Sony flogs PS3 chip lines to Toshiba

Playstation manufacturer Sony has revealed that they are ceding the manufacturing facilities behind Playstation's Cell chip to Arch-rival and one-time partner, Toshiba.

In a deal worth roughly £550m, Toshiba will take on the responsibility of producing the chips for the Playstation 3 and other related products as well as Sony's RSX video processor.

Sony has been hit by disappointing sales of its leading gaming console, the Playstation 3 and is set to concentrate on its core electronic segment in order to improve its bottom line.

The news also come as Sony introduced a new cut down version of the PS3 in order to improve sales.

The Cell processor was developed by Sony together with IBM and Toshiba and was destined to become a potential rival to computer microprocessors.