The most curious thing about the choice of IBM is that the firm is already producing processors for Nintendo and is designing the next generation of 'Cell' processors for the Playstation 3. So IBM effectively knows what all of the key players are up to, something that might not sit comfortably with the CEOs of the three main console firms.

The Real Threat
The biggest firm in console gaming by far is Sony with its Playstation 2. The juiciest leaks that have appeared about the Cell processor put that architecture a country mile ahead of any other mainstream processor performance wise. It looks likely to offer capabilities that will be well beyond the AMD64 and PowerPC variants when it is released, even taking into account the latter processors improving considerably over the next couple of years.

That leaves Microsoft with a big problem. If it chooses PowerPC or AMD64, it might end up trying to sell an Xbox 2 that at best offers only half the performance of the Playstation 3. A far from appetising thought. But then you need to think about just why IBM and Toshiba are involved with the Cell processor in the first place. Both firms are aiming to use it in high-power multiprocessor systems. In theory at least, both firms could supply Cell processor systems to whichever companies they liked. So then you end up with the last major possibility, that Microsoft could well have chosen IBM to manufacture processors for the Xbox 2 because it has somehow persuaded the firm to supply Cell processors for the new system.

There're no two ways around it, Sony would be livid if that was the case but it would also be stuck. Microsoft has more than enough money to step into the breach if Sony decided to walk away from dealing with IBM over that happening. That's something Sony couldn't afford to allow because it would mean the firm scrabbling around trying to find a replacement architecture and Xbox 2 getting the Cell technology all to itself, with all that entails.