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3Dfx No More -- NVidia Purchases Video Card Maker
Posted by
timothy
on Fri Dec 15, 2000 05:49 PM
from the alas-we-hardly-knew-ye dept.
from the alas-we-hardly-knew-ye dept.
Julius X writes: "This just came out, from Yahoo, 3dfx has announced that they will be sold to NVidia as soon as the deal is approved by its shareholders. From the release, "After aggressively pursuing a wide range of options that take into consideration the interests of our creditors, our shareholders, our employees and our customers," said Alex Leupp, president and CEO, 3dfx Interactive Inc., "we strongly believe that to reduce expenses, sell our assets and dissolve the company provides the highest return to our creditors, shareholders, and employees." I think we all saw this one coming. For more details, go to the press release." Actually, tossing in some details early is [hk]doogie, who writes: "Nvidia bought the patents, pending patent applications, trademarks, brand names, and chip inventory related to the graphics business of 3dfx. Get the full scoop [here]."
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3Dfx No More -- NVidia Purchases Video Card Maker
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I'm sorry! It's may fault! (Score:5)
I went and bought a V3-2000 videocard last weekend. Finally gave up on trying to pump Unreal through 4-year-old technology.
And I really, really should have alerted the world about my purchase.
You see, this sort of thing happens to me on a regular basis.
Call it the Purchase of Deth syndrome. The reverse Midas touch. With friends like me, what company needs competition?
Needed a sound card. Picked out Gravis as the best. Company went under a few weeks later.
Needed a video card. Picked out a Diamond Monster. Company quit the video business shortly after.
Needed a sound card upgrade. Picked Aureal A3D. It shut its doors a few months later.
Needed a new video card. Picked out a 3DFX Voodoo3-2000. Bang, within ten days, they fold.
Tell you what... I'll make up for all that.
I'm off to purchase some Microsoft products. Hah! That'll teach the bastards...
--
Re:ATI (Score:4)
Bzzt! Thanks for playing! As of two weeks ago, Rage 128 and Rage 128 Pros running OpenGL under Linux Quake 3 [as an example] now generally outperform Windows, thanks to drivers ATI commissioned from Precision Insight. Download them from ATIs site.
Re:I'm confused... (Score:4)
As a long-time investor in 3D graphics stocks (Unfortunately for me, 3dfx mostly), I'd have to say this is not quite right. At the start of the 3D graphics industry, the order would have been something like this:
ATI, S3 == Incumbents
3dfx, nVidia == Underdogs
Yes, us geeks derided the Virges and Rage boards as crap, but they sold to the people that mattered (OEMs, corporate sales), and as a result both ATI and S3 grew absolutely huge. Either of them alone dwarfed nVidia and 3dfx combined in almost every measure -- market cap, revenue, profit, units sold, overall market share, etc... The only important exception was probably in the (tiny) retail market, where 3dfx was #1 for a while. 3dfx was only the leader in performance (for a time) and mindshare--important to geeks but not to suits.
As the market evolved, S3 faltered in their transition from the Virge to Savage chipsets. nVidia began to take away big chunks of ATI's core business (OEM sales). 3dfx manages to hold onto a slim lead in retail and brand name recognition, but the retail market is too small to support the company, and they begin to struggle financially. The field changes into something like this:
Incumbent == ATI, nVidia
Underdogs == 3dfx
Has been == S3
Then, nVidia went for ATI's jungular. The GeForce was originally a high-end, low volume part, but the MX version is making big inroads into both the retail and OEM market. Now, nVidia is about to release both mobile laptop chipsets (Where ATI currently is dominant, having wrested control away from Neomagic) and two versions of a motherboard chipset with integrated graphics. nVidia has continued to take business away from ATI, and is now on top of the pile by most important gauges. So, the modern order looks something like this:
Incumbent == nVidia
Underdog == ATI
Has Been == S3, 3dfx
Now, I've sort of neglected some players here. Matrox, Videologic, etc., but most of those have been niche players.
Not a disaster, but not good (Score:4)
On top of that, as others have pointed out, 3dfx is much better about open drivers than Nvidia. It's the same reason most of us want Netscape to triumph over MS, because mozilla is open source, and IE will go open source sometime around when Hell freezes over.
