According to Gamesindustry.biz Nvidia has revealed they have been working with Sony on the Playstation 3 hardware. According to the report, Nvidia is in fact working on some sort of Geforce technology to be used in the new Playstation. This new co-processor will work alongside Sony's own "Cell" processor in the new machine.
Nvidia had previously worked with Microsoft to make the underlying graphics technology for the original X-Box. ATI had been picked by Microsoft, to develop the next-generation X-Box technology last August. This is a major deal for Nvidia and Sony. As for the graphics hardware itself, it is described as a "graphics and image processing foundation for a broad range of applications from computer entertainment to broadband applications."
News source: Gamesindustry.biz
