According to the New York Times, Microsoft will not rely on Intel, IBM or anyone else for that matter when it comes to producing the chip for the Xbox 3 (currently known in gaming circles as the Xbox 720). They will be looking at their own engineers across their Redmond, Washington and Silicon Valley headquarters to design the chip. Microsoft's Xbox contained a 733MHz Intel processor, whereas the Xbox 360 utilised Xenon a custom triple-core PowerPC-based design by IBM, but a system designed by researchers will allow Microsoft to "reconfigure computer designs without the cost of making finished chips," meaning that they'll have plenty of time to experiment with their own chip designs.

Microsoft have already begun to explore the hardware design for the Xbox 3, which will arrive before the end of the decade.

Read the full story at the : New York Times