I think integration was always going to be hard and most people who understood the problem knew that it was going to be hard/impossible but they went ahead with it anyways.
At the time they were talking about integrated compute units between CPU and GPU, mapping GPU register space into CPU address space, linking/unlinking CPU and GPU pipelines, etc etc. And the CPU and GPU teams would be working on this while also having to produce top-shelf stand-alone CPUs and GPUs to fight on 2 separate fronts against entrenched and capable competitors. It didn't really seem possible or even desirable at the time.
I also don't understand why having a GPU would improve their chances with console vendors. Those vendors could have still selected AMD CPUs but cut separate deals for the GPU with other companies. This is a business AMD is already and was already in. They do this in all sorts of markets like network switches.
Having an existing APU line makes the chances of success a whole lot higher.
I don't know what the grand plans were to have CPU and GPU teams both in a multiple level deep tick tock pipeline (organizations are structured like CPUs or CPUs are structured like assembly lines ... pick your causal metaphor). That would require the right fabric, I don't know if they have that yet. There is a ton of research that shows that a mediocre GPU on the same memory bus as a CPU has a huge number advantages over a GPU on the PCIe bus, even at x16. With HBM, hell put the GPU in the HBM. All HSAIL the HBM!
CPU, GPU and FPGA will all merge into a computational goo. With AMD acquiring Xilinx and their past with APUs and HSA, I stand by my statement. AMD has been stalling on the G series Ryzen parts because I think they don't want to cannibalize their discrete GPU business, but CPUs have more than enough compute and memory bandwidth to support software geometry and rasterization.
At the time they were talking about integrated compute units between CPU and GPU, mapping GPU register space into CPU address space, linking/unlinking CPU and GPU pipelines, etc etc. And the CPU and GPU teams would be working on this while also having to produce top-shelf stand-alone CPUs and GPUs to fight on 2 separate fronts against entrenched and capable competitors. It didn't really seem possible or even desirable at the time.
I also don't understand why having a GPU would improve their chances with console vendors. Those vendors could have still selected AMD CPUs but cut separate deals for the GPU with other companies. This is a business AMD is already and was already in. They do this in all sorts of markets like network switches.