AMD Gets XBox 2?

To be discussing the XBox 2 just as XBox launches in Europe, may seem hasty.Microsoft think tanks however, are well known for planning ahead. Their main concern when thinking of the next generation XBox is finding ways of keeping the price down and that may take a lot of time to achieve.
To that effect, nearly all suppliers of XBox hardware are currently engaged in a frenzied bidding war, sweating it out while the Man is considering all options.
There are two main schools of thought, or rumor, as to what Microsoft will do.

One, the most unlikely of the two, suggests that Microsoft has already begun investigating ways of actually producing the hardware itself. I can almost hear the sighs but two main points need considertion. Firstly, Microsoft can do it and secondly they have tried it before. In 1996, Microsoft much to Intel's groaning, put a team to work on a graphics chip codenamed Talisman. Although that plan never reached fruition, the information needed and much of the necessary infrastructure were created. It has also been suggested that Microsoft have chip designers working in teams on several Microsoft gaming projects. Finally there's Robbie Bach, Microsoft's "chief Xbox officer" who goes around claiming that the XBox will recieve billions of US dollars of investement and that 2,000 people are working on it and future projects.
It still sounds however, that such a plan would only be a last resort if no other agreement could be reached. Such announcements, as Robbie Bach's, could have the purpose of pressuring independent Asian contractors and the other big hardware boys into lowering their offers.

The second set of rumors suggests that Microsoft will simply go with the cheaper options. In a, very unofficial, note to its customers Microsoft claims that AMD is in and Intel is out. Rumors also suggest that ATI, VIA and many others are fighting it out on the next generation XBox battlefront.

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