Microsoft Turns to IBM for Next Xbox Chip
 

http://story.news.yahoo.com/news?tmp...h_microsoft_dc

50 minutes ago

NEW YORK (Reuters) - Microsoft Corp. (Nasdaq:MSFT - news) on Monday said it would turn to International Business Machines Corp. (NYSE:IBM - news) for microchip technology that it will use in the next version of its popular video game console, the Xbox.

Redmond, Washington-based Microsoft, the world's largest software company, used a chip from the No. 1 microprocessor maker, Intel Corp. (Nasdaq:INTC - news), in the first version of its Xbox, which was released in 2000.

Richard Doherty, of Seaford, New York-based Envisioneering, a technology advisory company, said that IBM's PowerPC chips consume less power and run cooler than other chips. They compete with chips from Santa Clara, California-based Intel and Advanced Micro Devices Inc. (NYSE:AMD - news), a much smaller microprocessor maker in Sunnyvale, California.

"Intel had wrestled away the design win for Xbox from AMD at the last minute, and this will probably be quite a surprise to Santa Clara this morning that the next generation from their ally in system design, Microsoft, is going to their rival," Doherty said.

IBM, based in Armonk, New York, has licensed microprocessor technology to other companies and makes chips for Apple Computer Inc. (Nasdaq:AAPL - news) and for the Nintendo (news - web sites) gaming console, among others, in its factories.

IBM opened a new semiconductor plant in East Fishkill, New York earlier this year and has been trying to lure new customers to the plant.

<b>The next version of Xbox is expected to be announced in January by Microsoft founder and Chairman Bill Gates (news - web sites) and to be on sale next fall ahead of the holidays, according to Doherty. </b>

IBM is also working with Sony Corp (news - web sites). on a chip for its next version of the PlayStation gaming console. Earlier this year, Nvidia, which makes graphics chips often used in gaming, also turned to IBM to start making certain of its chips.


I hadn't heard that the next XBox was coming in the Fall of 2004, before!

Chris

The next version of Xbox is expected to be announced in January by Microsoft founder and Chairman Bill Gates (news - web sites) and to be on sale next fall ahead of the holidays, according to Doherty.

I do hope that is not accurate. That isn't good news for the industry. Shortening the lifespan of consoles is not a good thing at all, this industry isn't based on the PC markets 6 month-12 month hardware cycle.

heh, as long as it's backwards compatible, i have no problem w/ an new and improved upgraded xbox. mine's feelin' a bit dated.

3 years is a long time for a product like consumer console games. the only real holdback was compatability, imo.
--

i am skeptical of the next holiday season as the target date though. how the heck are they going to move that fast? new chip, new video card, getting games made, etc.

That would suck, a three year lifespan would keep me from buying another MS system EVER. I want at least 5 years of solid support for my $.

So Xbox 2 will be made from ATI and IBM components? Just like my Gamecube! Smart move MS!

I think that M$ wants to be on the 5 year plan also, but since they started the xbox mid-lifespan, they have to get nextbox out in tandem with the new sony box to be competitive.

All indications are that Sony is a ways off on the PS3 and has no plans to launch first next generation.

3 years would really piss me off. Oh well, I've been thinking about getting rid of my X-Box anyways.

i don't think Intel made any money from the xbox deal anyways

Yeah, I think the profit margins for Intel were so small that I wouldn't be surprised if they aren't too worried.

I wonder if this is just a marketing victory. No real money to be made, just another way to keep your visibility high.

wonder if they''ll use the G5 chip

EA and THQ have both said that they haven't received DevKits from Microsoft yet. Assuming that a game takes roughly 18 months to develop (their words, not mine), it would mean that the Xbox2 will be out 6 months before any games could be released. Somehow I doubt that this is accurate.

This release date may be true, but mainstream press coverage of the gaming industry is often wildly inaccurate. I just don't see this happening.

