Okay, I read the whole interview and have stewed on this for a day. I wanted to really think about what this means for the game industry and not necessarily games directly.
This isn't necessarily about Xbox 720, it's Intels new multicore chip capable of graphics. The core is basic x86 architechture but is smaller and easier to produce. More cores can go on a single chip.
It is fully capable of being a GPU or a CPU because it is based off of x86 but has the added instructions for graphics. It is designed to use open GL, Direct X, and proprietary libraries.
For Intel to sell this as a GPU it has to be good for consoles. Really good. Better and cheaper. It's a hard sell.
Where this might truly revolutionize the console industry is the idea of using it in a higher number core single processor gaming console. If they can get a bunch of cores in the machine, doing all the things they say it can, with the libraries for programming on a multicore processor as well as they imply, then this would very good for getting next-gen performance down to prices that are realistic. A $400 price (at a loss for the manufacturer) are not realistic, this will help fix that next gen on non Sony consoles (Sony has a brighter future, too but for a different reason) - maybe MS and Nintendo.
This is most likely for MS, because they currently use an Intel CPU.
Nintendo may go with this or they may go with a multicore PPC, but it wouldn't be called a Cell - this would allow for an easier transition and easier BC.
Sony will not use this, unless it has fireworks coming out of its ass. The Cell (and programming for the Cell) will evolve and become easier. Playstation is the show peice for the tech. Sony will not give up the revenue stream from owning part of the tech, and getting licensing fees. Having the Cell in a "4D" gaming console is great way of getting into the mindset of the geeks up in procurement from various militaries and banks that use supercomputing. It will get cheaper to put in the console.
Being x86 architecture will be great for future generations by eliminating a lot of the growing pains involved in going from one console to another.
I would cite regulation, but I know you will simply ignore it.
