BFG sending out warranty denial letters, bankrupt?

[Kaotik]

http://www.hardwarecanucks.com/news/video/bfg-tech-sending-rma-denial-letters-winding-business/

People who have sent their cards recently for RMA, have received this reply from BFG:

BFG Technologies Inc. is in the process of winding down and liquidating its business. Unfortunately, our major supplier would not support our business. As a result, we are returning your graphics card without being able to repair it. We apologize for the inconvenience.

So much for their 10 years warranty in EU, lifetime in US

 

[Squilliam]

Ouch! I guess Charlie was right about the Nvidia partners struggling. I wonder who else might go since BFG was one of the bigger ones, right?

 

[Alexko]

The wording here is curious. BFG says NVIDIA "would not" support them. I would have expected "could not". Do you think this is deliberate?

 

[digitalwanderer]

Ouch, just ouch and sad.

 

[BRiT]

Here's what I think they mean by "Nvidia would not support them", taken from http://hardwareaware.com/news/bfg-tech-liquidating/

BFG’s problems were largely graphics card related, but not related to GTX200. Sales and profit margins on that card were quite good actually. The biggest problem was GTX400 (Fermi) allocation. And the only reason they continued to sell power supplies after they got out of the graphics card business was because there were power supplies to sell. But they couldn’t sell them as quickly as they had been used to because once Best Buy caught wind of BFG not being able to supply graphics cards, they dropped selling their power supply product line as well. If there’s any question as to how much of a dent that put into BFG’s business, let’s put it this way: Best Buy sold TEN TIMES more BFG power supplies than Newegg. Of course, they returned three times as much, but the benefits of the large volume could not be denied.

So Fermi has indeed killed companies now.

Nvidia controlled who were given allocation, and they neglected BFG, hence the words 'would not' instead of 'could not'. I suppose one could argue that Nvidia had no choice in the matter so they 'could not', but then you're admitting that Charlie was right about Fermi being an unsustainable product. The choice is yours.

 

[Davros]

is this all cards or just the fermi line ?

 

[digitalwanderer]

This is there PSUs we're talking about, the whole company is going Dav.

 

[Xenus]

Something doesn't add up. You don't go bankrupt from being denied a few cards especially since you aren't paying for them if you aren't getting them. Maybe something else hit them financially and they were counting on fermi to keep them afloat but this doesn't seem like we're getting the whole truth.

 

[Bouncing Zabaglione Bros.]

If you've tied yourself to Nvidia's apron strings, and then they can't give you any product to sell for more than half a year, you go under. Being an exclusive partner is all well and good when you're getting special deals and preferential allocation, but if you've got nothing to sell, you will die.

Sounds like BFG had all the negatives of being an exclusive partner, and none of the positives, all because Nvidia couldn't supply stock in the kind of quantities needed to keep a business afloat.

There's been lots of stories and rumours of Nvidia's ruthlessness when it comes to screwing over it's partners and suppliers, so I'm not surprised if they simply let BFG die rather then trying to help an exclusive partner for the future benefit of both companies.

 

[Xenus]

True but it sounds like they were still selling GTX200 series and making good margins there. So while I see why they wouldn't be happy with Nvidia so much so they might try to strike an exclusive AMD deal but I can't see why they would go bankrupt that quickly if this is fact is what happened unless they where razor thin on making a profit or not when getting all the cards and didn't have much in the way of reserves but that's really bad way to run a business cause one bad quarter and you're bankrupt.

 

[Bouncing Zabaglione Bros.]

True but it sounds like they were still selling GTX200 series and making good margins there. So while I see why they wouldn't be happy with Nvidia so much so they might try to strike an exclusive AMD deal but I can't see why they would go bankrupt that quickly if this is fact is what happened unless they where razor thin on making a profit or not when getting all the cards and didn't have much in the way of reserves but that's really bad way to run a business cause one bad quarter and you're bankrupt.

There were a lot of rumours that GTX200 series were not making much money, and Nvidia were taking what little cash there was from the partners, rather than taking such a bad margin for themselves.

AMD have said a few times in the last couple of years that they have no need for more partners, so going over to the ATI side may not have been an option.

