Not long ago, there were several rumors flying around that NVIDIA was about to purchase 3dfx. While it makes sense that NVIDIA eliminate competition through assimilation, the timing and price was prohibitiave to that action. After two dismal quarterly earnings reports in a row, 3dfx found itself in a position where they had to decide how best to ease the pain of the investors. This lead to "The Acquisition"
We had a few questions for the new web and print PR rep, Brian Burke. Brian had previously covered the PR duties at 3dfx and STB prior to the merger that allowed 3dfx to go vertical.
nV News: When did you find out about the acquisition?
Brian: When I started preparing for press inquires.
nV News: A FAQ was pulled from the NVIDIA website. Why?
Brian: Our legal council advised us too.
nV News: What are the main technologies 3dfx can offer NVIDIA. If NVIDIA decides
to incorporate 3dfx technologies in future products, what timeframe are we looking at?
Brian: 3dfx has award-winning graphic technology and a very impressive patent portfolio. We have not determined our plans for the newly acquired technology will be used.
nV News: In my eyes, the financial stress of the Gigapixel acquisition caused 3dfx to fall behind number wise and cause investors to run. Will the buyout pay off for NVIDIA? In what ways? The lawsuit? New technology? Less competition?
Brian: NVIDIA believes that 3dfx has a tremendous amount of expertise in graphics technology. 3dfx, with its patented and award-winning technology, has been recognized is a pioneer in 3d graphics.
NVIDIA as the worldwide leader in graphics processors and media communications devices has been on a phenomenal growth path over the past few years. From $29 million in revenues in 1997, the Street expects us to reach over $700 million in revenues by 2001. We want to continue on that growth rate by expanding in to new areas and add widening our product offering.
And as a nice bonus the cross litigation with 3dfx will be ended.
nV News: What is the mood at NVIDIA regarding the acquisition? Excitement? Why?
Brian: We are very excited. Along with the great technology, we get an immediate infusion of very talented 3d graphics engineers. It is something we really need to maintain this growth rate. We have extended over 100 offers to 3dfx engineers. We are confident that a large number of those offers will be accepted and look forward to adding this world class engineering talent to our the NVIDIA team. The increase in our engineering talent will allow us to bring products to market sooner, which will help us maintain this phenomenal growth rate.
nV News: Many 3dfx fans are concerned that NVIDIA will ignore not only the technology but also the potential new-hires and engineers from the 3dfx staff. Will there be any people from 3dfx joining NVIDIA, much like yourself?
Brian: Like I said before, we have extended offers to over 100 engineers at 3dfx and we welcome them to NVIDIA team.
Note: Gary Tarolli recently announced on the Voodoo5 newsgroup that he has accepted a position at NVIDIA...
nV News: Who will push NVIDIA to continue to innovate? Game developers, Microsoft, ATi,
Matrox, Sony, Intel?
Brian: The same people that have always pushed have, NVIDIA. NVIDIA does not keep a constant eye out and react to their competition. NVIDIA is very focused. It is not that we are arrogant or ignore our competition. We have an aggressive roadmap in place and we are focused on executing on it. We have developed that roadmap while working with of the key influencers in the industry. They key to our success is in what we do, not what the competition does. If we take care of NVIDIA, everything else will work itself out.
nV News: Is NVIDIA spreading themselves too thin by branching out into new markets?
Will the PC remain NVIDIA's bread-and-butter market?
Brian: No, we have a very carefully thought out plan. We are moving into markets that are a natural evolution for our company. Every new market we have entered, we have done it with the best solution available. Our workstation products are the fastest available. Our mobile product is 3X the performance of current solutions. The XBox will be the most awesome console system ever offered, and we are thrilled to be supplying a significant amount of the hardware technology for it. We plan to enter our targeted new markets with the same authority and with world class technology.
nV News: Do you see the possibility of a spin-off of different divisions at NVIDIA in the future? Split up graphics, chipset, and sound?
Brian: We are not commenting on future plans.
nV News: Do you believe another company could come out of nowhere to revolutionize 3d graphics and take away NVIDIA's speed crown?
Brian: That is always possible. But 3D graphics is a much more mature industry than it was when 3dfx and NVIDIA got started. The market is fiercely competitive. The barriers to entry are much higher now than they where five years ago. The complexities of the products are an order of magnitude above the products of the past. The cost of producing a GPU that can compete in today's market is staggering. It would be a very difficult task for a start up.
nV News: There is an effort to open source information so the Voodoo community can "support itself" after 3dfx folds formally. Will NVIDIA support the effort to get info to certain users that take it upon themselves to update drivers, etc?
Brian: That is really up to 3dfx, not NVIDIA. To my knowledge, 3dfx has already open sourced GLIDE, so they are free to program it if they wish.
nV News: What will come of the 3dfxgamers.com website, will it be converted?
Brian: I do not think that was part of the assets we purchased. I think our affiliate networks do a great job for us already.
nV News: You had been with 3dfx since the STB merger. Do you miss the old days?
Brian: When you do this for a living, you have to think with your head not your heart. You can not afford to get nostalgic. We had some great times at STB, and some good times at 3dfx. I am thankful for the experiences both companies gave me.
nV News: What's your favorite color?
nV News: Any comments...
Brian: I wish all my former co-workers from 3dfx nothing but the best.
This acquisition has been one of the controversial events in the computer hardware industry. While it may not have the impact of the justice department attacking Microsoft, it has caused quite a change for the PC gaming community.
Only time will tell if NVIDIA will continue to push and innovate. Part of NVIDIA's success revolves around the product cycle. They have promised to deliver new products for the card makers and OEM's to produce every six months. I remember hearing Jen-Hsun Huang once say that if NVIDIA fails to give their customers a new product in one cycle, NVIDIA could be out of business by the next cycle.
Is this what happened to 3dfx? Partly. The 3D Graphics industry is one that needs to make itself obsolete in order to stay in business. There are only so many computers sold and only so many hardcore gamers out there. If there is no need to upgrade, the new product sits on shelves, and the company's revenues suffer.
The OEMs like having "new and improved" in every sales cycle, and the graphics core is a large part of that. NVIDIA must continue to out-do themselves or someone else will.
Here are a few links if you care for more information on the acquisition:
nV News will make an effort to help support 3dfx users from here forward. Please feel free to use the nV News' Voodoo Lounge as a meeting place to discuss the acquisition and support of Voodoo products.
Finally, a big thanks to Brain Burke of NVIDIA for taking time to answer our questions.
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