More then likely we will see a teaming of Power PC with ATI. Nintendo has formed a really good relationship with AMD and IBM which I doubt the three would want to mess up in any way. AMD will offer up a modified mobile chip for a GPU and IBM will offer up an already in development CPU. We'll probably see something like a 4 core Power PC cpu that has 1 cpu core clocked higher then the rest.

Intel won't be invited back into the console market for one very good reason: THEY CHARGE TOO MUCH. Even to their close partners. Console chips need to be cheap. Intel's Atom which is considered somewhat cheap is still too expensive.

Nintendo's a loyal company they will likely stick with IBM. Not to mention backwards compatability issues. Its better to stick with PowerPC!

I would still think nintendo will go with AMD. AMD is going to be a cheaper alternative to Intel mostly because intel is already making a killing and AMD will most likely undercut Intel's prices

If the partnership with AMD is so awesome then why is Tegra chosen as platform for new DS ? :)

PowerPC is likely out because I believe Nintendo will want to have a combined CPU+GPU on the same die. It means a great savings in power, heat, packaging size and board complexity. It only really leaves AMD and Intel as viable options.

ARM core, backwards compatibility.  Of course, we don't know if the Tegra deal's legit or not even...

ATi has powered their past 2 systems so it's a safe bet to say ATi will provide the graphics for the N6.

Though I'm not a specialist on that matter, just commenting on the "differentiation" point. They've already differentiate themselves with the Wii, though that was a decision that paved the way to success for them, at the same time it made their relationship with 3rd parties rather complex. Most of them were unable to heavily capitalize on the Wii utilizing the new values the machine has to offer in vein of best-selling Nintendo games, struggling with traditional developement paradigma. If as you say ray-tracing won't create realistic images*, what do you think, how would this kind of technology impact 3rd parties, when they'll unable to create 'realistic' games, in which they made biggest investment? For them Nintendo only creating obstacles on their way.

*I didn't not really get why you labeled ray-tracing as unrealistic, or did you mean unrealistic at this point? Or I just misunderstood you?

Its an extension to their current visual style. From what I can tell their games tend to be very shader heavy and they don't rely on textures as much as other developers to make their visual look. Raytracing is simply an extension to that style and it fits in with making natural looking but stylistic games whilst minimising development costs relative to conventional rendering as much as possible. This is in contrast to other developers who are looking to make realistic looking games which expensive models/textures to replicate the look of the real world.

This is a raytraced image:

Its not about making realistic/unrealistic games. Its more about controlling development costs and ray-tracing supports this ideal at the cost of computational performance. The reason why I suggest this is a way to reconcile their values with the progression of computer performance in a way which satisfies both the ideal of improved presentation whilst keeping costs relatively constrained. Third parties would not be lacking performance to do the style of games they want to create, a next generation Wii will likely have more performance than both the Xbox 360 and PS3 combined at the floor of the cost/benefit ratio.

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.