New Book Explains How Sony Unknowingly Helped Microsoft
In 2001, Sony partnered with Toshiba and IBM to create the Cell processor for its upcoming PlayStation 3 console. Sony wanted a brand new processing architecture, so the three companies committed themselves to spending $400 million over five years to design the Cell, not to mention the additional costs of building two production facilities. The target launch date for the PlayStation 3 was Christmas 2005. Little did Sony know that in late 2002, IBM would be approached by Microsoft to create the chip for its upcoming rival game console, the soon-to-be-named Xbox 360. IBM's Adam Bennett showed Microsoft the specs for the Cell processor and told IBM to create a chip based around that core. The main benefit? Microsoft avoided a bulk of the R&D cost it would have otherwise had to spend. In addition, Microsoft backed up manfacturing capacity through a third party, so when the first iteration of chips had a problem, Sony had to wait six weeks to get those first chips, whereas Microsoft didn't, thus helping Microsoft hit its target launch for the Xbox 360 in November 2005. Now you may be thinking that IBM was in breach of contract, but Sony, IBM and Toshiba all agreed that IBM would eventually sell the Cell processor to other clients. Sony probably didn't even stop to consider that such a deal would be hammered out before it was completed, nor to its primary competitor. But I'm pretty sure any companies entering into similar deals will ensure the contract clearly states "upon completion" from now on.