This is a great older article (5/1/2006) about the xBox 360 project cycle. It reads a lot like a project post mortem on the xBox 360 design process. The article discusses how IBM scored the Microsoft contract for xBox 360 chips

I love an article that teaches you about the company by presenting the facts, but doing it by telling a story. I understand what went on at IBM and why IBM scored the trifecta in gaming chip designs.

Microsoft’s current vendors, Intel and Nvidia, didn’t like the idea that Microsoft would own the IP they created. For Intel, allowing Microsoft to take the x86 design to another manufacturer was as troubling as signing away the rights to Windows would be to Microsoft. Nvidia was willing to do the work, but if it had to deviate from its road map for PC graphics chips in order to tailor a chip for a game box, then it wanted to get paid for it. Microsoft didn’t want to pay that high a price. “It wasn’t a good deal,” says Jen Hsun-Huang, CEO of Nvidia. Microsoft had also been through a painful arbitration on pricing for the original Xbox graphics chips.

IBM, on the other hand, had started a chip engineering services business and was perfectly willing to customize a PowerPC design for Microsoft, says Jim Comfort, an IBM vice president. At first IBM didn’t believe that Microsoft wanted to work together, given a history of rancor dating back to the DOS and OS/2 operating systems in the 1980s. Moreover, IBM was working for Microsoft rivals Sony and Nintendo. But Microsoft pressed IBM for its views on multicore chips and discovered that Big Blue was ahead of Intel in thinking about these kinds of designs.

When Bill Adamec, a Microsoft program manager, traveled to IBM’s chip design campus, in Rochester, M.N., he did a double take when he arrived at the meeting room where 26 engineers were waiting for him. Although IBM had reservations about Microsoft’s schedule, the company was clearly serious.

and later…

Leslie Leland, the hardware evaluation director, says she felt “terrible” about the shortage and that Microsoft would strive to get a box into the hands of every consumer who wanted one. But Greg Gibson, the system designer, says that Microsoft could have worse problems on its hands than a shortage. The IBM and ATI teams had outdone themselves.

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