Nvidia has screwed over MS & Sony in the past. They are supposedly hard to work with.
If AMD gives a equal offer to Nvidia, I bet at this point MS & Sony would both go AMD.

I'm still waiting for the day when AMD can make powerful GPU/CPU's at a really decent price that absolutely mop the floor with the competition, so far that hasn't happened yet as the opposition has way more marketshare and users on it's side.

I don't think Nvidia was stupid or foolish for asking what they wanted, it was clear that none of the 3 wanted to break bank this gen (besides MS) and AMD just happened to bend over backwards and serve you breakfast, I honestly don't see how they need, nay, have to bend over their back and be at the beck and call of the other 3, no one owns them so asking for their own price was their decision and of course none of the 3 wanted to go with it which leaves Nvidia with PC and other markets to work with.

when it comes to things like these I don't think there is such a thing as not worth the effort. 

even if AMD makes an average of $10 in profit on every APU in the PS4/XB1 for say 100M consoles. that's Still 1B in profit right there. And this being the push into X86 territory AMD has almost certainly secured their business across whatever other consoles they want to make. Well, at least going with AMD would be the easier decision. 

It remains to be seen in this was a mistake on nvidias part; though I doubt anyone wants to get into such long term arrangements with Nvidia at all. There is a reason why even phone manufacturers shy away from putting their mobile processors in their phones. Nvidia just doesn't seem to be the nicest of bed buddies. 

No they don't work better because they're on the same chip. They will still communicate outside of the chip through the RAM anyway, which in a lot of cases is a bottleneck for APUs because CPU and GPU have to share it instead of each having their own. APUs are also extremely limited in power due to being on the same chip. The same heat that's usually generated on 2 chips and cooled by 2 coolers is crammed on a single small surface.

If it's about performance APUs(or SOCs) will never beat dedicated CPU + GPU. But since an Intel and Nvidia always demand premium price for their products going with AMD was the natural step. APUs are a great compromise but do not excel in anything.

The biggest problem is that that multiplatform games will be optimized for AMD and run better on PC with an AMD card inside. Even if Nvidia provides better and more efficient hardware, these games will always run better on AMD.

Not exactly, both the CPU and GPU have cache coherent shared virtual memory in the case of consoles so they are not exactly forced to only communicate through the main memory ... 

I have not said "only". But they will not be able to communicate exclusively through the in-chip connections in games, which makes any gained advantage negligable.

Yes, for the vast majority of the time games won't exactly get a near 100% hit rate in the cache but how do you exactly prove that memory accesses from both the CPU and GPU is a bottleneck ? 

Actually they do.

Thats why AMDs chips are differnt than intels + its GPU.

Intels cpu and igpu even if they are on the same chip they are still seperate from one another.

AMD calls their cpu+gpu chips APUs (accelerated processing units).

They have HSA (Heterogeneous System Architecture) instructions that allow for the integration of central processing units and graphics processors on the same bus, with shared memory and tasks.

Notice how it says "shared" tasks.

That is something Intel cannot do with their igpu.

They cannot take 1 work task, and use both the cpu and gpu at the same time, to work on the same problem.

That is why AMD does these small igpu on their chips.

Because if you code for it, you get much higher perf/watt.

This is why Sony went with 1 pool of memory thats shared.

Sony can if they want too, use HSA to off load work from the CPU and put it to work on the cpu+gpu combo, getting much higher results.

Im not sure if anyone not first party, will ever use this (on the ps4), but the option is there.

You would think so logically, but has that really been the case so far in this generation?