The nVidia-3dfx acquisition
As everyone knows by now, 3dfx is unfortunately no longer. On Friday, December 15, the once-important chip designer decided to dissolve the company and sell its core assets to nVidia. The current 3dfx products will remain under the regime of 3dfx, but the question is what they will do with them. The poll that was set up yesterday already showed that most of you think that is a loss for the industry. At the time of writing this, about two thirds of the readers have voted for ‘I especially regret that a once successful company like 3dfx had to go down in this way’ or ‘Less competition, so bad business ‘. But is this such a pity?
In my view, nVidia has moved to take over 3dfx due to the lawsuits that 3dfx brought against them and won (see this news item for more information). 3dfx would demand a lot of money from nVidia for abusing their patents, but for that money nVidia, which has grown into a much bigger company than 3dfx, could easily buy 3dfx. That nVidia decided to take over 3dfx for this reason can also be seen in the interviews with Brian Burke of nVidia (formerly 3dfx). In this interview on Gamers Depot, he briefly says:
A couple of things, it gives us some good technology, and it’s a nice infusion for us. This should also make the lawsuits go away.
Although the interviewer doesn’t ask for this, Brian himself starts talking about the lawsuits. He does this again in the interview FiringSquad had with him. The interviewer asks Brian if there will be any issues with the US Antitrust Commission over the takeover, to which Burke replies, plus something extra:
We do not expect to encounter any anti-trust issues at this time. We are submitting the transaction for approval under the Hart Scott Rodino Antitrust Improvements Act of 1976. On a side note, when the deal is finalized, all the patent lawsuits between NVIDIA and 3dfx will be dismissed.
What the heart is full of, the mouth is full of, shall we say. Were there actually other reasons to buy 3dfx?
There is also the new technology that nVidia is now getting at its disposal. This is a nice extra, but certainly not a convincing reason for nVidia to buy 3dfx. nVidia currently has the fastest video card in the shops. An even faster GPU is, if we can believe the latest reports, almost finished. Matrox has indicated that it will no longer focus on video cards for gamers. S3 has sold its consumer graphics division to VIA, which hasn’t done much with it yet. And there’s been surprisingly little news to report on ATi lately; in Anandtech’s previewof video cards in the year 2001, there is mainly talk of budget products from ATi, and the vague mention that ‘MAXX technology can be used again in the future’.
So there is almost no competition. nVidia absolutely did not need the technology of 3dfx to continue. Some argue that nVidia needed 3dfx’s Hidden Surface Removal technique to make the NV20 a success, but lately it has become clear that nVidia itself was also working on a similar technique. nVidia also buys the SLI technology, but they themselves have always indicated that they prefer to make single-chip solutions, because they are easier and cheaper to produce (after all, the reason for canceling the Voodoo5 6000 was the cost). nVidia now also owns future chips from 3dfx such as Rampage, Specter and Sage. In the latest speculations, however, the Rampage was not significantly faster than the NV20, so in this case nVidia also has more to develop their own chips.
A reader of 3D Chipset claims in this post that nVidia also bought 3dfx to be stronger in any lawsuit against Rambus. The latter has recently indicated that it is demanding money from nVidia for violating Rambus patents with the memory controller hub used in nVidia’s video cards. Because nVidia now owns more patents, the lawsuit would become more difficult for Rambus. A bit of a far-fetched theory, partly because the patents bought from 3dfx don’t really have anything to do with memory controller hubs.
So: case closed, nVidia bought 3dfx so they wouldn’t have to pay money to them. What does this acquisition mean for the future of this industry? nVidia will continue what they were doing, the development of the NV20 will not suddenly be changed. We may see some of Gigapixel’s tile-based rendering technology in future GPUs, but as I mentioned earlier, I expect nVidia to be working on this kind of technology internally as well. It’s a pity that the competition in the form of 3dfx has been eliminated, which of course puts some less pressure on nVidia, but since there wasn’t really a big threat from 3dfx (not even with the rampage) and 3dfx never got around to it could afford to start a price war (3dfx has been losing forever),
nVidia has in principle also bought the brand names 3dfx and voodoo, but I suspect that nVidia will not really make much use of these names in the retail market. Although the term ‘3dfx card’ still stands for a 3D card to many ignorant computer users, high-end buyers and anyone who does some research before buying a computer prefer to see GeForce on their card. What is possible is that the 3dfx brand name will still be used in making maps for OEMs. From my own experience – having a job as a computer salesman, I’ve seen it up close enough often – I can say that many buyers of OEM computers (Compaq, Packard Bell, IBM) still like it when the specification list includes the name ‘3dfx’ can be found. After a year,
In short, it is very unfortunate that there is one less company in this market, but the influence this acquisition has on the development of video cards will not be so earth-shattering. 3dfx was a pioneer, a company of people with a heart for the business, but who did not yet know much about business management. When a real professional shows up, with people who have already proven in other companies that they know the tricks of the trade, they unfortunately have to acknowledge their superiority.