I think AMD provides for that need better. Not now, of course, but with Llano.
Consoles need a good GPU more than a CPU, and what they really need is low cost and therefore tight integration. Llano has four improved Phenom II cores, and ~400SPs of DX11-class graphics power which is equivalent to a current HD56xx chip. The memory controller eliminates the traditional integrated graphics bottleneck.
Llano is a two-chip [CPU+GPU, SB] solution (as opposed to Intel's three {CPU+sucky GPU, good GPU, SB)). Intel's graphics are nowhere near good enough to power a console so would require an AMD or Nvidia graphics chip anyway, but AMD's solution gives you a good-enough CPU with an AMD GPU. Larrabee is not going to be ready in time, even Intel's 2013 CPU (Haswell) doesn't use a Larrabee GPU.
Llano's power use will also finally be competitive with Intel's mobile offerings, unlike current AMD chips, due to power gating and the C1E state.
Better yet, the technology is proven. Nintendo is conservative, but Llano has an existing CPU and an existing GPU. The new part is the low power focus and integration work. Llano is very late Q4 2010 or early Q1 2011 too so it would easily fit with a late 2011 or 2012 Wii successor, if Nintendo started planning this.
Essentially, if Nintendo is to carry on using an AMD GPU like the last three consoles, AMD will easily be able to tempt them into throwing a CPU on as well, given the unrivalled integration.
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