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From IBM's intranet...

Microsoft has selected IBM over Intel for the microprocessor technology that will power the next generation of the Xbox game console.

IBM earned this business because of its advanced chip technologies and deep development capabilities †” required to create the chips that will provide the performance the future Xbox will need †” which no one else in the industry can provide. The new Xbox systems will use chips based on IBM's family of state-of-the art processors.

"Competitive gamers are looking for gamemakers to provide greater functionality in game systems †” higher resolution and more realistic graphics, better sound quality, faster system response, wireless features, enhanced online gaming capabilities, even two-way audio," said John E. Kelly, III, senior vice president and group executive. "And the gamemakers are looking to us for technology that can deliver that kind of gaming experience."

IBM also is working with Sony Computer Entertainment to develop the processor for the next version of its Playstation game system, Playstation3. With involvement in both Xbox and Playstation3, IBM is the future of gaming when it comes to chips.

Intel: Denied!

Winning this deal unseats Intel, which provides the processors for the current Xbox systems. This is the second time in recent months that IBM has handed Intel such a setback. Earlier this year, IBM won the business to provide the processors for Apple's new G5 personal computer over Intel.

"We kept Intel out of the Apple G5 and now we've kicked them out of Xbox," said Jeff VerHeul, vice president, Engineering and Technology Services, who leads the team that won the Xbox business. "Not bad, considering one Intel executive recently called us 'trivial.' I wonder how trivial he thinks we are now."

The deal establishes IBM as the leading supplier of advanced chip technology to the gaming industry. IBM currently makes the processors for Nintendo's GameCube systems and recently began shipping in volume the GeForce FX advanced graphics processor for NVIDIA, the premier supplier of graphics chips for the gaming industry.

Two years ago, IBM began working with Sony to develop the processor for the next generation of its game system, PlayStation3. And now IBM has won the next-generation Xbox.