How was nVidia able to revoke the contract? Or did the contract simply expire due to time?HuusAsking
nVidia refused to lower the price they were charging Microsoft, by doing so they made it too expensive for Microsoft to continue manufacturing the Xbox. In 2002 they were in price negotiations with MS, which fell through, and the manufacturing continued into 2003. However, because these negotiations fell through, MS literally had to pay a huge sum of money for each Xbox being manufactured - as the price of the console fell, to match the competition, this resulted in MS subsidizing the console to a large degree - this in part is why MS lost billions of dollars last generation - and why the Xbox 360 is using an ATI GPU.
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So to answer your question - nVidia didn't revoke the contract, so much as refuse to charge Microsoft a fair price to use their GPU. This left Microsoft with no ability to continue the Xbox's life - they had to stop manufacturing them as soon as possible, because it was costing them so much money. Typically parts designers lower the price of their parts each year to make a console cheaper - but nVidia didn't want to work with MS, and that's why the Xbox isn't around today while the PS2 and GCN are still on store shelves.
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