@Squillam
AMD is far below fab capacity. If someone offered to buy vast quantities of chips they would buy it; NOT using fab space is causing them huge losses on the foundry side. Yes, they could get more by selling to HP/Dell but they've already met that demand and can't sell more to them.
Also console CPUs are not as powerful as you think. The X360's CPU is about equal to a K8
dual-core [because I doubt it's more efficient per transistor than K8 and the transistor count is very similar]. A current $76 tri-core would far outperform it now; in 2012 a 32nm Llano quad-core with 480 shaders would be very attractive and be about the same price for CPU and GPU.
If anything, your argument applies to IBM too since they normally sell POWER processors for several thousand dollars in servers.
If Microsoft implemented AMD-specific extensions in Windows it would be anticompetitive and illegal. They wouldn't anyway, they much prefer Intel.
Don't even say Fermi, lol. You'll see when it comes out that it is hot (225W TDP, 190W typical power), underperforming (less than 20% faster than the 5870) and late (March or later). Its theoretical FP performance is a lot less than AMD's.
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I've heard of PowerVR, but the performance isn't good enough. By July 2010 AMD will be sampling chips with on-die graphics equivalent to 480 shaders on a current chip; that's more than a 4670. PowerVR would be an option where power consumption and cost are more important than performance: Wii and handhelds favour this. While MS and Sony have yet to say keeping down prices or power draw is important in a home console.