NVIDIA Corp., a leading graphics chip designer, and Sony Computer Entertainment Inc., the maker of Sony PlayStation consoles, supporting services and software, today said they had been jointly developing the graphics engine to power Sony’s next-generation PlayStation 3 console. The announcement means a substantial design win for NVIDIA, but a tremendous technology flaw for Sony, who was known to be designer of the graphics engine for its next console.

Sony PlayStation 3’s Graphics Engine – Made in 2 Years at NVIDIA

The companies are reportedly jointly developing a custom graphics processing unit incorporating NVIDIA’s “next-generation GeForce” and Sony’s “system solutions” for the next-generation computer entertainment systems featuring the Cell processor. Usually Sony refers PlayStation 3 with the term “next-generation computer entertainment system”.

This collaboration is made under a broad, multi-year, royalty-bearing agreement. The powerful custom GPU will be the graphics and image processing foundation for a broad range of applications from computer entertainment to broadband applications. The agreement will encompass future Sony digital consumer electronics products. Under the terms of the agreement NVIDIA will also help Sony to establish foundation for game development for the custom-GPU, particularly the firms are expected to release a variety of graphics development tools and middleware, essential for efficient content creation.

Jen-Hsun Huang, NVIDIA’s CEO and President said the two companies has worked closely “over the past two years”  on the “next-generation computer entertainment system”. He said the company had been designing its next-generation GeForce GPU in parallel. It is unclear which chip Mr. Huang referred. NVIDIA is currently developing graphics processors code-named NV47 and NV50. The latter was recently rumoured to be cancelled, though.

An NVIDIA spokesperson contacted by X-bit labs did not immediately returned enquiry seeking for comment on whether the custom-GPU had been fully developed and whether the chip has the architecture and functionality similar to current or next-generation visual processing units from NVIDIA Corp..

Custom-GPU to be Made at 65nm

The custom GPU will be manufactured at Sony Group’s Nagasaki Fab2 as well as OTSS (joint fabrication facility of Toshiba and Sony). The Sony’s Nagasaki Fab2 facility is known to use 65nm SOI fabrication process jointly developed by IBM. The fab is expected to be able to produce 15 thousand of 300mm wafers a month.

Sony’s Own “New Graphics Synthesizer” Scrapped

While the current announcement outlines the strength graphics companies have today, it also sketches certain problems that arise during graphics sub-systems developed by non-graphics companies, such as Sony Computer Entertainment Inc., who developed Graphics Synthesizer, a powerful graphics processor, for the PlayStation 2 itself.

Sony Computer Entertainment Inc. first talked about its graphics processor for the next-generation console PlayStation 3 at International Solid-State Circuits Conference in early February, 2001. The chip, made using 0.18 micron process technology, could process 75 million of polygons per second, had a pixel fill-rate of 1.2 – 2.6 gigapixels per second s and contained 256Mb on-chip embedded DRAM.

While the graphics processor, that was developed in traditions with other graphics chips for consoles, was spectacular in early 2001, it looks rather pale in the light of Xbox 2 visual processing unit that is expected to be able to process up to 500 million of polygons per second and have fillrate of about 4 gigapixels per second. Furthermore, if the GPU that NVIDIA is developing, or has developed, for Sony features more PC-like architecture, this could potentially ease the life of game developers, especially those seeking to make games for three major markets: PC, Xbox and PlayStation.

PlayStation 1, 2 Compatibility Unclear

With the adoption of NVIDIA-based graphics processing technologies it becomes unclear whether Sony is able to maintain backward compatibility of the console with the previous generation games. Typically console makers tend to maintain compatibility, as end-users are reluctant to keep the previous-generation electronics in addition to novelties.

Sony PlayStation 3 is expected to be commercially launched in 2006, roughly 6 years after the PlayStation 2 console emerged and 10 years after the original PlayStation was introduced.

NVIDIA’s Revenues See Positive Impact of the Sony Deal

NVIDIA Corp, whose 20% of revenues come from its Xbox business, is likely to enjoy the collaboration with Sony Computer Entertainment Inc., as it is likely to offset the declining Xbox revenues because of Microsoft’s shift to Xbox 2 console with custom-VPU developed by ATI Technologies inside.

At press time NVIDIA’s stock was $23.39, up 7.69%, or $1.67. Meanwhile, shares of Sony were down $0.37 cents, or 1%, to $36.38 in a recent trading.

Specific terms of the “broad, multi-year, royalty-bearing agreement” were not disclosed.