Yes, this is the natural result of 3dfx not doing a good job. Yes, there are some other graphics card makers out there. However, there aren't a lot of them, and Nvidia may be able to use their market position to drive up the price of cards, which is obviously bad for all of us. What do you expect people to say? "Hooray, now I won't be as confused by all the choices next time I buy a video card?" This may not be horrible, but there's really nothing good about it either.
id (Score:4)
Wait a second...
This is a misleading statement. id said they wouldn't provide a separate Linux-only CD-ROM for purchase at your local software outlet. They'll still be supporting Linux through downloadable binaries. And if you think your Q3TA CD will be good for anything besides reinstalling graphics and models after the first patch to the binaries, you should think again.
Sure, nVidia should allow open source developers to see specs on their hardware so free like speech drivers can be developed. You have a great point with a non-great example.
Re:What will happen to open drivers? (Score:3)
I doubt it. NVIDIA's Q&A [nvidia.com] says, "The structure of this deal allows NVIDIA to purchase certain assets that are consistent with our business model without acquiring 3dfx liabilities." One of these liabilities, apparently, is the current Voodoo line: "The remaining 3dfx entity is responsible for their current product lines and retail channel. ...
The 3dfx product in the channel and installed base and customer support remain the responsibility of 3dfx.
It is best to check those details with 3dfx management."
After this deal, there isn't going to be a "remaining 3dfx entity." According to the 3dfx press release, the "board of directors will recommend to its shareholders that they ... approve a plan to dissolve the company following completion of the asset sale."
The creditors will lick the plate clean, any remaining employees will be fired, and Nasdaq will remove TDFX from the ticker.
Care for a round of, "Can You Top This?" (Score:5)
You think you've got it bad...
Once upon a time, I fell in love with the Amiga computer. I bought one as quickly as I could, and was happily hacking on it for years. I thought it was a really neat system, and it died.
Roughly parallel to that, I got to work on CDTV, which was a "consumerized" version of an Amiga 500, intended to directly compete with Philip's CDI. I helped create what is still probably one of the best CD audio players ever done for a "home" gaming/multimedia system. I though it was a really neat system, and it died.
After that, I was fortunate enough to be invited by RJ Mical and Dave Needle to join NTG (New Technologies Group) who were working on what was to become the 3DO Interactive Multiplayer. It was based on the ARM-60, had ass-kicking graphics and sound capabilities, and a nice tiny OS that owed much of its heritage to the Amiga. I thought it was a really neat system, and it died.
Undeterred, we went on to design M2, the 64-bit follow-on to the 3DO Multiplayer. This thing had a 3D chip that did 32-bit rendering and outperformed 3Dfx's PC offerings at the time. It was also slated to have two 66MHz PowerPC 602 chips running the show. I thought it was going to be a really neat system, and it died.
I now work for Be, Incorporated... And I think it's a really neat system.
Schwab
Well isn't that special? (Score:4)
No wait, sorry, we're still gonna sell cards [slashdot.org]!
Ah screw it, we suck, let NVIDIA have it all.
And I thought the wife's moodswings were bad. Sheesh.
Let's look at how all of this happened... (Score:4)
- In the beginning... 3D graphics chips were *really* expensive, running to the thousands of dollars and only working on certain hardware.
- Then simple 3D graphics chips like S3's ViRGE (shudder) came along. They were slow and had a horrible framerate (the ViRGE is commonly referred to as the world's only 3D decelerator), but actually made the pictures look a bit more smooth. This trend continued for a while, until...
- 3Dfx released the Voodoo, ushering in really nice second-generation hardware acceleration. With high-res, high-color-depth and smooth framerates, they became the overnight champ. They scared the daylights out of companies like Number 9, S3, ATI and all the other 3D chipmakers. The only card these companies had was that the Voodoo was a secondary graphics card; it didn't do 2D. The other problem was that the Voodoo really only worked with Glide; most other graphics chips could work with OpenGL.
- 3Dfx tried to fix this problem with the Voodoo Rush, which was essentailly a 2D chip hot-glued to a Voodoo. The Rush failed miserably (First slip: Don't cobble together a half-assed product. Gamers and reviewers always know the difference.), because 3Dfx did not take into proper account the interaction and integration needed to make the 2D and 3D work together. 3Dfx then released the Voodoo2 (essentially a sped-up Voodoo), to much critical acclaim. Still, Glide was the only graphics system that it really worked with, and 3Dfx was convinced that Glide would eventually replace OpenGL. (Second slip: Hubris has brough down more empires than one can imagine. Always know that you are mortal.)
