"We're combining Microsoft's vision, software experience, and R&D resources with ATI's pioneering leadership in graphics technologies to create innovative future Xbox products and services that meet the lifestyle needs of consumers in the Digital Decade," said Robbie Bach, senior vice president of the Home and Entertainment Division at Microsoft, in a statement. "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."

The deal is something of a surprise given that ATI's chief rival, Nvidia Corp., has provided the graphics processor for the Xbox since Microsoft first entered the gaming market as an OEM several years ago.

"Nvidia continues to be a key supplier for the Xbox and technology provider for current products and services," said a Microsoft spokeswoman, who declined to say whether Nvidia would now share a role in Microsoft's plans for next-generation Xbox systems or be replaced by its competitor.

The spokeswoman also declined to detail the kinds of services or products that ATI would provide.

"Microsoft shares our passion for cutting-edge innovation," said K. Y. Ho, chairman and chief executive of ATI, Markham, Ontario, in a statement. "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."

By: DocMemory
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