AMD is releasing new graphics chips that allow movie makers and game developers to render 3D images in real time.

The new Radeon 4000-series graphics cards, which deliver 1 teraflop of graphics performance to increase the level of realism brought to images, will be available starting next week, and companies including Falcon Northwest in the US will develop systems based on the new graphics chips.

The new processors include the ATI Radeon HD 4850, which will be priced in the $200 range, and the Radeon HD 4870, which will be priced around $300, said Neil Robison, director of developer relations at AMD.

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AMD will next month formally announce the release date of the graphics card code-named R700, which will have two graphics processing units (GPUs) on a single card. Many industry observers expect the R700 to be released in August.

The new hardware will be an integral part of 'Cinema 2.0', a concept introduced by AMD on Monday that will combine hardware and software tools to bring a higher level of realism and interactivity to films and games, said Rick Bergman, senior vice-president of the graphics product group at AMD, at a press event in San Francisco.

Though special-effects rendition is advancing, movies lack interactivity and animated characters affect realism in games, Bergman said. AMD wants to enable movie studios and game developers to render 3D graphics in real time and make game graphics more like real life, Bergman said.

The ability to combine gaming and film-making benefits studios, as it allows directors to be more interactive on the fly. Directors could possibly make the movie and game simultaneously on set, said Charlie Boswell, director of AMD's digital media and entertainment business.

While mostly conceptual, Cinema 2.0 has been brought to life by Jules Urbach, whose company, Jules World LLC, rendered graphics to fit in movie environments using AMD's Radeon 4800 series chips. Urbach demonstrated the 3D virtual world of a lifelike New York City street developed entirely on a computer, with the ability to move around and zoom into locations.

Urbach's company is also rendering life-like characters and scenes for a number of upcoming movies, including 'Dark Country' from Sony, which uses 3D cinematography to make the storytelling experience more realistic.

AMD is inviting game developers and Hollywood directors to take part in Cinema 2.0, although because graphics technology is developing rapidly, the company isn't sure whether it can create an industry standard of hardware and software services surrounding the Cinema 2.0 concept, Bergman said.