On Monday Thompson Financial News reported that the chipmaker paid $110 million in cash, and expected to close the deal within five days. Intel announced the deal on Friday without disclosing the price.

Renee J. James, VP and general manager of Intel's software group, said in a statement that the acquired technology would become a "key element of Intel's visual computing and graphics efforts."

Havok's software tools have been used in making such games as "BioShock," "Halo 2," "Half Life 2," "MotorStorm," and "Harry Potter and the Order of the Phoenix." The technology was also used in building the online game and social network Second Life, and was used in the making the special effects seen in "The Matrix," "Poseidon," "Troy," "Kingdom of Heaven," and "Charlie and the Chocolate Factory."

The acquisition is widely seen as upping the competition between Intel and Advanced Micro Devices, which bought graphics chipmaker ATI Technologies in 2006 for $5.4 billion. ATI Technologies' products are used to render graphics on a PC faster by taking the task way from the general-purpose CPU.

Havok has offices in San Francisco, San Antonio, Stockholm, Calcutta, Munich and Tokyo. Intel said it plans to make Havok a wholly owned subsidiary operating as an independent business.

"Intel's scale of technology investment and customer reach enable Havok with opportunities to grow more quickly into new market segments with new products than we could have done organically," Havok chief executive David O'Meara said in a statement.