TMO Reports - Xbox Moves To IBM; PowerPC In Microsoft's Future?

by , 10:00 AM EST, November 4th, 2003

Monday's announcement that Microsoft Corp. will use International Business Machines Corp.'s semiconductor technology in its next generation Xbox videogame system has left industry watchers with more questions than answers. Up for debate is whether the new device will use a PowerPC chip at its core, similar to that used in the PowerMac G5. If true, Apple could indirectly reap a financial benefit on technology it has helped develop, if not just accolades that Microsoft is using a chip it helped develop.

The two companies disclosed few specifics of their plans, other than that Microsoft has licensed chip technology from IBM. Beyond that, neither Microsoft nor IBM would further describe the console or its launch date. Microsoft has reportedly decided to call the new device Xbox Next and industry watchers believe the new device will not see store shelves until 2005.

"It certainly is an interesting announcement," Peter Glaskowsky, editor in chief of Microprocessor Report told The Mac Observer. "It's a significant development for IBM."

"IBM has landed the biggest coup of them all," said Rick Doherty, an analyst at the Envisioneering Group. IBM now has alliances with all three game console makers -- Sony, Microsoft and Nintendo.

Few details leave many questions

But because few details were released, dozens of questions are open to debate, ranging from if Microsoft will use an IBM processor as the central 'brains' of the new Xbox, to will a version of the PowerPC used in Macs be used.

"There are a lot of questions that are still open in our minds," said Glaskowsky. 'We don't know what IBM processor is likely to be involved, we don't know what IBM process for making the chips will be used, we don't know if all the chips in the Xbox will be made by IBM or just some of them and assuming they will use a PowerPC chip in it, will that be used as the central processor or an accessory processor of some kind? We have many questions."

People familiar with the agreement have told The Mac Observer IBM has been selected to build the central microprocessor at the heart of the next Xbox. If true, the big remaining question is which IBM processor will be used. Speculation is rampant.

"The processor might be the Power PC 970, which is the IBM processor that is in the PowerMac G5 system," said Glaskowsky. "Would it be that processor or would it be a similar processor based on the Power 5 core they recently introduced? We don't know."

Glaskowsky highlighted one part of the press release from IBM and Microsoft as an important clue to what processor technology might be used in the new Xbox. "The language was that the Xbox would be 'based on the latest in IBM's family of state-of-the-art processor'. That would mean to me that it's either the current 970 technology, or the new Power 5 core technology that will be available in the next year in plenty of time for use in the new device."

Backward compatibility a key component

Some experts are skeptical that Microsoft would use a totally different family for its central processor and throw away a major selling point - customers being able to use games from older Xbox systems in the new Xbox Next.

"It's unlikely that Microsoft would have given up on software compatibility with the current Xbox and you're not going to get that with a PowerPC processor," said Glaskowsky.

Kevin Krewell, an analyst with Micro Design Resources, believes that Microsoft will be able to make the Xbox Next compatible with the original, despite using a new chip, by translating code. Technology to translate that code could come from a familiar name to Mac users -- Connectix. The makers of Virtual PC, which allows Mac users to run Windows, was acquired by Microsoft in January. Krewell believes Connectix is hard at work using its technology to make older software that was written for the Intel Pentium processor used in today's Xbox, work with Xbox Next and the PowerPC processor.

But Glaskowsky has doubts emulation will work. "I don't think even emulation will be a very good answer because that doesn't tend to give you the right performance characteristics," he said. Krewell disagrees. "If Microsoft uses a PowerPC processor, I have no doubt it's fast enough to run older Xbox games at a reasonable speed even though the code is being translated."

For Apple, a twist of fate

Monday's announcement will ultimately be good for the 'PowerPC consortium' made up of IBM, Motorola and Apple, who originally partnered and developed the nucleus of the PowerPC architecture Macintosh computers use today.

Although details of just how each consortium member would financially benefit is not known, "there is little doubt Microsoft will be indirectly feeding Apple financially," said Eric Bogosian, a former chip technology analyst with the Vanguard Group.

"Inside Apple, they have got to be standing tall and proud over this announcement. For an arch rival like Microsoft to see the benefits of PowerPC technology and use it is a feather in Apple's cap."

While there might not be as much financial return in a deal like this for Apple, Bogosian believes it's more about prestige. "It says to the industry and consumers, 'We (Apple) used the PowerPC in our computers and Microsoft is admitting its a viable and powerful platform to build on. We've been vilified.'"