It's basically Sony stategy thrown back in thier face. Bust out your console a year before the competition and reap the benefits.

Joe Sixpack doesn't give a crap about system lifespans.

I agree with you %100 it seems xbox owners have the most money to burn out of console owners. However I'm not ready to burn money on a new system I would want like 6 games or something. I'm hoping M$ does not look at the owers and say well they get the cash they buy the most games for thier system.

I can't stand the PC crap I tried it with a $200 card to gave it a shot damn sure was not worth it to me. I also think this story is BS.

Um... Sony was just following the 5 year life cycle of game consoles. According to this report, Microsoft is breaking that.

*Reads article again.*

It says that the X-box was released in 2000, but wasn't it released in 2001?

That's too soon... however, if it's backwards compatable, it might just gain enough momentum during the year by itself that it'll maintain a lead for the next generation - it could also backfire if the PS2 continues to outsell it for the first year and then the PS3 squashes it. Tough call. If it were my company, I wouldn't risk it. I also wouldn't use IBM to make my chips.

I understand not risking it, but wy would you advise not using IBM. They are pretty much known as a market leader in high end chips. I mean I'm sorry if Joe Six Pack identifies with Intel's crappy stuff, but I would pick the superior stuff anyday over the mainstream stuff.

I just wouldn't. I'm not a joe six pack... the reason isn't cuz I'd rather have mainstream either. I think their alignment with the PC is working for them and I wouldn't try to move away from that. I also don't agree that Intel and AMD make crappy stuff compared to ibm.

I'm calling bullshit on the 2004 thing. Especially since I've never ever ever seen it mentioned elsewhere and Microsoft's press release doesn't mention it.

It would be a huge mistake for MS IMO. Especially since we all seen how fast they dropped the price of the Xbox. If Xbox 2 were released that early, I bet most people would wait for the quick price drops to happen yet again.

YBox?

More speculation indicating that Xbox 2 may not be backwards compatible:

http://arstechnica.com/archive/news/1067882060.html

Microsoft will not gain and lead the next generation of consoles, no chance what so ever. No Japan=no number 1 in the console industry. I don't see the Xbox 1,2 or whatever else fanbase getting to the point in Japan that Sony or even Nintendo has, ever.

The Xbox has been defined with a western slant in regards to what it's fanbase wants, it's U.S. fans don't seem to care for Japanese games on the Xbox compared to the other two systems,which is not surprising since I would suspect alot of the Xbox userbase is made up of PC gamers that don't feel like upgrading their comp all the time. The only thing Microsoft has is hoping Sony somehow screws up.

Backward Compatible is a non-issue since Sony will probably be doing the same thing, just with the PS1 and PS2 backward compatibility I would suspect. To be honest though I have realized backward compatibility isn't that big of a deal generation to generation. I rarely play my PS1 games on the PS2.

I won't say where I got the following info... You can believe it or not, I won't try to defend it. I won't repeat it either. This is what I heard and I'm taking it as more or less fact.

Xbox 2 won't release in 2004... that was just made up by the press.
Xbox 2 will release at the same time as PS3.
Xbox 2 will NOT be backward compatable with Xbox 1 software.
Xbox Live will be integrated with their next OS - Longhorn.
Xbox 2 will ship simultaneously worldwide this time
PS3 will only be backward compatable with PS2 and not ps1 software (so what, with the PSP coming anyway)
PS3 will use nVidia graphics instead of their own gpu.

No surprise, but microsoft had an awful contract with nVidia and in order to be backward compatable, they would have to continue with the terrible contract. After hearing about the IBM processor they are planning to use, I change my opinion about it and I think it's a good idea now.

I believe Xbox 2 will have superior hardware to PS3. I don't think the fact that they won't be backward compatable will hurt them, but it certainly won't help them get the momentum that PS2 had. I think all 3 consoles will probably release at the same time in 2005. I think PS3 will probably come out on top, but the gap will be much much smaller between it and the Xbox this time. Gamecube 2 or whatever it will be called will probably repeat the numbers of this generation and will come in 3rd. That's if it releases with the other 2. It's still possible that it will lag behind.

