NET profits $400 million

    3) SERVER division

    2014 sales $850 MILLION NET profits $200 million

    2015 sales $ 1.5 BILLION NET profits $500 million

    2016 sales $2.5 BILLION NET profits $800 million

    4) PC Divison 2014 sales $2.5 Billion NET profits ZERO

    2015 sales $2.25 Billion NET profits ZERO

    2016 sales $2 BILLION NET profits ZERO

    TOTAL: 2014 sales $ 8.35 BILLION NET profits $1.2 BILLION

    2015 sales $ 11.15 BILLION NET profits $ 2 BILLION

    2016 sales $ 11.9 BILLION NET profits $ 2.3 BILLION

    Price target stands

    AMD Dec 31 2013 $ 3.83, Jan 6 $ 4.13 Conference call to share holders Jan 7 CES $ 4.32 Jan 19 2014 $ 4.47, Earning call Jan 22 2014 $ 4.75. Feb 18 2014 $ 5.25, Dec 31 2014 $ 10.75 ( 300% gainer for 2014 )

    AMD will be strong over the next 3 years; will close 2014 at $ 10.75 share, will close 2015 at $20.00

  • Report this Comment On January 07, 2014, at 11:14 AM, bluesky64 wrote:

    Smart investors aren't scared they've done the math from Xbox and Play station Sales figure posted and the opening of China. Here the Bottom line $ .42 per share in 2014 TOTAL: 2014 sales $ 8.35 BILLION NET profits $1.2 BILLION

    TOTALS of ALL of AMD's 4 MAIN current BUSINESS AREAS for 2014 to 2017

    1) CONSOLES: 2014 sales $3 BILLION NET profits $600 million

    2015 sales $5.4 BILLION NET profits $1.08 Billion

    2016 sales $5.4 BILLION NET profits $1.08 Billion

    2) DISCRETE GPUs

    2014 sales $2 BILLION NET profits $400 million

    2015 sales $2 BILLION NET profits $400 million

    2016 sales $ 2 BILLION NET profits $400 million

    3) SERVER division

    2014 sales $850 MILLION NET profits $200 million

    2015 sales $ 1.5 BILLION NET profits $500 million

    2016 sales $2.5 BILLION NET profits $800 million

    4) PC Divison 2014 sales $2.5 Billion NET profits ZERO

    2015 sales $2.25 Billion NET profits ZERO

    2016 sales $2 BILLION NET profits ZERO

    TOTAL: 2014 sales $ 8.35 BILLION NET profits $1.2 BILLION

    2015 sales $ 11.15 BILLION NET profits $ 2 BILLION

    2016 sales $ 11.9 BILLION NET profits $ 2.3 BILLION

    Price target stands

    AMD Dec 31 2013 $ 3.83, Jan 6 $ 4.13 Conference call to share holders Jan 7 CES $ 4.32 Jan 19 2014 $ 4.47, Earning call Jan 22 2014 $ 4.75. Feb 18 2014 $ 5.25, Dec 31 2014 $ 10.75 ( 300% gainer for 2014 )

    AMD will be strong over the next 3-4 years; will close 2014 at $ 10.75 share, will close 2015 at $20.00

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