Rumours about ATI Technologies possibly working on the next-generation XBOX console from Microsoft continue to float around the Web. For instance, Spong.com quotes an unnamed NVIDIA source, who says that ATI is developing the core-logic for the XBOX 2. Keeping in mind that ATI Technologies has limited resources, I think if the company is developing the next-generation XBOX, it is not working on Nintendo’s next-generation console at the same time possibly because of the fact that there will be no consoles from Nintendo in future.

Reportedly, NVIDIA did not want to meet Microsoft’s demands for the design of the XBOX 2 and there was no sense to partner on the project for the Santa Clara, California-based company. The unnamed source close to NVIDIA confirmed that ATI was working with Microsoft on the next-generation XBOX console. Though, according to the web-site and its source, the final decision on graphics and core-logic vendor has not been made yet.

Officials from ATI Technologies, NVIDIA and Microsoft have never officially confirmed or denied any information about XBOX 2. All the details published now are strictly unofficial and may not reflect the real situation.

Additionally, this week Microsoft’s CEO told Japanese journalists these week that XBOX sales in Japan were not strong. He also said that the next-generation XBOX console (known as XBOX 2) would appear in 2006. Steve Ballmer also denied rumours about Microsoft’s possible investments into Sega.

In case ATI Technologies is really working with Microsoft on the next-generation mind-blowing XBOX, I doubt the company may also work with Nintendo on the next-generation GAMECUBE console. Since console business is a tough one, Nintendo may actually withdraw itself from developing and selling consoles in order to concentrate on software development and hand-held games. Nintendo may certainly turn to other developers of graphics processors and logic from ATI, though, it needs the possibly GAMECUBE 2 to remain backwards compatible with the original Nintendo GAMECUBE and this may force the Japanese company to stick to ATI Technologies.

Stay tuned with us and we will bring you the latest details on the matter.