The sources confirmed earlier speculation when a Sony spokesman had said Sony "had not ruled out the possibility."

During the Game Developers Conference held in San Jose last week, Shinichi Okamoto, chief technology officer and vice president, Sony Computer Entertainment Inc., stopped short of confirming that IBM's Cell, its microprocessor for next-generation communications and consumer multimedia applications, would serve as the console's CPU.

Okamoto said during a key presentation that Sony and IBM know-how would serve as the PS3's processor and software backbone. Following his announcement, EBN received confirmation from several sources close to the deal that the Cell will indeed power the PS3.

IBM has been tight-lipped about the Cell's architecture, which IBM said will accommodate all of the broadband speeds that will be prevalent when the chip comes to market.

Industry sources, however, tell say that it will enable the PS3 and other multimedia devices to process incomplete data packets transmitted over a broadband or even analog modem connections to "reconstruct what should be there."

The Cell's compression engine, for example, will use a multi-processor engine to reconstruct missing pixels or other missing features due to glitches in a streaming game or video. IBM will also produce the Cell processor using its 0.10-micron process in East Fishkill, N.Y. and SOI technology.

Additionally, the Cell's architecture is likely to replace the traditional game console graphics processor model on which the Xbox, which uses Nvidia Corp.'s processor, and the GameCube, based on ATI Technologies Inc.'s graphics engine, are based.

"They are redefining the graphics engine. The PS3 will not have a graphics engine as we know it," said Richard Doherty, an analyst for Envisioneering, Seaford, N.Y. "It will not resemble the PowerPC [CPU model] that the GameCube has, either."

Additionally, the PS3, as well as other applications that will use the Cell, will take advantage of the CPU's "self healing" capability. "Self-healing computers will be programmed not to go down," Doherty said. "Bus and processor areas are automatically corrected using a new meshed era redundancy technology."

When contacted, IBM did not comment on its collaboration with Sony on the PS3, but reiterated its earlier announcement made last year about its Cell plans. Then, IBM said it had entered into a $400 million partnership to develop "a new breed of microprocessor for next-generation communications and consumer multimedia applications."

The three-way development deal, which involves equal financial commitments from IBM, Sony Corp., and Toshiba Corp., is largely carried out at an IBM design center in Austin, Texas. Under the agreement, IBM has licensed its silicon-on-insulator (SOI) process technology to Sony.