I had heard talk the BFG had special treatment from Nvidia, and this kept them going in the bad times, but I guess now it's down to the wire and Nvidia is executing late, poor margins on GTX2xx for the partners even before that, producing an expensive Fermi replacement that has even thinner margins that doesn't seem to be selling that well (hence dropping the 470 down to a 460). It's not a good time to be a Nvidia partner if that's your main source of income.

If Best Buy gave BFG a lot of their cashflow, and then decided to cut BFG loose because of a fear of losses or a company that can't honour it's customer's warranties, that would have been the final nail in the coffin.

 

[Alexko]

The GTX 200s were EOLed a while ago. So as good as margins may have been for those cards (and toward the end of their lives, they can't have been very good) that's not very relevant.

This year, NVIDIA partners have been selling mostly DX10.1 stuff, maybe some 55nm G92s, and Fermi.

 

[Silent_Buddha]

Ouch, but it had to be expected that at some point if you have a single provider of your major product line that if they had trouble you were going to be in lots of trouble if you didn't have a large cash reserve.

Any company having just one IHV as a sole supplier of their main product line is just living on borrowed time, IMO. That's discounting companies that are subsidiaries of a parent company with a subsidiary selling other IHV products.

Regards,
SB

 

[digitalwanderer]

That's discounting companies that are subsidiaries of a parent company with a subsidiary selling other IHV products.

You mean like a Gigabyte or a Zotac?

 

[Xenus]

This seems to be a textbook example of how not to run a company. Having one major supplier, one major retailer that sells most of your products, razor thin margins and no cash reserve is asking for trouble.

 

[swaaye]

I'm almost surprised that they weren't one of Best Buy's brands.

 

[digitalwanderer]

PC Perspective has the skinny, looks like BFG did a desperation move trying to make Radeons and ATi busted 'em at it. (Won't be able to write that for long. )

Behold that which is the first and last of the BFG Radeon 5000 series:

A Chinese reader who is closely associated with a manufacturing company in China sent a couple interesting pictures as well as a short description of the business agreement that BFG had pursued with this company. Apparently this manufacturer would procure the parts, assemble the cards, package and ship the products under BFG’s name. BFG would have little to do with the business other than producing the specifications of the cards and marketing the final products. Several models of the cards were designed, components were bought, and cards started to be manufactured.

A goodly amount of AMD graphics chips were procured, and this of course raised the interest of AMD. When AMD inquired about who these chips were for, the manufacturer told them that it was for BFG. AMD responded that BFG was not an authorized partner, and they would not be allowed to sell AMD based graphics boards. This of course panicked the manufacturer, as they made a sizeable purchase up front to procure the necessary components for the video cards.

..............

I don’t know the reasons why AMD would not allow BFG to market and sell these cards, but all indications point to BFG attempting to do an end-around when it could not get partner status with AMD. This was a Hail Mary if there ever was one, and it appeared to be about 5 yards short in the end.

 

[Davros]

I dont get that, its a product sure amd can refuse to supply but if they have them they can sell them, if I was a car dealer and ford told me I cant sell ford cars i'd tell them to f*** off

 

[Reznor007]

I dont get that, its a product sure amd can refuse to supply but if they have them they can sell them, if I was a car dealer and ford told me I cant sell ford cars i'd tell them to f*** off

They would have to include a driver disc in the package, and that would mean selling AMD software without their permission.

And assumedly if it's an AMD reference board design, thats copyrighted as well.

That's the way I take it anyway.

 

[AlphaWolf]

I dont get that, its a product sure amd can refuse to supply but if they have them they can sell them, if I was a car dealer and ford told me I cant sell ford cars i'd tell them to f*** off

You think Ford wouldn't tell you that? AMD (and Ford) has a responsibility to protect their existing partners, too many partners means they all become a bit less viable as they have more competition in a limited market. It might be nice for the consumer but it makes little sense to have 100 partners each selling 1000 or less units. I'm sure AMD had a nice chat with whichever partner supplied BFG the chips.

I'm not certain AMD could stop them from selling the products they had but they can mostly certainly stop them from branding them as anything associated with AMD.