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IBM Wins $1bn Deal to Supply Nintendo With PowerPC Chips.

Giving a potentially massive boost to IBM Corp's embedded PowerPC business, Nintendo Co has chosen the chip as the CPU for its planned N2000 video console, the successor to N64, in what is potentially a $1bn deal. Nintendo will also use graphics chips from ArtX Inc and DVD drives from Matsushita Electric Industrial Co in the new machine, codenamed Dolphin.

IBM will supply a custom designed 400MHz PowerPC chip it's calling "Gekko" which uses the company's 0.18 micron copper technology, for the console. It says the chip, currently in "advanced stages of development," is designed to be more powerful than those found in any current or planned home video entertainment systems. IBM will design, manufacture and ship the processors to Nintendo, and says the two companies are exploring the potential to use IBM technology in other Nintendo products as well.

Nintendo is also using a 128-bit, 200MHz chip from ArtX Inc for the all-important graphics processing. ArtX, based in Palo Alto, California, was formed in September 1997 by a group of employees from Silicon Graphics Inc, and last year was the subject of a lawsuit from SGI. The lawsuit described ArtX as a company that "was designed to take the Nintendo graphics business away from SGI." The suit was eventually resolved, although terms of the agreement were not disclosed. IBM's involvement is bad news for SGI spin-off MIPS Technologies Inc, which derives around 75% of its revenues from chips used in the current N64. MIPS shares, however, had actually risen 16.5% to $5.93 by close of play on Wednesday. The company pointed out that its chips were still being used for current Sony Playstations, and as the basis for the "Emotion" chip being used by Sony Computer Entertainment for the next generation PlayStation 2. MIPS also hopes to see increased sales from the set top box market.

As well as supplying the DVD drives, Matsushita will work with Nintendo to develop home networking products based around the console. It will also release its own version of the console under its Panasonic brandname, adding internet connectivity and DVD video and music capabilities to the basic games functionality.

Nintendo is the last of the big three console makers to announce a console. Sega Enterprises Ltd has already launched its Dreamcast machine and Sony has announced the PlayStation 2, which is due out this winter in Japan and towards the end of next year worldwide. Nintendo's N2000 will be launched worldwide, rather than introduced first in the Japanese marketplace, the company said.
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Publication:Computergram International
Geographic Code:1USA
Date:May 13, 1999
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