Microsoft Developing Console Chips
The Cheesecake writes "The New York Times is running an article that says that Microsoft is looking into designing and developing microchips. These will primarily be for the next generation of the Xbox. They also mention it could be used for things like voice recognition. They look to be doing this through a process designed by UC Berkley which makes it possible to reconfigure computer designs without the cost of making finished chips."
Until someone mods the Xbox 360, they've effectively removed that ability from it as well. The DVD firmware hack will only let it run copied games, not unsigned code.
They are using a system that allows them to evaluate the performance of different potential designs without actually fabbing a prototype. The Berkeley system is basically a board with a handful of FPGAs (a cheap QuickTurn box).
Microsoft Robotics You're too late.
IBM's PowerPC design is in all the next-gen consoles, PPC was in Tivo too. IBM has a lot of PPC systems in the Top 500 supercomputer list. I wouldn't call PPC a commercial failure. A lot of embedded designs still use ARM variants (Intel's XScale was derived from DEC StrongARM), among others. I think MIPS is used in a lot of embedded systems, take a look at Linksys's WRT54G. When you get away from what you'd call a conventional computer, there are a lot of viable CPU architectures.