The decision to go with Intel chips marks the second major decision about the architecture of the X-Box in a very short time. Earlier this week, Microsoft apparently changed its mind on graphics chips for the system, deciding to incorporate graphics chips from Nvidia rather than from start-up Gigapixel, sources said.
The choice would be a blow to Advanced Micro Devices. Sources previously said that Microsoft was seriously considering using AMD chips in the X-Box. AMD's processors have become favored among many gamers.
The X-Box is a game console being promoted by Microsoft that will compete against Sony's PlayStation 2 and other devices. Due in the fall of 2001, the X-Box essentially will let consumers play games and, in all probability, provide simplified ways to browse the Internet or receive email, just like the latest PlayStation.
Microsoft's game console will essentially be built with the same hardware that goes into PCs, but may contain a new operating system that is compatible with, but different from, current Microsoft operating systems, sources said.
As one developer close to the X-Box project said, "it won't be Windows CE, and it won't be Windows 98."
One of its expected features will be a fast boot-up process, sources said.
The software giant will sink tremendous resources into promoting the console. Robert Bach, a Microsoft vice president for the home and retail division, told Bloomberg that the company will spend more promoting the X-Box than it did on marketing Windows 95.
Microsoft chairman Bill Gates is expected to show off the device tomorrow at the Game Developers Conference in San Jose, Calif.
The Redmond, Wash.-based software giant had been considering using AMD's Athlon processor inside the X-Box until recently. Sources close to Microsoft, in fact, said that a final decision did not appear to have been made until yesterday.
Microsoft declined to comment on the processor selection, while appropriate Intel and AMD representatives could not be reached for comment.