Xbox 360 "Falcon" (w/ smaller 65nm chips) to dive-bomb PS3

http://www.dailytech.com/article.aspx?newsid=7972

Xbox 360 to Get 65nm "Falcon" Makeover This Fall
Brandon Hill (Blog) - July 9, 2007 2:17 PM

"Yippee-ki-yay, Mr. Falcon." Microsoft prepares 65nm chips for Xbox
360

When it comes to Microsoft's Xbox 360, Dean Takahashi always seems to
have the inside scoop.

Today, Takahashi confirmed that Microsoft's upcoming 65nm die shrink
for the Xbox 360's microprocessor and GPU will is codenamed "Falcon."
Takahashi reports that Microsoft is currently qualifying the new
Falcon chips along with a redesigned motherboard. The 65nm-equipped
Xbox 360s are due to hit store shelves this fall.

The new chips are not only smaller and roughly 50 percent cheaper to
produce than their 90nm counterpart, but they are also cooler. Cooler-
running chips coupled with a revised cooling solution would go a long
way to eradicating the Xbox 360's fatal flaw: the Red Ring of Death
(RROD).

Heat has been a big problem with the Xbox 360 and has been the root
cause of RROD cases around the globe. Microsoft has countered the RROD
failures by increasing the warranty of the console, adding various
"warranty enhancements" and beefed up cooling solutions on new
production Xbox 360 units.

Microsoft ultimately caved in to mounting pressure from the Xbox 360
community on RROD failures and announced a $1 billion initiative to
service Xbox 360s afflicted with the problem and extended warranty
coverage for those machines to three years.






http://blogs.mercurynews.com/aei/200...me_falcon.html


Microsoft's next move? Code-name Falcon

By Dean Takahashi
Monday, July 9th, 2007 at 12:02 am in General.

Here's a trade secret that Microsoft is unlikely to publicly
acknowledge.

Sony's cutting the price on the PlayStation 3. How will Microsoft
react? We'll find out soon. But a key part of the strategy is going to
be a project code-named Falcon.

Falcon is the name for the latest internal electronics in the Xbox
360. It will have an IBM microprocessor and an AMD/ATI graphics chip
that are manufactured in a 65-nanometer production process. These are
cost-reduced chips that do the same thing as their 90-nanometer
predecessors, but they're smaller.

With smaller chips, Microsoft gets a bunch of benefits. They won't
generate as much heat. So the risks of overheating - one of the main
reasons behind Microsoft's billion-dollar write-off for repairs and
extended warranties - are much lower. The chips may also cost half of
what it took to make them before because they use less material and
fewer manufacturing steps to produce.

Everyone knows that console makers cut the prices and costs on their
consoles over time. But you may not be aware that the primary chips -
microprocessor, graphics, and the Ana video processing chip - are the
bulk of the cost of the machine. Microsoft started making the Xbox
360s in August, 2005, with a 90-nanometer process. It is overdue to
switch to the newest technology, 65 nanometers, but that day has
finally come. It may be some time - a year, maybe two - before it
moves on the a 45-nanometer process.

But it's worth it. I recall that Ken Kutaragi said that by moving
along the semiconductor manufacturing cost curve with the PlayStation
2, Sony was able to reduce the size - and therefore cost - of the
PlayStation 2's original chips to just 13 percent of the original over
the life cycle of the PS 2.

If you cut the costs on the chips, you can cut the overall cost of the
system. You get ancillary benefits such as using a smaller
motherboard, more air flow inside the console, and the ability to take
the big giant power supply in the Xbox 360's power brick and put it
inside the console.

Microsoft is in the process of qualifying the new Falcon chips and
motherboard this summer. I expect it will launch Xbox 360s with the
new Falcon innards this fall. That is why the company has been able to
say that it has solved its manufacturing quality problems. Microsoft
is likely to spend a little more money on heat sinks to make sure that
the overheating problem doesn't resurface with Falcon.

The good thing about the smaller chips is that they will likely be
easier to make in mass quantities and they shouldn't fail as often.
Quality should automatically go up. That's what folks said about the
90-nanometer generation. But the 65-nanometer production process is a
known quantity at this point at places such as IBM for sure and
possibly at other suppliers such as Taiwan Semiconductor Manufacturing
Co. So rather than fix the problems with the 90-nanometer machine,
Microsoft has the easier problem now of getting a 65-nanometer machine
to work right. I suspect that is why Robbie Bach, president of the
Entertainment & Devices group, said on Thursday on a conference call
with analysts that the company has "its hands around it at the
engineering level."

But once this machine is in the field, Microsoft will have a few
options. It can take the power brick and put it inside the same
chassis. It can also make a smaller version of the core, but this
involves considerable redesign and retooling resources. And it could
also beef up the console and make room for more costly things - as it
did with the Elite.

It's anybody's guess as to what Microsoft will do with the Falcon as
its base platform going forward. But Sony had better watch out.
Microsoft is moving ahead of Sony on the cost-reduction curve. It
would be risky for Sony to get into a price war with Microsoft.

Now it's easier to see why Microsoft still expects to be profitable in
fiscal 2008 with the Xbox 360 business. In this fiscal year, Microsoft
will introduce a major cost reduction with the Falcon platform. It
will launch Halo 3. And it has already written off in fiscal 2007 the
costs of repairing consoles for the next few years.

Falcon is a fundamental part of the strategy that Microsoft is using
to try to beat Sony. Is it going to be good enough to beat Nintendo on
costs? Very doubtful. Nintendo can play the cost-reduction game just
as Microsoft can. Falcon certainly means that Microsoft can afford to
cut the price of the Xbox 360 going forward. Whether it does so
depends on how aggressive it wants to be at winning the lead market
share in the business. But everyone knows that if you cut your
hardware price too much, you lose money. After all, Microsoft lost an
estimated $3.7 billion on the original Xbox.

