Sony sells PS3 chipmakers to Toshiba

Sony has entered into an agreement with Toshiba to sell off its video game Cell processor chip production lines, reports Bloomberg.

The powerful Cell processor chips have cost Sony more than 200 billion yen (approx $1.7 billion) to develop, leading to losses in the division last fiscal year.

The deal with Toshiba--Japan's largest chipmaker--is believed to be part of Sony's strategy to cut back on loss-making businesses and grab funds for making more products, such as Bravia televisions and digital cameras.

Toshiba and Sony will enter into a venture to continue to make the chips, which are used inside the PlayStation 3 console, with a final agreement on the terms and specifics of this undertaking to be firmed up in March 2008.

Financial terms of the agreement were not disclosed, although the price of the planned sale is likely to be 100 billion yen ($861 million) believes the Nikkei newspaper.