“The Race for a New Game Machine” book chronicles the Sony-Microsoft-IBM love triangle

In 2001 the team commissioned engineer Peter Hofstee to calculate where they had to be in order to make sure that their chips were competitive against the best that Intel could do in 2005. Hofstee told the team it had to hit 4 gigahertz in order to keep competitive. At the time, the fastest chips ran at 1.5 gigahertz. On top of that, the power consumption had to be much lower than the current.

Then one day, Shippy’s boss Chekib Akrout, an IBM senior vice president responsible for the IBM Cell team, called Shippy into his office. Akrout told Shippy that another customer wanted to use the core for the super-secret Cell chip. That was always the plan, as a mass-produced Cell chip would be much cheaper for Sony if there were more customers for it. IBM planned to use it in servers and Toshiba would use it in TVs. (Toshiba finally showed off a Cell-based TV at this year’s International Consumer Electronics Show by the way). But Akrout then dropped a bomb. The other company was Microsoft, which would use the PowerPC core in its Xbox 360 game console.

Microsoft was two years behind Sony and was in a panic. It had tried to go to rivals such as Intel and failed to secure an agreement for a low-power but high-performance processor. Intel just didn’t make such chips in those days, as its chips were power-hungry. But Akrout said Bill Gates of Microsoft called up IBM CEO Sam Palmisano and essentially offered to pay a price that Palmisano couldn’t refuse. More than a billion dollars was at stake.

Microsoft looked at all of the processor cores IBM had to offer, but it didn’t like any of them, at least until an IBM engineer named Adam Bennett revealed a core that was still in development in early 2003. It was the same one that IBM was developing for use in Sony’s Cell processor. Akrout, IBM executive John Kelly, and others decided to offer the core the Microsoft with modifications. But Kahle felt IBM was being reckless, showing a design that was destined for its partners to one of their rivals.

The problem was that Microsoft wanted to get to market at exactly the same time as Sony, in the fall of 2005. This was 2003, and chips normally took three years to get to market from scratch. IBM was going to cut it close because Microsoft was in a panic. Shippy recounts the history of Microsoft’s thinking, which I told in my own books. (I was irked that the book doesn’t footnote my own, and Shippy said he would fix that if the book has a paperback edition).

Shippy’s reaction was one of emotional dismay. He was asked to be a traitor to his partners at Toshiba and Sony, whom he had worked with every day for a couple of years. But this was the chance for IBM to sew up the video game industry –- making chips for Nintendo, Microsoft and Sony –- and put Intel into a state of misery. Jim Kahle, who recruited Shippy, stuck with the PS 3 chip project and resented how his friend took up work for the enemy. Other team members felt the same way. But Shippy took the view that this was good for IBM, that the company could keep the walls between the projects separated, and that it made perfect sense. He said, for instance, that Intel probably never thought twice about selling the same chip to Dell as it did to HP.

These emotional issues make the book more than a dry recitation of the process of designing modern chips. There is a fair amount of chip-design talk, but the authors paint the picture with analogies that most folks should be able to understand. I reported a story years ago for the San Jose Mercury News that Sony had gotten some patents for the Cell microprocessor for a future gaming machine. Inside IBM, Shippy says that the news stunned Kahle and others on the IBM team. He went to the Sony engineers and asked why they had patented work that had also been done by IBM without telling IBM. He threatened a lawsuit, and Sony amended the filings to name IBM engineers on the patents. Those patents gave Microsoft engineers clues to what they should do and what they should avoid in order to keep out of legal trouble with Sony.

Shippy and Phipps do a good job of painting the drama in the chip work. IBM vice presidents bickered over why solutions from their own divisions weren’t used in the two projects. As the vice presidents hovered over Shippy, he felt like he was on the witness stand in a “torture room” as they and others lobbed verbal grenades about the progress or lack thereof on the project. Shippy had numerous run-ins with Albert Randall, an IBM executive who allegedly spewed hostility in meetings because Randall felt the Austin team favored the Sony project over Microsoft’s. Shippy was virtually one of the only engineering managers who straddled both projects and so his loyalty was often tugged in two directions.

Given how closely Shippy worked with Microsoft and Sony, you’d think the book would be perfect grounds for Sony to file a lawsuit against IBM. IBM says it kept the boundaries clear, but Shippy confesses that he felt contaminated in meetings with Microsoft. Rumors commonly crossed the boundaries on the companies that were working on different projects. In one hilarious moment, Shippy had to quickly relocate a meeting near a cafeteria to a more remote room because Microsoft’s engineers were coming to visit, and Shippy had to make sure they didn’t run into any Toshiba or Sony engineers in the common areas.

