Internet gaming site Spong.com has claimed its recent story ATI will provide the chipset and graphics technology for the Xbox 2 has been confirmed by an unnamed "senior source close to Nvidia".
Microsoft's own chief, Steve Ballmer, has said that the follow-up to the original Xbox will ship in Japan in 2006.
According to Spong.com's source, "[Nvidia] didn't want to meet Microsoft's demands for the floating design of Xbox Next. It didn't make sense to partner on the project. At this moment in time, ATI is working with Microsoft."
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