Matsushita Electric and Nintendo have announced they will be collaborating on a broad range of consumer electronics products including a next-generation game machine designed to challenge Sony's PlayStation.
Nintendo said it will use a 400MHz version of a chip based on IBM's PowerPC architecture in game machines code-named "Dolphin". The multi-year deal is valued at $US1 billion, the companies said.
Under the deal, Nintendo will use Matsushita's digital video disk (DVD) ROM as the centrepiece for a game machine that officials said will ship by the end of next year. Nintendo will market the machine, which will be powered by a 400MHz PowerPC-based processor custom built by IBM, officials said.
In addition, the companies will build unspecified "convergence machines", that are not dedicated game machines but meld game playing with DVDs.
The deal shows how Japanese consumer electronics and game makers are betting that both game machines and DVDs will be at the centre of entertainment and Web access in homes of the future.
It follows the March announcement that Sony is developing a game machine with Toshiba that also runs on a DVD.
The Japanese vendors are planning to build a broad array of appliances and peripherals that will be able to share data over home networks. Movies flowing from a cable set-top box, for instance, could be stored on a DVD device and played back over a portable device later, according to the companies' plans.
Nintendo is best known for its Nintendo 64 game console, the Game Boy handheld games machine and characters like Super Mario and Donkey Kong. Nintendo in recent years has lost plenty of market share to Sony's PlayStation, now the world's leading game machine and sees this as a fightback.