In some ways, I’m stunned that IBM would allow Shippy to write this book. When I asked him about this, Shippy said he was careful not to reveal any trade secrets. He also says that IBM has not screened the book or pressured him about it in any way. He wanted to capture the picture of the interrelationships between characters, to talk with pride about IBM’s great achievement, and to inspire other young people to go into engineering.

There are moments where I can tell Shippy’s holding back. He acknowledges that the conversations in the book are reconstructed to the best of his and his co-author’s memories. The lines that flow from the different antagonists in the engineering discussions are just too grammatically correct. Shippy says he did not keep a diary that helped him reconstruct the conversations. He is plenty critical of certain IBM people in the book. “We all felt that IBM had violated many of its core business practices in jockeying both horses in this particular race.” But in the end, Shippy comes off as a patriot with Big Blue blood in his veins. He felt like he had the weight of an $80 billion corporation’s future on his shoulders.

In a way, IBM was betraying a partner. On the other hand, it was exercising its legal right to resell a core that could be customized into something else. Shippy decided that he had to get over the ethical problem and just try to make the best possible technical achievement that he could. The rest of his team grumbled, but fell into line.

The great failure of Ken Kutaragi, the head of Sony’s game business, and his lawyers was that they failed to foresee how their competitor could catch them. IBM failed many years back to acquire all rights to Microsoft’s MS-DOS operating system. Bill Gates turned around and licensed it to all PC makers, creating an IBM PC clone industry that eventually allowed Microsoft and Intel to usurp all power from IBM. In this case, Kutaragi could have asked for exclusivity in the video game business for the PowerPC core, but he was blindsided. Sony’s failure to bar IBM from selling its own chip technology to Microsoft — which launched before Sony could use the chip technology itself — is astounding. This will go down as one of the worst business decisions of all time.

But as Microsoft’s engineers told me for my own book, they asked for a lot of modifications to that chip. They were aware of Sony’s own patents for the Cell processor and knew what they wanted to do that would differentiate the core. So Microsoft’s head engineer, Jeff Andrews, asked for changes and wound up with a very different microprocessor. The core was the same, but there were three cores on Microsoft’s chip and just one on Sony’s. And Microsoft had asked ATI Technologies, now part of Advanced Micro Devices, to fashion its own graphics chip. Microsoft engineers didn’t want anything to do with the Cell architecture or the vector units. They wanted much more powerful vector processing on the main cores. In the end, the Microsoft Waternoose chip was a custom microprocessor.

There was one IBM engineer who had his name both on Cell microprocessor patents as well as Xbox 360 microprocessor patents. But that didn’t mean that Microsoft completely copied Sony’s chips. Microsoft’s final chip had 165 million transistors, while Sony’s Cell had 234 million. You could say that Microsoft stole Sony’s chip, as some superficial book reviews say, but it’s just not true. Shippy agrees that angle is “overplayed” in the press (such as the Wall Street Journal story).

“That wasn’t the reason we wrote the book,” Shippy said. “IBM’s own core technology started even before Cell. We developed high-frequency, circuit design techniques at low power. That enabled us to create these supercomputers on a chip. It’s over sensationalized that Sony funded the Xbox 360 chip.”

Having said that, Shippy does a very good job of explaining how it felt to work on both chips at the same time. The tension led to a lot of stress for engineers who were already on a death march schedule. And this is where the writing bears most resemblance to the classic 1981 book, The Soul of a New Machine, by Tracy Kidder, which won the Pulitzer Prize for its detailed description of the making of a Data General minicomputer. Shippy and Phipps say that book was their inspiration.

Jim Kahle, the manager in charge of the Cell chip, had to make tough calls. He decided, against Shippy’s advice to make changes to the design that delayed the schedule. Early on, Kahle ran into Kutaragi’s intransigence. Kutaragi ruled Sony’s game division with an iron fist, says Shippy, while Microsoft clearly delegated decision making. Kahle wanted the team to put six synergistic cores, or vector processing units that could handle math operations, into the Cell. But Kutaragi insisted on eight, Kahle related to his team, because “eight is beautiful.”

Kahle also had to decide to dispense with a feature dubbed “out of order processing.” This is a more complex way of handling computation. It makes for better performance but comes at a steep price in cost and complexity. That led Jon Rubinstein, who was then an executive at Apple, and Bob Mansfield of Apple to scream bloody murder. It meant that Apple would likely still fall behind Intel in microprocessor performance. And it was one of the decisions that led Apple to defect from IBM’s PowerPC architecture to the Intel platform. This caused a huge shift in the bedrock of the computing industry. I saw all of this happening from the outside as IBM jilted Apple in favor of Sony. But it’s interesting to see the names and circumstances under which the decisions were made. In Kahle’s defense, the decision was necessary to keep the Cell chip on track. IBM also was very heavily focused on server chips, rather than serving Apple. In other words, there were other things about the IBM-Apple relationship that led Apple to go to Intel.