When I asked David Hufford, a Microsoft spokesman, about Falcon on
Friday, he said I was telling him something new. When I asked Peter
Moore, head of games at Microsoft, about Falcon on Thursday, he said,
"We have a bunch of different projects that cost reduce and improve
quality as you find issues, as does our competition. Once you get
millions in the field, you learn about the box under all kinds of
different circumstances, you can adjust and tweak what you do
accordingly."



http://www.gamesindustry.biz/content_page.php?aid=26521

Microsoft develops new Xbox 360 chipset

Mark Androvich 18:51 (BST) 09/07/2007

Reduces overheating risk, cuts costs

Microsoft has developed a smaller chipset for the Xbox 360, allowing
the manufacturer to cut production costs.

Dean Takahasi, writing in the San Jose Mercury News, reports that
Microsoft's new chipset is code-named "Falcon."

The new chipset has an IBM microprocessor and an AMD/ATI graphics chip
that are both manufactured in a 65-nanometer production process. The
original chipset was manufactured in a 90-nanometer process.

The smaller chipset both reduces the risk of overheating and lowers
the production costs associated with the Xbox 360.

Microsoft has not yet officially announced an Xbox 360 price
reduction, although the move is expected by many analysts, including
Michael Pachter.

The "Falcon" chipset redesign would certainly be a step towards a
price reduction. The Xbox 360 has now been on the market for nearly 20
months without a drop in price.




http://www.gamasutra.com/php-bin/new...hp?story=14609


July 9, 2007

Report: Microsoft Looks To Cheaper Chips To Lower Xbox 360 Costs

Report: Microsoft Looks To Cheaper Chips To Lower Xbox 360 Costs San
Jose Mercury News journalist Dean Takahashi has reported that
Microsoft could be looking to a new internally redesigned Xbox 360,
codenamed 'Falcon,' as a means to not only reduce production costs,
but also reduce the console's price at the retail level as well.

According to the report, Microsoft plans to replace its current 90-
nanometer chip manufacturing process with a less costly 65-nanometer
process, resulting in smaller, more efficient microprocessors and
graphics chips for the Xbox 360.

The result, according to Takahashi, will be internal electronics that
generate less heat, and thus result in consoles that are less prone to
the infamous 'red ring' general hardware failure error, the driver
behind Microsoft's recent warranty extension. The 65-nanometer
technology also makes for much more possible room within the Xbox 360
hardware, which the report speculates could be used to house the
console's current brick-style power supply in future models.

In addition, as the chips themselves make up the bulk of the console's
manufacturing costs, the savings from the shift to the new process
could eventually be passed along to the consumer by way of a less
expensive Xbox 360.

When questioned about the Falcon project, Microsoft's Peter Moore
declined to confirm such an initiative, instead telling Takahashi, "We
have a bunch of different projects that cost reduce and improve
quality as you find issues, as does our competition. Once you get
millions in the field, you learn about the box under all kinds of
different circumstances, you can adjust and tweak what you do
accordingly."
POSTED: 09.29AM PST, 07/09/07 - Jason Dobson




http://news.teamxbox.com/xbox/13892/...ts-65nm-Chips/

Code-name Falcon: Xbox 360 Gets 65nm Chips
By: César A. Berardini - "Cesar"
Jul. 9th, 2007 9:09 am

E3 Media & Business Summit 2007

Dean Takahashi has the scoop on the updated Xbox 360 system that will
finally make use of the microchips built using the a 65-nanometer
manufacturing process:

Falcon is the name for the latest internal electronics in the Xbox
360. It will have an IBM microprocessor and an AMD/ATI graphics chip
that are manufactured in a 65-nanometer production process. These are
cost-reduced chips that do the same thing as their 90-nanometer
predecessors, but they're smaller.

With smaller chips, Microsoft gets a bunch of benefits. They won't
generate as much heat. So the risks of overheating - one of the main
reasons behind Microsoft's billion-dollar write-off for repairs and
extended warranties - are much lower. The chips may also cost half of
what it took to make them before because they use less material and
fewer manufacturing steps to produce.




http://www.next-gen.biz/index.php?op...298&Ite mid=2

Microsoft Readies Lower-Cost 360

Microsoft is reportedly readying a revised version of the Xbox 360,
codenamed 'Falcon', in a bid to reduce production costs.

According to a Mercury News report, (a reputable source of Xbox news)
Microsoft will switch to a 65-nanometer production process, meaning
new consoles will feature smaller microprocessors and graphics chips
as opposed to the 90-nanometer processors found in current models.


The smaller, more cost-efficient 360 innards will add a range of
benefits to the system, while lower production costs would also
facilitate any plans for a future price drop.


If these new production methods are implemented, overall console
reliability would be increased. The risk of overheating, an issue that
has strongly been linked to the three red lights of death failure,
would also be reduced, while more space would be freed up inside the
console itself. The report speculates that this new space could be
used to house the current brick of a power supply that comes with
360s.


Microsoft is reportedly in the process of qualifying the new Falcon
chips and motherboard, with 360s containing Falcon innards expected to
hit retail this fall.


"We have a bunch of different projects that cost reduce and improve
quality as you find issues, as does our competition. Once you get
millions in the field, you learn about the box under all kinds of
different circumstances, you can adjust and tweak what you do
accordingly," said Peter Moore, head of games at Microsoft, when
questioned about Falcon.