Microsoft's second version of its Xbox console will feature a CPU with PowerPC cores, according to GameSpy, which claims to have scooped the specifications.

Expectations that the console would be formally announced at the Game Developer Conference in San Francisco this week were quashed last month.

Xenon, as it's codenamed, will feature ATI's next-generation graphics card and a 12X dual-layer DVD. The system will also have a camera, to liven up online gaming, while the hard disk is optional.

Sony's third-generation PlayStation will use the 4Ghz Cell processor jointly developed by IBM, Toshiba and Sony's microprocessor division. Sony is expected to unveil its killer handheld PSP in May.

Microsoft's entertainment division turned in its first profit in the most recent quarter, thanks to sales of the game Halo 2 - but executives don't expect it to be consistently profitable until 2007. ®

Related stories

Hackers sued for tinkering with Xbox games
PlayStation 3 launch 'ahead of E3', says Sony
Multi-OS Cell CPU tops 4GHz
The Cell Chip - how will MS and Intel face the music?
Sony points to 2006 PS3 ship date