The software company on Monday said it has entered an agreement that will allow it to use IBM's processor technology in new Xbox products and services.

Although details on the next version of the Microsoft video game console remain scarce, the software maker has begun lining up the suppliers whose technology it will need to create the product.

Microsoft plans to combine its resources in software and research and development with IBM chips, Robbie Bach, senior vice president of Microsoft's Home and Entertainment Division, said in a statement.

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