The move would reduce the cost of building machines
Microsoft will incorporate processors manufactured by AMD in its next Xbox gaming console as part of its efforts to reduce the cost of building machines and attract developers to create more game titles.
The new Xbox will replace IBM Power PC technology with an AMD system-on-a-chip that incorporates Jaguar central processing units with graphics chips.
Microsoft's move would assist AMD to gain a larger slice in the $67bn global video-game market and reduce its dependence on the shrinking PC industry.
Additionally, game developers can now be easily able to create gaming titles that they earlier developed for PCs and mobile devices for the next Xbox.
The company has delayed the launch of the Xbox 360's successor in April, while it is now being considered to be introduced at the industry's E3 expo in June or at a separate event in May or June 2013, according to reports.
The software giant has also acquired the home-entertainment technology startup R2 Studios targeting addition of TV to Xbox.
