Sources claim Nvidiaâ??s mobile-centric system-on-a-chip, Tegra, will power the next Nintendo handheld

New Nintendo DS â??powered by Nvidiaâ??

Graphics chip giant Nvidia has won a highly lucrative contract that will see it provide technology for the next Nintendo handheld, inside sources claim.

Anonymous sources said to be close to the matter insist that the new Nintendo handheld – apparently set to be revealed late in 2010 – will be powered by Nvidia’s system-on-a-chip device, known as Tegra.

Tegra is an ARM-based processor with integrated Geforce graphics, and has been developed by Nvidia for use in smartphones and other mobile devices such as Microsoft’s Zune HD.

The rumoured Nintendo deal would add much weight to bold claims recently made by Nvidia CEO Jen-Hsun Huang.

In June, Huang left analysts dumbfounded by declaring that Tegra will account for as much as 50 per cent of Nvidia’s revenues in the next few years.

A surprise deal with Nintendo could facilitate this aim. The current DS has sold over 110 million units.

Develop has approached Nintendo for comment.

The alleged deal – first reported by IT news outlet BSN, quoting anonymous sources – will see Nvidia develop a single-chip Tegra processor for the next Nintendo handheld.

BSN reports that Nvidia’s technology will allow Nintendo to deliver a device that’s technically superior to the DSi system.

If true, the deal would not represent the first time both Nintendo and Nvidia have partnered this year.

In March Nvidia signed an agreement with Nintendo to become a third-party tools provider for the Wii console, meaning that Nvidia’s PhysX SDK would be available to registered Wii developers.

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