In 2001, Sony partnered with Toshiba and IBM to create the Cell processor. Sony, Toshiba and IBM spent $400 million to design this processor. In late 2002, Microsoft also needed a chip for their then unnamed new gaming console and contacted IBM about it. In 2003, IBM showed Microsoft the specs of the in-development Cell processor. Microsoft quickly took the chance and contracted with IBM to have a chip like that built for them.
The result is what we know now as the XBOX 360 (or the red ring of death :|).

For the system's ambitious third iteration, though, Sony wanted an entirely new processing architecture. Most computer processing chips are built on the foundations of the chips that are already in use. Designing a new chip from the ground up is a costly and time-intensive process. So in 2001 Sony partnered with Toshiba and IBM to create the so-called Cell processor -- a chip so powerful that it would redefine PC-scale power.

David Shippy, as it happens, was in charge of designing the brains of the Cell, the processing core. In "The Race for a New Game Machine," he and his co-worker Mickie Phipps tell the story of the whole effort to build the Cell. They also describe how the project went off the rails, ending up with IBM engineers creating the processing chips for two rival videogame consoles and, along the way, delivering to Sony Corp. one of its greatest business failures.

When the companies entered into their partnership in 2001, Sony, Toshiba and IBM committed themselves to spending $400 million over five years to design the Cell, not counting the millions of dollars it would take to build two production facilities for making the chip itself. IBM provided the bulk of the manpower, with the design team headquartered at its Austin, Texas, offices. Sony and Toshiba sent teams of engineers to Austin to live and work with their partners in an effort to have the Cell ready for the Playstation 3's target launch, Christmas 2005.

But a funny thing happened along the way: A new "partner" entered the picture. In late 2002, Microsoft approached IBM about making the chip for Microsoft's rival game console, the (as yet unnamed) Xbox 360. In 2003, IBM's Adam Bennett showed Microsoft specs for the still-in-development Cell core. Microsoft was interested and contracted with IBM for their own chip, to be built around the core that IBM was still building with Sony.

All three of the original partners had agreed that IBM would eventually sell the Cell to other clients. But it does not seem to have occurred to Sony that IBM would sell key parts of the Cell before it was complete and to Sony's primary videogame-console competitor. The result was that Sony's R&D money was spent creating a component for Microsoft to use against it.

StarJet via online.wsj.com »