Microsoft has announced that it will use one of IBM his PowerPC processors in his next-gen Xbox. A few months ago we already posted a story that Microsoft will use a graphics solution from ATi in his new Xbox.
Compatibility with older Xbox software could be provided by emulation technology Microsoft acquired in February from Connectix, which sells Virtual PC, allowing Intel-based software to run on PowerPC chips.
For IBM, the deal is an important coup, placing it in a strategic position in rapidly growing consumer electronics markets. It already provides chips for Nintendo, the maker of GameCube, and is working with Sony and Toshiba on advanced chip designs for futuristic types of consumer electronics devices. The deal also boosts IBM's foundry business, its contract chip-manufacturing group, which has been losing money.
"IBM has been the hungriest to get the business for its foundry," said Kevin Krewell, head of the Microprocessor Report. "But it will be a while before it will see revenue from this deal."