- Around this time nVidia was starting to show signs of becoming a good chipmaker. While early chips like the NV1 were absolutely laughable when compared to the mighty 3Dfx chips, nVidia was busy trying to prove that they were fast learners (the Riva 128 was considered a great chip for gamers on a tight budget).
- The release of the TNT was the first real threat to 3Dfx's business; it was fast, ran OpenGL & Direct3D (at the time a horrible choice for anyone, but there nonetheless) and also did 2D. At first 3Dfx tried to convince itself (and us) that the future would be powered by Voodoo/Glide, but when reviews of TNT chips essentially matched the Voodoo2, 3Dfx knew it was in for a fight to the death.
- 3Dfx had to do something; people were buying TNT cards, and that spelled trouble. 3Dfx ultimately decided that their best (only?) option was to do it all: the chip and the board. They bought STB (right after I bought my PC which had an STB graphics card and a TNT chip -- doh!) and stopped selling Voodoo technology to third parties, most of whom immediately jumped into bed with nVidia (remember how pissed off Creative was?). The Voodoo3 would come from only one source: 3Dfx. (Third slip: Don't alienate the very people who provide most of your revenue, i.e. boardmakers)
- As the Voodoo3 and TNT/TNT-Ultra waged war, gamers were slowly coming to realize that nVidia's chip was just as fast (or faster), on par with price, and didn't require the proprietary Glide. PC makers also realized this and started shifting towards nVidia graphics boards. And since they came from a variety of boardmakers, the PC makers could pick and choose their vendor while still using the nVidia core. Meanwhile, 3Dfx watched their sales plummet as they realized that shipping the Voodoo3 without support for 32-bit color was turning many gamers away. (Fourth slip: Of course we didn't need 32-bit color support then; most games turned into slideshows at that depth. But the first rule of business is to make the customer happy.
- nVidia also got gamers horny by releasing a new chip approximately every six months; 3Dfx was releasing at a rate of one new chip about every year to year-and-a-half. 3Dfx had failed to realize that hardcore gamers demand speed, and that gamers will do just about anything within their power to get that little extra boost of speed from their machines. (If you don't believe me, visit Tweak3D [tweak3d.net] and see for yourself.) 3Dfx was also having serious financial problems; between the collapse of the dot-com-saturated market bubble and disappointing sales, 3Dfx must have realized that going solo was a terrible mistake.
Since then, 3Dfx has been in free-fall, and the announcement of their sale is just the SPLAT of a once-mighty graphics giant hitting the pavement; even their open-source drivers were not enough to save them. 3Dfx never developed (or at least never released) a new architecture; the V2 through V5 were essentially speed upgrades and hot-glue-and-duct-tape "new features" to their now sorely outdated and overworked architecture. (Why do you think they have required so much more power and cooling? I mean, a power brick for the V5? Are they kidding me?)Also around this time, most other 3D chipmakers (like Number 9, PowerVR and S3) were frantically trying to stay in business. A couple of them made it, but most either quit the 3D market or fizzled. 3Dfx was riding high, and went public amidst the dot-com market inflation. Things were looking good.
Meanwhile, nVidia continues to dominate the market; they will provide the precious GPU for Microsoft's upcoming XBox, and the GeForce 2 Ultra GTS Pro Whizbang 7 Foomlegricken Supersize (or whatever the hell they call the latest chip) consistently garners rave reviews among journalists and gamers alike. Even the lack of open-source drivers hasn't stopped people (even open-source advocates like myself) from going with them. In short, 3Dfx got beat by a company with a real third-generation graphics chip, but not without help from itself.
I am sorry to see them go; they were nVidia's biggest rival, and I am always a fan of good competition. My only hope is that nVidia open-sources their own drivers, and perhaps learns from 3Dfx's mistakes. No, I hope we all learn from 3Dfx's mistakes.
Robert Dumas (robertdumas@hotmail.com)
What will happen to open drivers? (Score:4)
As Nvidia has claimed that a big reason not to open their drivers is that they are forbidden to do so because of NDA:s with technology partners, one possibility is that as they now own 3dfx technology can use that in place of (probably quite expensive) 3rd party stuff. That would mean more the possibility of increasing the openness towards developers.