Good post Trigger! :)

Chris

I have enjoyed my Xbox for 2 years now and paid full price for it back then. You can count me in the minority as one who would buy a new version if it is really a good upgrade. Backwards compatability is a nice concept but something I don't really care about using since I have never been one to hold on & continue to play old games.

I was burned by Sega before but back then I was a starving college student. As long as a system is DOA like the Sega CD, 32X & Saturn, then I don't care as long as I get a few years out of it.

I have no set loyalty to the Xbox so I would definitely weigh the all the differences between the PS3 & the Xbox 2 before buying one of them. I just want to see a significant improvement in technology for my money.

hmm... Trigger has been right before with this info. I remember when talk of GTA coming to the Xbox was the latest and greatest rumor, he was spot on with the prediction. At least, I think it was Trigger.

Everything he said makes sence except for Sony using nVidia.

it was me... and the sony thing didn't make sense to me either. I'll have to wrench more info about that.

Looks like it was made up by one of the sources for this story. According to the Reuters article, it was Richard Doherty, of Seaford, New York-based Envisioneering, a technology advisory company, who said Xbox 2 was coming out in 2004. After looking at his company Web site, it looks like this guy is probably a lame-ass source to use (their "metropolitan" Seattle office is located in Silverdale, WTF?).

I'll wait until Microsoft makes an official announcement before I get excited about anything.

According to The New York Times analysts are predicting a 2005 or 2006 release.

"I agree with you %100 it seems xbox owners have the most money to burn out of console owners. "

That makes no sense Topdawg. Working in a game store, I can flat out tell you PS2 owners have to have the most money to burn. Memory cards are $25 a pop (oh, wait, not needed on the Xbox, and the GC ones are cheaper), you have to buy a multitap for $35 (oh, wait, GC and Xbox do not need one), you need an adapter to go online (another $40 Xbox owners save), and last I checked Sony had a HD coming out at $100 (oh yeah, the Xbox has one of those as well).

Here's how it breaks down Xbox $179.99

PS2 $179.99 + $25 (mem card or $100 for upcoming hard drive) + $40 Broadband adapter + $35 for the multitap to play everyone's precious Madden in 4 player mode=$279.99 up to $364.99 just to do what the Xbox can out of the box. This isn't to start a system war or flames, but as someone who works in retail I just have to point out that your statement makes absolutely no sense.

I would agree with alot of these statements except the following:

I read funboy posts on Gamefaqs talking about the Sony/Nvidia thing right after Microsoft announce it was partnering with ATI. That whole rivalry crap heh. Sony has no reason at all to have Nvidia build the GPU for the next system.

I don't see how Microsofts next console will have superior hardware either. Every thing I have read states all the consoles will pretty much be close to equal next gen with no huge lead technology wise.

I also don't see how the gap between the PS2 and the Xbox will be *much* smaller either. Yes Microsoft will probably gain marketshare but not enough to make the difference between the two systems *small*.

I don't see why Nintendo will repeat it's numbers but Microsoft will gain, that's just goofy. If Nintendo comes out with an online plan next gen and puts their franchises on it, it wouldn't be good for Microsoft.

Memory Cards $25 PS2
Gamecubes are cheaper because they hold less data. Last time I checked Microsoft sells memory cards for the Xbox. You don't need them until you want to take a save with you to another xbox. But if you only play on your system I see the benefit.

PS2 Adapter 39.99

I don't see why your saying paying for the PS2 adapter costs more to get online than the Xbox. Xbox oweners save zilch when compared to the PS2 adapter. When you buy the adapter it's a one time fee and 99.9% of the games are free to play online. With the Xbox you get to pay a yearly $50 fee. So.. PS2 owners has the better deal between those two.

