Advanced Micro Devices (AMD) is quite optimistic about the future of the company vis-à-vis said company’s growing video game business. The company recently forecasted a strong financial outlook and has also shown profitability in the current third fiscal quarter ending Sept. 30. AMD’s revenue in the third quarter is expected to grow 22 percent from the second quarter’s $1.16 billion, and the company expects to be profitable at the midpoint of its guidance in the net income category.

In a recent conference, Chief Executive Rory Read said that the AMD has created a niche in game consoles segment by getting its chips into all three major consoles: the Nintendo Wii U, the Microsoft Xbox One, and the Sony PlayStation 4.

“These tailored products are great examples of the opportunities we have to quickly diversify our product portfolio and enter into new markets where our intellectual property and design capabilities provide us with a competitive advantage. AMD is striving to become the “defacto standard for game developers” in consoles, PCs, and mobile devices. The company grew share in graphics in part because of its Never Settle bundle, which combines free games with high-end AMD graphics cards,” Read informed.

Apparently, carving a niche with video game chips is a part of AMD’s multistep strategy to restructure and transform the company’s growth in the future. AMD is trying to creating a solid marketplace, where it can distinguish itself from Intel and reuse the intellectual property that it develops for PC microprocessors.

Besides focusing on video game chips, AMD is also putting emphasis on chips for micro servers. By 2014, the company hopes to launch ARM-based chips that go into these micro servers, which were pioneered by SeaMicro, a company that AMD acquired. All in all, this diversification strategy of AMD is an excellent example of how consoles affect the industry of technology, and diversification is a good thing for custom-chips and it adds to competition.