Sony and nVidia are to co-develop a graphics engine to power graphics cards and entertainment consoles.
The chip will be used in nVidia's GeForce cards which will power forthcoming consumer devices from Sony, almost certainly including the Playstation 3 console.
"In the future, the experience of computer entertainment systems and broadband-ready PCs will be fused together to generate and transfer multi-streams of rich content simultaneously," said Ken Kutaragi, president and group chief executive at Sony Computer Entertainment.
"Our collaboration includes not only the chip development, but a variety of graphics development tools and middleware essential for efficient content creation."
The custom GPU will be manufactured at Sony Group's Nagasaki Fab2 and at a joint Toshiba and Sony fabrication facility.
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