HD 99.99
The HD is being released because of FFXI no other reason. Most of the PS2 userbase won't bother buying the HD. The only game that requires the HD is FFXI at the moment and I don't see that changing anytime soon. Also technically the HD only costs $50 since it is pre-loaded with FFXI which would cost 49.99 normally at retail.

Both of these bundles below have the exact same functionality:

$179.99 Xbox System
$69.99 Xbox Live Starter Kit Version 3 ($49.99 annually)
$22.99 Xbox DVD playback kit *used at Gamespot(no reason to buy new)
$24.99 Memory card (don't see a 3rd party licensed one) (you'll need the memory card if you want to take your save to a friends house)
$89.97 x3 Microsoft Xbox Controller S

Total for Xbox after 6% sales tax: $411.21

Total with an extra 4 years of Xbox Live service:$623.16

$199.99 PS2 Online bundle
$19.99 PS2 Official Memory card (Nyko brand licensed by Sony)
$22.99 PS2 Multi Tap *used at Gamespot ( no reason to buy a new multi tap when a used one works exactly the same)(29.88 new at Wal-Mart)
$49.99 HD (half of the 99.99 price tag is the price of the pre-loaded FFXI game)
$59.97 x3 Official PS2 Controller (19.99 each)

Total for PS2 after 6% sales tax: $374.11

Total with the HD at $99.99 for the picky $427.11


Another thing is that Xbox live will be 49.99 all the time, it won't be discounted by Microsoft. PS2/Xbox Memory cards,PS2 multi tap and the Sony HD has or will have lower prices eventually.

Can you tell I have to much time on my hands? ;)

*updated with new prices on PS2 controller price and Xbox live starter kit version 3.

You know, I'm going to agree with that as well. The Xbox has gotten so much hype about how much more powerful it is, but in reality, it is only as powerful as fanboys make it out to be. The PS2 can do more FLOPS and is only 300MHz. The Xbox does half as many flops at over twice the computing power. The great thing about Sony consoles is the learning curve. Recently, Jak II was released and was regarded by many reviewers as "the best looking platformer on any console." This isn't so much a jab at Xbox as it is GC (with numerous Mario platformers). Of course, with KillZone comes out, Microsoft might be wondering what happened to all their power.

So at launch, the Xbox2 may be considered the most powerful, but as soon as developers master the Cell, Sony will again have the most powerful system in the end. Of course, power doesn't mean anything without games. :D

"PS2 Adapter 39.99

I don't see why your saying paying for the PS2 adapter costs more to get online than the Xbox. Xbox oweners save zilch when compared to the PS2 adapter. When you buy the adapter it's a one time fee and 99.9% of the games are free to play online. With the Xbox you get to pay a yearly $50 fee. So.. PS2 owners has the better deal between those two."

Pay attention to press releases. AT E3, both Sony and EA announced by the end of 2004, gamers would be paying monthly fees for their games (with the exception of the original SOCOM according to Sony). Sony did not give any pricing ranges, but my stores Sony rep has confirmed they will begin charging sometime next year (they are deciding on a fee for all games or a game to game fee like what EA is looking at as well [EA did say a PER TITLE fee as they are losing over $3 million a year on free servers, this was confirmed again in another release where they were explaining why they were not supporting Live, and confirmed again by MS in a press release explaining why EA could go to hell]). The PS2 online may be cheaper now, but next year it will not be as you will be paying at least TWO different companies to go online with their games instead of just one (assuming more companies don't jump on the pay to play Bandwagon).

Don't forget for "collectors", FFXI will also sell seperately for $49.99, plus the monthly fee required for it. SOCOM II will also be using the HD (though it is not required), as well a GT4 (they haven't said if it is required or for optional features).

Also, the Xbox is coming with $70 worth of free games right now (something Sony still refuses to do for it's customers).

