The Wall Street Journal is running an article about a recently released book entitled "The Race for a New Game Machine" which details Sony's development of the Cell processor, written by two of the engineers who worked on it. They also discuss how Sony's efforts to create a next-gen system backfired
by directly helping Microsoft, one of their main competitors. Quoting:
"Sony, Toshiba and IBM committed themselves to spending $400 million over five years to design the Cell, not counting the millions of dollars it would take to build two production facilities for making the chip itself. IBM provided the bulk of the manpower, with the design team headquartered at its Austin, Texas, offices. ... But a funny thing happened along the way: A new 'partner' entered the picture. In late 2002, Microsoft approached IBM about making the chip for Microsoft's rival game console, the (as yet unnamed) Xbox 360. In 2003, IBM's Adam Bennett showed Microsoft specs for the still-in-development Cell core. Microsoft was interested and contracted with IBM for their own chip, to be built around the core that IBM was still building with Sony. All three of the original partners had agreed that IBM would eventually sell the Cell to other clients. But it does not seem to have occurred to Sony that IBM would sell key parts of the Cell before it was complete and to Sony's primary videogame-console competitor. The result was that Sony's R&D money was spent creating a component for Microsoft to use against it."