Relationship between MS/Nvidia

[BRiT]

Was there not a court case regarding pricing of NV chips in the XBOX that MS lost?

Yeah, MS decided since they were special they should pay Nvidia less than they agreed upon Unsurprisingly they lost.

Yeah, Nvidia decided since they were special they should be paid the same amount for less than the agreed upon specced-hardware? Surprisingly they won.

They missed the target specs by quite a bit too...

 

[Sxotty]

Do you have any links Brit? I would appreciate it if you could provide some as I would be interested to read about it.

 

[Tahir2]

Well I do know that the GPU was originally planned to be at least 250MHz but in its final incarnation it was 233MHz.

I think MS' main point was that as time passes prices should fall and whilst MS was able to renegotiate pricing on other components NVIDIA would not budge.

 

[Sxotty]

Well nvidia was selling them at a loss at first, unless MS had already agreed to proift sharing from the liscencing fees from games it seems a tad unrealistic to expect them to lower their prices and continue selling them at loss. I noticed the new ati deal specifically said that ATi would be getting money from MS as game were sold for the system, not just for the chip.

 

[Inane_Dork]

Well nvidia was selling them at a loss at first...

I bet that was completely offset with the huge cash infusion MS put into nVidia at the start of the contract, though. And since then, nVidia has been making tons of money off the contract. nVidia is not technically wrong to force MS to uphold the contract, but you must realize it's the difference between them making scads of money and making uberscads of money, not the difference between profit and loss.

 

[Geo]

Well nvidia was selling them at a loss at first...

I bet that was completely offset with the huge cash infusion MS put into nVidia at the start of the contract, though. And since then, nVidia has been making tons of money off the contract. nVidia is not technically wrong to force MS to uphold the contract, but you must realize it's the difference between them making scads of money and making uberscads of money, not the difference between profit and loss.

Pigs get fat and hogs get slaughtered. Quite possibly lost NV xbox2 --but then they found Sony, didn't they? I bet Sony did a better deal in the "protecting themselves" class --but then MS was trying to break into that market as an "instant big boy".

 

[Sxotty]

I wasn't suggesting they were not going to make money, but it seems for a company as rich as MS to be too clueless to realize the cost of production will decrease is kind of silly. I mean what was nvidia's lawyers just too smart for MS's lawyers when they drew up the contract? Maybe MS forgot to read the small print

 

[The Postman]

Or maybe they didn't read it at all?

 

[Inane_Dork]

I wasn't suggesting they were not going to make money, but it seems for a company as rich as MS to be too clueless to realize the cost of production will decrease is kind of silly.

Chalk it up to inexperience. They were behind, got rushed and opted to use their money mountain to make things work.

Sony might have similar problems if they tried to make an OS or office suite, despite their capital.

 

[WaltC]

That part at least feels very unlikely, as every single rumor we've had regarding the XBox design teams compared to the NV30 ones, is that way *too much* resources went into the XBox. Considering that incoherency, the rest seems unreliable.

Not really, imo, as this is merely another way of saying that from the start nVidia had simply "bitten off more than it could chew"...and was constantly in scramble mode or CYA mode just to evade the consequences of its incompetence at various levels for as long as possible. Blaming xbox for nVidia's nV3x problem is essentially ridiculous on its face as even at best it means nVidia seriously miscalculated a number of things and committed to a number of mistaken trajectories.

As I do not recall MS placing a gun to nVidia's head when nVidia signed on to the xbox initially (quite the opposite IIRC as nV capitalized on the contract from every conceivable PR vantage point at the time), then even at best it merely indicates nV simply reached the point of its own incompetence with accordingly predictible results.

Frankly, I cannot see MS dropping nVidia as xbox contractor except for the reason that MS had no confidence in nVidia's ability to actually deliver what it promised. Losing the contract was as plain a vote of "no confidence" as any company will likely receive from MS, imo. I think the historical record since '02 is filled with enough facts to buttress these accounts--certainly, nothing historically that I can think of remotely refutes them...

Which brings me to the brink of a philosophical question:

"Just how much smoke to do people have to see before they will conclude there's a fire burning somewhere?"... Obviously, the answer varies widely among individuals.

 

[Tahir2]

WaltC did MS drop NVIDIA this time around or did NVIDIA drop MS?

 

[digitalwanderer]

I thought M$ dropped nVidia, I didn't know that was in question.

 

[Tahir2]

NVIDIA and Jsen Jsun Huang's statements made it sound like they had too much on their plate so were not bothered about MS' next console.

Spin...

 

[Bouncing Zabaglione Bros.]

NVIDIA and Jsen Jsun Huang's statements made it sound like they had too much on their plate so were not bothered about MS' next console.

Spin...

Yes - a statement issued after ATI won the contract to keep the investors happy. Is there any doubt that Nvidia tendered for the Xbox 2 contract?

 

[Smurfie]

When did Nvidia start their relationship with Sony? This will answer the question to whether Nvidia dropped MS or MS dropped Nvidia.

In case you don't know, Nvidia working with Sony and MS represents a massive corporate conflict of interest. Not that it matters here, since everyone believes Nvidia is evil anyway. 8)

 

[kemosabe]

In case you don't know, Nvidia working with Sony and MS represents a massive corporate conflict of interest. Not that it matters here, since everyone believes Nvidia is evil anyway. 8)

There's only a conflict of interest if the involved parties consider there to be one. ATI is working with both Nintendo and MSFT and nobody seems to be in a frenzy over it.

NVDA says it's been "working with Sony" for two years, although they don't quite elaborate on what they've been working on. They probably only agreed on NVDA providing GPU hardware for PS3 after MS and ATI announced their relationship, but Huang will never admit to that.

 

[vb]

In case you don't know, Nvidia working with Sony and MS represents a massive corporate conflict of interest. Not that it matters here, since everyone believes Nvidia is evil anyway. 8)

If that's a "massive corporate conflict of interest", how would you define IBM's position?

 

[Dave Baumann]

Jen Hsun had stated to his employee's (some of them at least) his intent on getting all 3 consoles.

 

[Smurfie]

Yes, I remember Jen Hsun ever mentioning he would want to get all 3 consoles.

But the conflict of interest I stated here, isn't the conflict of interest within Nvidia. It's the conflict of interest perceived by Sony and MS. Can MS and Sony live with Nvidia supplying both?

 

[digitalwanderer]

Jen Hsun had stated to his employee's (some of them at least) his intent on getting all 3 consoles.

That makes sense, wouldn't you want to see what the competition is up to and how yours racks up?