BTW Galanthas, it is nice to have an intelligent conversation like this with someone, you should see how some of our customers react if you say one negative thing about Sony in our store, it is scary (though depending on my mood, it can also be fun to piss them off and make them leave cursing).

Well said.

All prices taken from Best Buy

$180 -- Xbox w/ Star Wars: The Clone Wars/Tetris Worlds Online Edition
$80 -- Microsoft Xbox Live Starter Kit Version 3.0 (with MechAssault & Headset)
$30 -- Microsoft DVD Movie Playback Kit
$30 x 3 -- Microsoft Xbox Controller S
---------------------------
$380

$180 -- PS2 with Free DVD Remote
$40 -- Sony Network Adapter
$20 -- Sony PlayStation 2 8MB Memory Card - Black
$20 x 3 -- Sony DualShock 2 Analog Controller
$35 -- Sony Multitap
---------------------------
$335

*Memory Card is not figured in for Xbox as that it optional that not everyone buys or will buy. The same goes for the PS2 hard drive.


If you don't want online capability, both systems are fairly even, pricewise. Otherwise, the Xbox has a $45 higher initial cost than the PS2, but also includes 3 games, a headset, & a hard drive. Longterm costs include $50 per 12 months for Live, although actual figures will be around $50 every 14-18 months if you figure in free months that you get from buying games.

The PS2 has an ongoing cost of having to purchase additional memory cards. There is also cost for the headset if you're inclined for online games. Online pricing plans for the PS2 are unknown at the moment. Currently, online access for games is free, but that will likely change by the end of the year.

Well said. I'm hesitant to buy any of the next gen consoles as I don't thin we'll see any signficant improvments in technology.

I mean with current technology (and the systems are under development right now) they can't make the games look a whole lot better than what we have now. I mean we'll get better character models, better textures etc. But I don't think it's anything that will make our jaws drop like seeing 3D graphics on the N64/PSX after being used to 2D on the SNES/Genesis. Probably not even to the extent of seeing the smoother 3D graphics this gen after being used to the blurry/jaggy 3D graphics on the N64/PSX respectively.

I basically agree with what George Harrison from NOA said in the interview posted here. Next gen won't be one by technology. All three will probably be about the same, and not a drastic improvement from this generation. As he said, it will take more than graphics to get gamers (including myself) to shell out the $ for a next gen console. It will hopefully come down to having the most AAA quality exclusive games. In reality, it will probably just come down to name recognition, with Sony winning in a landslide again.

Maybe you should tack on 3 PS2 games to even that up a bit.

They are gonna sell FFXI without the HD for the PS2? Where did you hear that? The only place I see it listed by itself is www.ebgames.com and they are notorious for getting dates and other things wrong. All the previews/news I have read never had said it would be sold without the HD only that it would come pre-installed on it. It requires the HD so if that is true, that would be kinda misleading on SquareEnix's and Sony's part.

No chance what so ever of Gran Turismo 4 requiring the Hard drive, you can quote me. ;)

I don't think it's a matter of Sony refusing to package $70 worth of software, just that they don't have to, to sell their console at the moment.

I'm talking right now and for the near future about no online fee's besides Everquest type games. Even if/when online fees come about we don't know what the prices will be.

I knew about EA thinking of charging in the future but this is the first time I have heard it about Sony regarding any game besides Everquest and it's type. Mind pointing me to a press release with Sony saying that so I can be better inform on that hehe.

Also I didn't mean to imply, that XBL is horrible just that I just don't think it's the right way to go about online for consoles. Just looking at what they did with XSN and Sega shows you it's not the right way to go about it for other publishers.

Sony's way is no where near perfect either though, I just happen to think it's the lesser of two evils between the two.

I have considered applying to Game stores on a number of occasions over the years but then I remember the dumb people that I always saw coming into a local EB I use to frequent. I would be fired within a week most likely because I would have went off on a couple of morons heh.