ATI will provide custom, leading-edge graphics technology for use in "future Xbox products and services," the Canadian hardware company has announced this afternoon.
"We're combining Microsoft's vision, software experience and R&D resources with ATI's pioneering leadership in graphics technologies to create innovative future Xbox products and services that meet the lifestyle needs of consumers in the Digital Decade," said Robbie Bach, senior vice president of the Home and Entertainment Division at Microsoft.
"We selected ATI after reviewing the top graphics technologies in development and determining that ATI's technical vision fits perfectly with the future direction of Xbox."
Current Xbox consoles use NVIDIA nFORCE-derived chips including one roughly equivalent to the domestic GeForce 3 graphics card. The move to use ATI based hardware finally puts to rest the question of which of the two companies would work with Microsoft in future - speculation has been rife for some time that the Xbox platform holder was unhappy with its current arrangement.
ATI seem positively over the moon, with chairman and CEO K. Y. Ho having a little pop at NVIDIA in the company's press release: "This agreement cements ATI's position as the prime graphics supplier for the future of the games industry," he said.