Comments from a screwed 3dfx shareholder... (Score:5)
OK, details on this are pretty sparse, but at first look it looks really, really bad for us shareholders. The Motley Fool board has the most active and knowledgable group of 3dfx investors out there, and on that board, some of the mostly highly recommended (ie., plus moderated) messages there right now happen to be pure profanity. Some folks there have suggested we may be getting as little as 0.30 a share, if anything.
It looks like nVidia may not actually be "buying" 3dfx. Rather, it looks like they will be cherry picking the few assets worth anything, like the designs for 3dfx's next products including Rampage (And it's associated T&L chip, Sage) and Mosaic, and leaving 3dfx as a hollow shell containing nothing but a near-worthless boardmaking plant and lots of debt--in other words, completely screwing over the shareholders in the worst way possible. This hollow shell would also probably be responsible for for providing support, warranties, and driver updates for anybody out there owning a 3dfx card.
Basically, it looks like I may as well write off my entire investment as a loss, and consider it tuition in the school of hard knocks.
More info... (Score:5)
Its really a shame with all the problems that 3dfx has had that they couldn't pull it out of the gutter...they started out great, and made the best products back in the day...if they hadn't bought STB, I doubt this would have ever happened.
-Julius X
Re:What will happen to open drivers? (Score:5)
With open drivers and open specs, you know that support for your precious card will only get better in the future - as time goes, someone will improve it, and they have full access.
With closed drivers, your card will work fine today. But what if NVIDIA tomorrow does an "ID Software" and says that they won't support Linux in the future, due to that niche being to small? Then your card is just a worthless piece of crap... the binary drivers won't be upgraded and you are suddenly stuck with having to use old kernels and old XFree86:s.
Openness is not as much as about today as it is about tomorrow. Personally, I like to decide myself when I want to scrap my hardware.
OK, help me list who's gone now... (Score:4)
Dead:
Tseng Labs - gone.
Western Digital - out of the business.
Number 9 - gone (?)
Orchid - gone (?)
Hercules - gone in all but name.
Cirrus - Out of the graphics business.
Neomagic - Moving out of the graphics business.
Alliance - Out of the graphics business.
MIA:
C&T - Purchased by Intel.
3D Labs - Purchased by Intel.
Rendition - Purchased by Micron.
S3 - Purchased by VIA, now focusing on "integrated chipsets".
Trident - Still making low end cards, mostly living off proceeds from well-timed investment in UMC.
Still kicking:
Matrox - Appears to be focusing on corporate and 2D markets. Private company, so little info on internal status.
Videologic - in Sega's Dreamcast, still attempting to break into PC market, active R&D. Partners with STMicro.
ATI - Looks like will be in Nintendo's Dolphin, financially still strong (for now). Large (but shrinking) OEM and retail share, dominant in mobile graphics and Macintosh market. Active R&D.
SiS - Low end cards, apparently active R&D.
This is bad, very bad. AOL TIME WARNER bad. (Score:3)
Outlook for the future:
NVidia will rule the graphics card business. The Geforce3 will be at least $400 and will stay that way due to the lack of an alternative. I can only hope that ATI or Matrox can come out with a comperablie card at a lower price, or we'll all be paying a lot more for 3D cards.
Doesn't this sound like AOL TIME WARNER? Two giant industry leaders joining together to become a giant? Monopoly is bad for consumers, with media or 3D cards. Like I said, this is bad.
this is good for the consumer... (Score:5)
In one year, AMD will buy out Intel (or vice versa).
In two years, Microsoft will buy out Apple...
In three years, VA Linux will be purchased by a twelve year old that has been with the money he has earned delivering newspapers for two months.
Re:What will happen to open drivers? (Score:4)
Republic
3DFX + NVidia = (Score:3)
Big problem though: with only one large company the market will disappear. It's as if Intel bought AMD.
Competition in graphic cards, we hardly knew ye.
Re:NV20 (Score:3)
Eep... Even I worry about this... (Score:5)
I am a big NVidia fan (as many of you know). I really think they have better hardware and I love working with the special features they add to their stuff in my 3D game engine. But this news worries me.
I hope NVidia will continue to advance the industry at the same rate as they did in the past. Without 3dfx as competition, their incentive may not be so great as it was before...
However, there is plenty of reason to believe that these concerns are misplaced. The ATI Radeon is a good card, having some features (like the third TMU) which not even the GeForce 2 has. Also, NVidia hardware is now being used in consoles as well as computers. Tough competition in the console arena is pretty much gaurenteed for them. So, as long as they continue to use their console gaming hardware in their video cards, we can continue expect new, better hardware from them.
