IBM Biggest Winner in Video Game Consoles Market; Targets $20B by 2015

While Nintendo (Wii), Microsoft (XBOX360), and Sony (Playstation 3) are playing hard to win in the $17 billion video game industry, IBM has already become one huge victor as it designed and makes the microprocessors for all three units.

As recently as 2004, IBM was struggling with its chip-making business unit. 

Sales of chips to other companies remained flat that year and the unit that includes chips lost $252 million in 2003. Now, because of the video game deals, IBM is expected to see about $3.7 billion in sales of chips and associated design services this year, up from $2.9 billion last year and $2.5 billion in 2004. 

IBM's new "technology collaboration solutions" unit (using the engineering consulting work it did for Microsoft, Nintendo and Sony as a model) is expected to post $4 billion in revenue this year. Internal projections call for that division to hit $10 billion by 2010 and $20 billion by 2015 (via AP). IBM executives credit their deals for the three game consoles to key decisions that date to the 1990s, including a plan to aggressively redesign IBM chips.

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