RealTime IT News

ATI Edges out Nvidia for Xbox Deal

Confirming speculation of a falling out between graphics chip maker Nvidia and software titan Microsoft , fabless graphics chip maker ATI Technologies Thursday announced that it had secured the contract to develop graphics chips for Microsoft's next-generation Xbox gaming consoles.

"We selected ATI after reviewing the top graphics technologies in development and determining that ATI's technical vision fits perfectly with the future direction of Xbox," Robbie Bach, senior vice president of the Home and Entertainment Division at Microsoft, said in a statement Thursday.

Financial terms of the partnership were not disclosed.

ATI jousts with Nvidia for leadership in the space, and already counts Nintendo as a customer with the GameCube console, which competes with Xbox for second place in the console market behind market-leader Sony. But Nintendo recently announced it had halted production of GameCube until the fall, with hopes of moving out stock already sitting in warehouses.

ATI Thursday boasted that the Microsoft win furthers its efforts to take on Nvidia.

"Our success working with Microsoft in the past gives us great confidence as we move forward, and our broad experience and wealth of engineering resources will ensure that we deliver," ATI Chairman and CEO K. Y. Ho said. "This agreement cements ATI's position as the prime graphics supplier for the future of the games industry."