Xbox 2 Rumor Sends ATI Shares Higher

In a slightly bizarre turn of events, a rumor that appeared to start on UK games site Spong.com, claiming that ATI may be providing the graphics chip for the Xbox 2, replacing current provider Nvidia, has ended up significantly affecting ATI's stock price, sending it up over 5 percent on a day when many other tech stocks lost ground. As an analyst quoted in the Yahoo article suggests, "..we think it's a decision that has not been made yet and it is purely speculation to guess as to who may or may not win." But that doesn't seem to have stopped investors acting as the rumor gathered steam and percolated through more major news sites.

First post

[Anonymous Coward]

It's sad that investors react so strongly to a rumor that the second place console maker might use a product in their next console.

Then again, I've always said that the XBox is just a very expensive piece of marketing for the XBox2.

Heh...

[mbogosian]

...ATI may be providing the graphics chip for the Xbox 2, replacing current provider Nvidia, has ended up significantly affecting ATI's stock price....

That is until investors figure out that ATI will get screwed when Microsoft leaves them with a bunch of useless inventory and no recourse just like they did with nvidia....

Re:Heh...

[bmnc]

Maybe the reason Ati might be providing the graphics chip is because Nvidia has been burnt once, and doesnt want anything to do with M$. Or rather, Nvidias prices for M$ have gone up for a prospective XBOX2 ;)

Not very uncommon

[TripleA]

The whole IT-boom and crash three years ago was all about expectations and rumors too.

Next up:

[Slime-dogg]

Stocks in STMicroelectronics soar as the decision to use the next generation of Kyro graphics cards in the XBox is made. STMicro no longer produces the card, and isn't even really a part of the industry, but investors insist on bringing back the company.

Parties on the MS side are saying "Yay! Tile graphics. Something different and literally Cool!" Well, that's what STMicro would like them to say.

I bet Nintendo isnt too happy about this...

[Anonymous Coward]

seeing how ATI is also providing them with a graphics chip for their next console.

Strategy

[alexo]

ATI's margins on chips are much higher than their margin on cards. They are concentrating heavily on providing discrete components to OEMs, partners and other manufacturers.

The real lesson here...

[Imperator]

...is how easy stock manipulation is these days. I wouldn't be surprised if the rumor were incited by someone who had just purchased lots of ATI stock. This sort of thing happens all the time, and is rarely prosecuted. Look at what SCO is doing for an example of stock manipulation being done by the company itself--a "pump and dump" scheme for the executives.

Warcry's Article

[Bruha]

You can read the Warcry News Network's article at http://www.warcry.com

Commentary and points to the original article.

Xbox 2 Info from Inside

[Anonymous Coward]

Working at Microsoft Games Research, I can tell you a few things (anonymously ofcourse). The codename for it is Xenon. We are considering using wireless controllers (no specifics). We are also considering using two TV-outs (our focus group voiced that 4 people crunched together on one TV wasn't too enjoyable). The DVD will be front tray loading rather than on the top. Remote control on/off a possibility (from controller probably). It will be backwards compatible. The controller will be smaller. Ther