Microsoft Corp. has started to ship its latest Xbox 360 game consoles with more affordable central processing units made using 65nm process technology, suspect end-users among Xbox community members. If the information is correct, then it means that the company’s production costs for the Xbox 360 are now lower than previously.

According to pictures posted by gamers from Xbox community forums, there are Microsoft Xbox 360 game consoles on the market that employ code-named Falcon central processing units (CPUs) made using 65nm process technology. The new  custom PowerPC-based chips feature the same three processing engines as the initial microprocessors for Xbox 360 which were produced using 90nm process technology, but are believed to be cooler and cheaper to produce.

The image of the new CPUs reveal that the chip itself is considerably smaller compared to the first version of the XCPU, which is sometimes called IBM Xenon. Given that thinner fabrication processes allow to make smaller chips, it is highly likely that the new processor is indeed made using 65nm process technology, this, is more affordable to Microsoft.

Xbox 360 microprocessor made using 65nm process technology.
Photo by an Xbox.com forum member JWSpeed

Potentially, cheaper components allow game console developers to reduce pricing of their products to end-users without having to suffer a massive loss on each console sold. Initially IBM’s triple-core microprocessor cost Microsoft about $106, but a year after it managed to reduce the pricing by 40% thanks to improved yields. The 65nm chip should cost even less to make.

Xbox 360 microprocessor made using 90nm process technology.
Photo by Xbox 360-Hacks web-site

Microsoft Xbox 360 console is based around microprocessor developed by IBM, high-definition visual processing unit designed by ATI Technologies, I/O controller engineered by SiS and some other key components. The gaming machine provides a broad set of multimedia capabilities in addition to games. The game console also features an HD DVD drive and other peripherals that should be acquired separately.