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.”