Intel wins X-Box deal at 11th hour

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13 October 2000 03:00 PM
Tags: box, amd, intel, microsoft, rumor, cpu, specifics, derivative
One of the biggest unanswered questions surrounding Microsoft's announcement of its X-Box gaming console is how Intel stole Advanced Micro Devices's nearly guaranteed spot as the primary chip vendor for the system.

While industry watchers are speculating that Intel simply undercut AMD's Athlon price with its Pentium III, Microsoft's role in playing one company off against the other remains shrouded in mystery.

Intel, for its part, is guardedly gloating, but not providing specifics.

"Obviously we're happy that it's one of our processors," an Intel spokesman said. He added that he was aware of journalists' "speculation" that AMD's Athlon would be the X-Box CPU, but said, "I don't think that anybody should be surprised that when Microsoft went out to design a high-performance box they came to us for a processor."

AMD, on the other hand, is licking its wounds.

"Our focus is on mainstream PC processors and gaining share in the high-end performance spot where margins are higher. X-Box would have been good incremental business, and we're always looking for ways to work with Microsoft," an AMD spokesman said. "But we were not prepared to get into a sort of scorched-earth price war with Intel to get their business. The net result is that we don't have the business."

Rumors aplenty, but no comment
Rumors have been circulating for a year as to the specifics of Microsoft's X-Box announcement, which finally came Friday at the Game Developers Conference in San Jose, California. In the weeks building up to the launch, industry sources claimed it was all but certain that the CPU powering the box would come from AMD. As guesses swirled, Microsoft steadfastly declined to comment.

When Microsoft officially lifted the X-Box veil on Friday, it announced the CPU would be a 600MHz Pentium III from Intel. The graphics chip inside the system will be the custom-designed 300MHz X-Chip co-designed by Microsoft and Nvidia.

Rumors also had the X-Box based on some type of Microsoft Windows CE derivative. Instead, the gaming system, due out in the third quarter of 2001, will run a derivative of Windows 2000, sources said.

Additional reporting by Mary Jo Foley, ZDNet News.

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