Former graphics card maker 3dfx Interactive Inc. today announced the sale of “substantially all of its assets” to a wholly owned subsidiary of former rival
Nvidia Corp. Nvidia US Investment Co. paid 3dfx US$55 million in cash.
3dfx and Nvidia had been competitors in the hotly contested market for consumer graphics cards — often squaring off in court against one another, claiming patent infringements and other transgressions. Both companies were heavily entrenched in the PC graphics card market, but last year 3dfx introduced several retail graphics cards for Mac users, too. 3dfx made no secret of its interest in securing a build-to-order contract with Apple, to give Power Mac G4 owners the choice of their cards over rival ATI, which has maintained a dominant position in the Mac market. Alas, no deal between Apple and 3dfx ever came forth.
After several bad quarters, 3dfx announced in December that it was in serious trouble. Shortly thereafter, the company struck a deal to sell its assets to the Nvidia subsidiary. 3dfx agreed to sell patents, patent applications, trademarks, brand names and other assets. Although it remains to be seen if Nvidia will actively utilize those brands and assets in future products, the big win for Nvidia was the addition of about one hundred hardware and software engineers displaced by 3dfx’s closure.
The sale of 3dfx’s assets to Nvidia means that Nvidia has control of technology and brands associated with 3dfx, but none of 3dfx’s liabilities, such as its debts to creditors, the company’s manufacturing plant in Juarez, Mexico, any outstanding inventories of 3dfx products, or support for existing cards — that still lies squarely on the shoulders of now-defunct 3dfx. Mac users of 3dfx cards have been bitterly disappointed with the recent events, which have left them essentially orphaned with video cards that are not supported on Mac OS X.
Nvidia has displaced ATI as Apple’s provider of high-performance graphics hardware on the Power Mac G4 line. In January it was revealed that Apple and Nvidia had been working closely together to bring Nvidia’s GeForce2 MX chip to the Mac, which is now available on an Apple-made card that’s standard issue on several Power Mac G4 models. Apple-manufactured cards based on Nvidia’s GeForce3 chip are also being offered as an option to Power Mac G4 buyers — Apple is hoping to ship those cards next month.
3dfx says that it may get a million shares of Nvidia stock, or up to $25 million in cash and a lesser number of shares, provided it’s able to satisfy “certain additional conditions provided for” in the agreement. “3dfx is not yet in a position to announce if, or when, it will be able to satisfy these additional conditions,” the company admitted.