Intel GPU in next xbox ?

I doubt this will happen , considering how developers are saying its hard to program . The prospect of real time ray tracing is exciting though ..

Link

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Putting Larrabee in the Xbox 3 would be a mistake rivalling what Sony did when they put CELL in the PS3, not because it's hard to program for but because Larrabee will be inefficient for graphics.  MS is too smart to let that happen.  Besides aren't they developing their own chips inhouse?  I doubt MS would chuck their development time for that.  I could see Intel offering MS heavy discounts to have Larrabee as a co processor in addition to a CPU and discrete GPU, although I doubt MS would be interested.  It wouldn't be economical and it breaks the simplicity of their design.  One of the major advantages they enjoy over Sony this gen.

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I thought MS were developing their own CPU chip not a GPU and why would the larrabee gpu be inefficient for graphics ?

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Yeah you're probably right about the cpu and not the gpu.  It doesn't matter though, I still doubt they'd go with Larrabee.  It's more likely they'll go ATI again for their GPU.  AMD is strapped for cash, I'm sure they'd give MS a deal again just to get some additional business.  At the same time they really don't want Larrabee to take off.  They already have Intel kicking their ass in the CPU market, the last thing they need is to fight them in the GPU world on top of Nvidia.  Besides ATI has excellent performance/watt with their latest GPUs, future generations will only get better.  Nvidia would also be a good option but MS was burned by them with he deal they made for Xbox
Larrabee will be terrible as a dedicated GPU.  It will only be suitable in the low end-mid range videocard or as a co processor to the CPU and GPU for a high end system.  Not something you want in a console at all.  It's mostly designed as a general purpose parralell processor, it's not as graphic specific as something ATI or NVIDIA are focused on.  It still has everything thats neccessary for graphics though with the right software.  Technically it would be more accurate to call it a (many cores) CPU with gpu instructions built in.  They're basically taking a modified Pentium (the original) and sticking 16 maybe 32 of them together.  It's scallable.  So you can see how this would be great for general purpose computing for havilly parrallel stuff.  It's sort of a cross between a CPU and GPU, jack of all trades, master of none.  Actually it will do some things better than either a traditional CPU or GPU, graphics is not one of them in terms of performance per transistor.   
I doubt it will take off as a dedicated GPU, as an enthusiast I wouldn't mind having it as a co-proccessor to the CPU for stuff like encoding.
A great article on Larrabee.
http://www.anandtech.com/cpuchipsets/intel/showdoc.aspx?i=3367&p=1

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