Microsoft to build in-house designed processors

SEATTLE: Microsoft, seeking to fend off competition for its Xbox game console by souping up the Kinect motion sensor, is tapping a new semiconductor developer: Itself.
For the first time, the company will build its own processors based on an in-house design. The new chips will make Kinect more accurate and responsive using an imaging technology found in military gear, said Cyrus Bamji, who played a key role in developing the silicon architecture. Previously, Kinect relied on an off-the-shelf chip from Israel's PrimeSense Ltd.
Microsoft joins companies such as Apple Inc. that are doing more work on chips internally to add exclusive features and set their devices apart. Microsoft will package the Kinect with the latest version of the Xbox later this year, adding $100 to its price. Gamers who don't see the value may be tempted to opt for Sony's $399 PlayStation 4, instead of Xbox One at $499.
"We are seeing a big trend towards more of the hardware makers out there, whether it's smartphones or whether it's tablets, starting to bring more of that semiconductor function in-house," said Jon Erensen, an analyst at market-research firm Gartner Inc. "It allows them to differentiate. Everybody in the market is using the same off-the-shelf processor."
Kinect is a camera-based device that connects to the Xbox to let users translate body motions and voice commands into game moves — say, in a virtual tennis or car-racing game. The newest version of the sensor will include TV controls.