Although AMD already announced that Nintendo is using a custom AMD Radeon RV770 GPU in the upcoming Wii U console, there's now talk that AMD GPUs will also be used in the next PlayStation and Xbox consoles. The news is based on a rumor stemming from E3 2011 claiming that it's literally a "done deal" with Microsoft and Sony. Unsurprisingly, this is the first we've heard of this particular GPU tale... there wasn't any mention of AMD hardware in a gaming console outside the Wii U, public or in private, during or after the show.
On the CPU front, we already know that IBM is providing the 45-nm multi-core "heart" of the Nintendo Wii U. As for the third generation Xbox, IBM is also supposedly lined up with a possible Cell processor. Current rumors indicate that Microsoft will reveal the console next year at E3 2012, but there's indication that the company may hold off an additional year or two due to the success of the Kinect. This little tidbit doesn't make much sense given that the next console will likely support both Xbox 360 games and Kinect anyway.
As for Sony's effort, reports on the PlayStation 4 processor are a bit more murky than the other two, ranging from an AMD APU (Bulldozer) to a newer updated 32-nm IBM Cell processor. The new Sony console is also expected to make an appearance next year at E3 2012, so we expect to hear something more solid before then. Again, like the Xbox, it is all mere rumor until we start getting closer to the next show and tidbits of more information are "leaked" out.
Honestly, if the Big Three manufactured consoles with IBM processors and AMD GPUs across the board, development would seemingly be a lot easier for those creating multi-platform titles. Even more, if all three integrated native support for a mouse and keyboard, there wouldn't be such a wide gap between PC and console gaming. The OnLive service and its mini-console, which is about the size of a Nintendo DS, has already proven that mouse/keyboard and gamepad control setups can coexist on one device.
Just recently OnLive's VP of Engineering Joe Bentley said that the company is now talking with Microsoft and Sony about bringing its tech to the consoles. "There are OnLive guys chatting [with Sony and MS], but we'll see where it goes," he said. "But it would absolutely work, we're ready to work with everybody. Our controller is a hybrid between a PS3 controller and an Xbox controller. It's all compatible, it would just work."