NVIDIA MAY HAVE BURNT ITS FINGERS over its deal with Microsoft to supply chips for the original Xbox. Reports indicate that nVidia is less than enthusiastic about supplying chips for the Xbox 2. Watching the figures, it comes as no great surprise that nVidia might be backing away from future deals. Microsoft is losing money hand over fist in its Home and Entertainment division which is responsible for the Xbox and component suppliers are facing the pinch as well. nVidia itself is in legal arbitration with Microsoft over the cost of components.
With Microsoft having lost $348million on its Xbox gamble in the last quarter, any company looking at supplying components for Xbox 2 will be checking the sums very carefully. Bluff sales talk of beating Sony's Playstation 2 has proved to be a complete fantasy. Given the technology that Sony is pouring into Playstation 3, Xbox 2 will have to be something incredible. Assuming it ever makes it off the drawing board.
Over at SiliconValley.com, nVidia CEO Jen-Hsun Huang sounded a very cautious note, "we would be delighted to work with Microsoft on the next Xbox, but we are a company with many opportunities." Which sounds to us like he really isn't interested in playing ball.
Huang is reported to have said that nVidia's main focus is the battle with ATI. Given that ATI is hotly tipped as the supplier of the graphics for Xbox 2, we can't help but wonder if letting them win the contract with Microsoft might be a wise move on nVidia's part. ATI would be bogged down with work on that platform while nVidia concentrated on regaining the lead in PC graphics
News source: The Inq
