I've known for a while, and even mentioned on Ars, that Intel has a team that's actively courting the Sony PlayStation 4 contract, and Intel VP Pat Gelsinger affirmed to me in an interview that the company would love to be in a next-generation console. But The Inquirer's Charlie Demerjian has published a whale of a post-CES rumor claiming that Intel's forthcoming Larrabee GPU did indeed score the GPU spot on Sony's next-gen console.

There will be a ton of skepticism over this, and for good reason—I myself have actually had informal, off-the-record conversations that indicate to me that there may not be a lot of love for Intel on the technical front inside of Sony. But this rumor has a lot going for it. I'll enumerate the plusses and minuses below, but before jumping in let's hand the mic over to official Sony PR for their take.

"We do not comment on rumors and speculations. Our utmost priority is to further increase the installed base for PS3 and PSP, with more new and exciting entertainment and services (game/non-game and package/network)," a Sony spokesperson told Ars. "PS3 is still in its third year from launch and it is too premature to talk about the next-generation home platform. At this time, nothing concrete has been decided."

I actually believe that nothing concrete has been decided. But Sony may be leaning one way or the other. Let's look at the forces at work.

It's all about the (rapidly shrinking) bottom line

The number one, overriding factor in any decision that Sony makes right now is money—and I don't mean, "how will we grow our console marketshare and conquer the living room," but "how will we stop hemorrhaging money and ensure that, whatever happens with the next generation of consoles, we attain profitability with the PS4 as quickly as possible." Given this new reality, I find Charlie's claim that Intel essentially bought its way into the PS4—technical considerations be damned—very convincing.

This "ten-year console" stuff, where Sony looks at a console's overall profitability over the course of a decade? That's the kind of thing you can afford to do when you're not staring into the abyss. Intel has deep enough pockets and enough fab capacity to take a real hit to its margins on Larrabee and offer Sony a cheap GPU with guaranteed availability. If any semi maker is going to survive this recession and come out the other side still fully invested in the success of a discrete graphics product, it will be Intel.

As for the Kuturagi-style grand visions of Pixar-quality graphics in the living room, and networked consoles all changing the way we entertain ourselves, that, too, is bull-market bull. With the PS4, Sony will just want to stay in the game, and have a very quick path to profitability. One might even go so far as to say that, at this point, Sony execs probably wish they had gone the Wii route.

Note that these same financial pressures also drastically change the cross-platform development equation from the console vendor's perspective. In the distant, more profit-friendly past past of early 2008, console makers still courted exclusive titles, and Sony in particular counted it as a major plus that games optimized to take full advantage of PS3 wouldn't be easily portable to Xbox or the PC.

But in today's world of shrinking margins, Sony's incentives have shifted 180 degrees, and with Larrabee (especially if it's paired with a Nehalem-derived CPU), Sony can actually boast, "write it once, run it on the PlayStation 4 and the PC," to developers.

To sum up, Sony has paid a heavy price for its efforts to attract exclusive titles to the PS3 by promising developers superior visuals, and that's a price that the company cannot afford to pay with its next console.

What about Cell?

My guess is that if Sony were free to fantasize about the console that it would ideally like to produce with PS4, it would probably just double down on Cell. And why not? The same things that make Cell hard to program will also plague Larrabee. The programming problems that come with the many-core paradigm—a paradigm that both Cell and Larrabee fit under—are fundamental, algorithm-level design problems that are essentially ISA-indifferent. (Yes, this is a shift from my previous "x86 will own the GPU stance.")

So Sony could safely just do more of Cell with PS4 by just increasing the number of dedicated vector units and general-purpose cores. This would also give the company free backwards compatibility with existing PS3 titles, and, of course, enable it to leverage existing investments in the PS3 developer toolchain and in Cell itself.

Ultimately, the question of which horse Sony bets on next hinges on the numbers, and specifically on whether Intel is able to paint Larrabee as the cheaper option going forward, even when the cost of ditching the hardware and software investment in Cell is factored in.