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Xbox One and PS4 thrust AMD back into black

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AMD reported $1.46 billion in revenue and an operating income of $95 million for the third quarter of 2013, a return to profit which it attributes to its semi-custom chips that power the PlayStation 4 and Xbox One.

AMD also reported operating losses of $29 million and $131 million for Q2 2013 and Q3 2013, respectively. Its reported revenue of $1.46 billion is a year-over-year increase of 26 percent, with a 15 percent sequential increase.

Its Graphics and Visual Solutions (GVS) unit, which is comprised of GPU and semi-custom products, recorded an operating income of $79 million. The revenue increase of 110 percent was "driven largely" by its semi-custom business.

AMD announced its Semi-Custom Business Unit in May, established to work with its customers and "create semi-custom parts and to work with what they want and create what they want."

Through the business unit, PlayStation 4 and Xbox One are supplied with AMD technology. Inside Sony's PlayStation 4 sits an eight-core APU based on AMD's Jaguar APU line, using a combination of x86 and Radeon graphics technology. AMD and Microsoft collaborated to develop a similar semi-custom x86-powered APU for the Xbox One.

Valve announced late last month that it is "working with multiple partners" to develop hardware running the Linux-based SteamOS. Nvidia was the first partner officially announced, with Valve later confirming that Steam Machines commercially available in 2014 will feature graphics hardware made by AMD, Nvidia and Intel.

AMD also recently revealed Mantle, an API that gives developers low-level access to the native language of AMD's Graphics Core Next architecture, which is supported by its AMD Radeon R7 graphics card.

For more about the company's successfully strategy to have three consoles with cores built with AMD technology, be sure to read our interview with corporate vice president and general manager Matt Skynner.