OK! Let me add my bit here.....
Link
Nvidia scores: Sony to use its chips in Playstation 3
Wed Dec 8, 6:47 AM ET Technology - SiliconValley.com
By Dean Takahashi, Mercury News
In a deal worth a potential $1 billion to Nvidia, Sony announced Tuesday that it will use the Silicon Valley company's graphics chips in the upcoming PlayStation 3 video game console.
Licensing revenue from the deal will likely become an important source of revenue for Santa Clara-based Nvidia at a time when income from a deal to supply chips for Microsoft's Xbox (news - web sites) video-game console winds down. Moreover, the Sony agreement ensures that Nvidia's products will be at the heart of consumer electronics for years to come.
American Technology Research analyst Erach Desai wrote that he believes Sony will use the components for the PlayStation 3 in other living-room devices, increasing the odds that Nvidia's chips will be built into a multitude of consumer electronics gadgets.
"It's a big deal for us," said Dan Vivoli, Nvidia's executive vice president of marketing. "
This chip is going to be far more powerful than anything we've done before (obviously, it has to be). And the whole console market is very exciting."
Since 2001, Nvidia has generated nearly $1 billion in revenue from its deal to provide graphics and communications chips for the Xbox. In some quarters, the Xbox has accounted for about 20 percent of total Nvidia revenue.
Sony's PlayStation 2 (news - web sites) has outsold the Xbox 5-to-1, with more than 74 million machines sold since 2001.
But Nvidia may not make as much revenue from the PlayStation 3 as it did with Xbox.
That's because Nvidia is designing the graphics chip for Sony to manufacture. Since Nvidia makes a graphics chip that it sells to Microsoft for the Xbox, the company collects a higher fee per chip. However, the Sony deal likely offers rich profits from royalties for Nvidia, analysts said.
Nvidia has been reluctant to do such engineering deals in the past. That has allowed archrival ATI Technologies to score contracts to supply graphics chips for Xbox 2 and Nintendo (news - web sites)'s next-generation video-game console.
Vivoli declined to reveal details of the Sony deal. But the PlayStation 3 is widely expected to launch in 2006. That means Nvidia has perhaps as many as two years to finalize the design.
Vivoli said Nvidia has been designing the core of the chip for the past 18 months.
He said the chip for Sony will be a custom chip but will be based on the architecture that Nvidia was creating for its next-generation PC graphics chip. (so, Not CELL based?)
Nvidia and Sony were in talks for two years, Vivoli said. He noted that Nvidia Chief Executive Jen-Hsun Huang and Sony Vice Chairman Ken Kutaragi, who is spearheading the PlayStation 3 effort, have known each other for some time.
"This is a natural alliance," he said.
American Technology Research changed its rating on Nvidia's stock from hold to buy after the deal was announced.
Tim Sweeney, CEO of EpicGames in Raleigh, N.C., and a well-known game developer, greeted the Nvidia-Sony deal with relief 
. He was worried that Sony's next-generation machine might be hard for game developers to program, much like the PlayStation 2 was. Nvidia's chip design is familiar to game developers.
"This eliminates a lot of uncertainty about the architecture," he said. "We're thrilled to see Nvidia in there." 
