For its part, Nintendo has denied that any such discussions have taken place, but the timing certainly fits; the company would need to be seriously working on a successor to its current hardware about now, and it has successfully partnered with NEC on development in the past.

If true, the rumour would finally lay to rest claims from certain areas of the media that Nintendo plans to leave the hardware business after the GameCube, following in Sega’s footsteps to become a third party publisher for consoles from Sony and Microsoft.

This rumour originated from comments made by NCL chairman Satoru Iwata in a speech made shortly after his appointment, when he said that it was becoming increasingly difficult to woo consumers with impressive new hardware, and that a focus on software was required instead. Although most commentators saw this as a thinly veiled attack on Microsoft’s massively powerful Xbox, other interpreted it as a tacit admission that the company would no longer develop new hardware platforms.

Source:Gamesindustry.biz, Bloomberg, Gamespot