Tokyo - Sony plans to significantly reduce spending on the Cell processors that power its PlayStation 3 video game console, and may begin outsourcing all production, a senior executive said on Tuesday, Reuters reported.

The company has invested $3.8 billion since 2004 in developing and producing Cell processors. The cost of the Cell, along with the company's Blu-ray technology, led to a relatively high price tag for the PlayStation 3.

Sony executive deputy president Yutaka Nakagawa told Reuters the company's investment will come down significantly, and that Sony will rely more heavily on third parties to produce its processors.

"When we first offered the PS2, there were no semiconductor companies that were able to make chips for the machine, so we did it ourselves. But now, there are companies that specialize in (such) chip production," Nakagawa said.

"Our basic understanding is that we probably won't need to do everything by ourselves for next-generation chips."

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http://tinyurl.com/2dhkyj (Reuters)