This really could go either way. We'll have to watch and see what happens. If they do stop advancing their hardware, or charge too much for them, I will stop supporting them. Let's hope it doesn't come to that.
------
Kind of at odds, isn't it? (Score:3)
So, they're laying off everybody in order to preserve the stock value for the employees?
Lawsuits (Score:4)
As far as I can see, this is a win-win deal any way you look at it!
Sad to see them go! (Score:3)
Just speculation here, but I can't help but wonder if the performance video card market is much smaller than assumed. I expect most people just use whatever video card came with their machine. I've read that 80% of all video cards out there are from ATI, because they dominate the OEM market. Having a bunch of big fish fighting over the last 20% would be pretty rough.
Re:ATI (Score:4)
Liquidation (Score:3)
What The Hell? (Score:5)
People, please... are you living in a fantasy land? 3dfx hasn't been any serious competition for Nvidia since the GeForce. As much as you might like to think that the Linux market matters, it doesn't. Nvidia destroyed 3dfx in the Windows market, aka the one that matters.
Contrary to several posts in here, this is not a bad thing. Its the natural course of business.
- 3dfx dominates market
- Nvidia enters market
- 3dfx gets lazy
- Nvidia makes better products
- Nvidia dominates market
- Nvidia continues to make better products, and 3dfx crumbles against the competition.
Its not like Nvidia won because of a Patent war (hello Rambus!), because of backdoor shenagians, or whatever else thats bad. They won by simply flat out making a better product.
People who think this is some kind of disaster want a market where nothing changes. If you actually want innovation and competition, you had better expect that some players will loose at some point! If you want competition but without the potential to loose, you don't really want competition, you want to live in a fantasy world.
ATI is still there, as a better managed company then 3dfx with a better product, they stand a better chance in this market.
Now please... quit bitching about how this is the end of the world. Its not. After the 40th post moaning and whining about it, it really does start to get tiresome.
Survival of the fittest. (Score:3)
A few people here have mentioned the Voodoo 1, 2, and 3's good cost-performance ratios and their stable drivers, and those are very true observations. However, 3Dfx shot themselves in the foot when they stopped marketing their products in any ways that bring in strong revenue. They stopped running television ads and stopped licensing their chip technology to other board manufacturers--and all the revenue dried up right there.
Someone here said that ATI owns 80% of the PC video card market because they get their chips and boards included with OEM systems. ATI has traditionally made somewhat crappy products, but as a business they have thrived because they know how to work themselves into revenue-making positions in the marketplace. They have become so successful as a business, in fact, that they have finally gotten back around to investing more resources in R&D and QA, and the quality of their products has improved radically in the last 2-4 years.
nVidia is especially interesting because they have a pretty even mix (IMHO) of product and marketing excellence. They have figured out how to achieve rapid growth in both areas. The only problem is that they now have only one worthy competitor left on their radar (ATI; Matrox just doesn't have enough market share or technical superiority). When one company in a given industry pulls far, far ahead of all the rest, it means they run the risk of getting lazy.
That hasn't happened with all large behemoths (Sony and Microsoft continue to work hard and produce excellent stuff, for instance), but it has happened with many (General Electric, Phillips/Magnavox). Let's hope that nVidia doesn't get too cozy as it approaches the top of the food chain.
No Need for Chicken Littleism (Score:5)
I see a large number of posts saying that this will lead to stagnation in the video card market, increased prices, blah blah blah, the usual bad things that come with monopoly. I don't think these fears are grounded in a solid grasp of reality.
The video card market is much broader than the high-end-home-user-gamer-speed-freak niche. Although I do not have exact figures to back this up, I'd wager that the total amount of cards sold as integrated solutions (part of a Dell or the like) to both the business and non-gamer household market exceeds the gamer market by a large integer multiple. NVidia IMHO makes the best current 3d hardware, but they have nothing in the business/SOHO/laptop/OEM market that I'm aware of, whereas Matrox and ATI have vast sums of revenue from those markets. With that kind of revenue stream, they could probably each buy NVidia several times over.
In short, don't assume that becuase NVidia has become the de facto monopolist in the gamer market (with a very, very small foothold in the workstation market[1]) they are somehow the totality of the video card market. They will continue to face competition from Matrox and ATI for the forseeable future.
[1] quadro and somebody was telling me the new sgi vpro line of graphics chipsets was based on NVIdia tech
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