The folks at Microsoft are well known for planning ahead. Whispers, from people who have seen the new XBox 2 plans, suggest that nVidia is nowhere to be seen.
It is news like this that might have Via and ATI shaking their fists in the air and screaming with delirious joy.
According to various sources the problems between nVidia and Microsoft are based on what Microsoft considers slightly overpriced components. Microsoft is having a hard time making any profit from the XBox and believes that a slight drop in prices from nVidia would do a great deal to help. nVidia however, does not have a reputation for dropping prices.
Via will do anything they can in order to provide both the graphics chipset and CPU. The main competitor to Via for the time being comes from up north. Canadian ATI is on a reformed course and is aggressively pursuing nVidia's market share. A deal with Microsoft on XBox 2 would do wonders for the company, allowing it to dig its claws deeper into nVidia market territory.
It is still very early days and many things may change. nVidia could change tactics and decide to drop their prices, Via or ATI are certain to do whatever they can to secure the deal while Intel could always decide to pay Microsoft a visit...
