Apple's decision to adopt PowerPC processors for the Mac appears maybe to have been ahead of its time, with news today of Microsoft's move to use these chips in its future state-of-the-art Xbox console.

The company announced last night that future Xboxes will use IBM processors, with Microsoft's current Xbox chip supplier and long-standing partner Intel presumably being shown the back door.

A Microsoft spokesman said: "Intel is still our current partner for the Xbox, but we haven't announced what role, if any, Intel will play in the future." Analysts expect next-generation Xboxes will ship in 2005 or 2006, though Microsoft has not committed to this.

Microsoft has agreed to license IBM’s processor technology for future versions of the console – and developers hired by the company when it bought emulation software developer Connectix may have a part to play in the project.

IBM makes PowerPC-based processors, which Mac users well-know are different from the x86 chips made by Intel and currently used in Xbox. Traditionally, developers have had to tailor code for specific operating systems and processor platforms.


This raises a challenge for Microsoft – in order to ensure older Xbox games remain compatible with the new consoles, the company will either have to embed a chip based on the x86 instruction set into the next version of the Xbox, or use emulation technology, Kevin Krewell, senior editor of the Microprocessor Report explained.

Microsoft could emulate x86 compatibility using software and engineering expertise it acquired from Connectix earlier this year. If it does so, it wouldn't be the first time that leading former Mac developers have been employed to help transform Xbox into a successful product.

In 1999, Microsoft acquired legendary Mac games development house, Bungie Studios, which was then working on a game called Halo. Halo was then rebuilt and released for Xbox, and became the market-leading game on the platform, selling three million copies and helping to propel Xbox sales.

It's a big deal for Apple's leading processor supplier, IBM. With the news, three major gaming-console vendors have now adopted IBM technology.

Sony, Toshiba and IBM are working together now to develop the processor technology for the third-generation PlayStation console (Sony today dropped PlayStation 2 prices in Japan); IBM also provides the chip technology for Nintendo's GameCube.

'Major blow'

"It's a major blow for the Intel architecture moving forward for gaming entertainment," said Richard Doherty, research director at The Envisioneering Group.

It's also a sign of changing times. As convergence technologies inspire innovation in the consumer electronics market, and leading vendors agree that the battle in consumer's homes today is to dominate the "digital hub", the lack of Intel technology within the gaming consoles market leaves a gap in Intel's attempt to dominate the digital home, Doherty said.

Bernie Meyerson, IBM fellow and chief technologist for IBM's Technology Group, observed: "IBM's advanced chip technologies are in demand across a wide range of industries and applications. We're excited to be working on a project of this magnitude and that Microsoft has chosen IBM to provide technologies that will power future consumer devices and expand the boundaries of what's possible in entertainment."

IBM recently filed plans with local authorities to expand its chip manufacturing facility in East Fishkill, New York – where it makes G5 processors for Power Macs.