Of Sony’s (SNE) many mistakes with the PS3 — too high a price, reliance on Blu-ray as a selling point, few exclusive titles — this might be the most embarrassing: Sony basically helped underwrite a lot of the research that its arch-rival, Microsoft (MSFT), used in the Xbox 360.
That’s what IBM (IBM) engineer David Shippy and Mickie Phipps, who helped design the all-important CPU chips for both systems, say in their new book “The Race for a New Game Machine: Creating the Chips Inside the XBox 360 and the Playstation 3.”
Sony hired IBM to design the “Cell” processor, the brains of the PS3. But they didn’t include a non-compete clause.
And along came Microsoft:
WSJ: 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 video game-console competitor. The result was that Sony’s R&D money was spent creating a component for Microsoft to use against it.
Mr. Shippy and Ms. Phipps detail the resulting absurdity: IBM employees hiding their work from Sony and Toshiba engineers in the cubicles next to them; the Xbox chip being tested a few floors above the Cell design teams. Mr. Shippy says that he felt “contaminated” as he sat down with the Microsoft engineers, helping them to sketch out their architectural requirements with lessons learned from his earlier work on Playstation.
The deal only got worse for Sony. Both designs were delivered on time to IBM’s manufacturing division, but there was a problem with the first chip run. Microsoft had had the foresight to order backup manufacturing capacity from a third party. Sony did not and had to wait another six weeks to get their first chips. So Microsoft actually got the chip that Sony helped design before Sony did. In the end, Microsoft’s Xbox 360 hit its target launch in November 2005, becoming its own success. Because of various delays, the Playstation 3 was pushed back a full year
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