ATI Wins Xbox Deal

[ViRGE]

Originally posted by: digitalsm

Originally posted by: Pocatello
It might sound good for ATI in the short term. Nvidia spent a lot of time designing the graphics chip for the XBOX, and get very little out of the deal. The deal brought some profit but also let ATI surpassed in the release of the Radeon 9700.

20% of Nvidias profits come from the Xbox GPU.

20% of profits, I thought it was 15-20% of revenue?

PS Cost isn't nearly as much of an issue as the unsold inventory

 

[TheeeChosenOne]

I recently read an article about the Nvidia CEO.

He basically said he might not go forth with future next-gen XBOX chip designs, since it cost his company valuable design resources in the bread-and-butter PC market. According to him, this led to Nvidia taking a back seat to ATI in the PC segment.

When you add all the ilegal ssues with Microsoft over the Xbox, well that didn't bode well for future business obviously.

The CEO marked his intention to make the PC segment his #1 priority. Seeing the design talent at Nvidia, I have little doubt they'll have trouble competing with ATI.

Any CEO worth his salt, though, would try to keep juggling both businesses in the air. Losing XBOX is a MAJOR BLUNDER. A MAJOR BLUNDER! The stock price loss is refelctive of this loss of business.

When you take into account that XBOX is hitting its stride and clearly the #2 console in the market, the business loss becomes that more marked.

Microsoft never loses. They are VERY PERSISTENT. I would not be surprised seeing their next gen console take the market lead away from PS2. They've already purchased many of the best game manufacturers. When you have the games, you get the audience. And they have the CASH to continue in this manner.

 

[ElFenix]

Originally posted by: ViRGE
This may not be a very good thing for ATI. MS is a very difficult and cruel partner/master, Nvidia learned this first hand when they had piles of Xbox chips they couldn't sell, and were about to have to take a very large loss on the ordeal, only to be able to save their hides in arbitration. Console chips have been some of the lowest margin products out there, so if MS tries something similar on ATI, they could very well drive them in to the red.

i'm guessing ati saw what happened to nvidia and got that sort of thing in the contract

 

[TheeeChosenOne]

Originally posted by: Kenazo
ATI's STock has been amazing over the last few months. In march it was hovering around $6, now it's up around $17

Don't be too quick. The volume of shares floating in the market is small. That means the stock can act in a voltaile manner VERY, VERY fast.

One mutal fund manager dumping the stock can cause a huge hit, which would in turn lead to a panic sell-off by the rest of the pofit-seeking market.

Be WARY of companies with small floats. Have your broker sell if the stock drops below a certain set price.

I think ATI's run-up is too high, too fast......I wouldn't buy until it drops some. Let the stcok cool off some if you're intent on buying.

 

[Slap]

Brian Alger, analyst with Pacific Growth Equities, said Nvidia's Xbox chips were being sold to Microsoft at a margin lower than its other products. He estimated Nvidia's sales to Microsoft at $445 million in the previous fiscal year, $292 million this year and $200 million in 2005, or between 10 and 25 percent of Nvidia's total sales base.

So even though total sales will be down, margins will be up and that will probably offset the loss.

 

[StageLeft]

nvidia and ati are both good I suppose and xbox2 will be nice. At least they didn't entertain ideas of using a crappy matrox chip aHAHHAA

 

[ViRGE]

Originally posted by: TheeeChosenOne
I recently read an article about the Nvidia CEO.

He basically said he might not go forth with future next-gen XBOX chip designs, since it cost his company valuable design resources in the bread-and-butter PC market. According to him, this led to Nvidia taking a back seat to ATI in the PC segment.

When you add all the ilegal ssues with Microsoft over the Xbox, well that didn't bode well for future business obviously.

The CEO marked his intention to make the PC segment his #1 priority. Seeing the design talent at Nvidia, I have little doubt they'll have trouble competing with ATI.

Any CEO worth his salt, though, would try to keep juggling both businesses in the air. Losing XBOX is a MAJOR BLUNDER. A MAJOR BLUNDER! The stock price loss is refelctive of this loss of business.

When you take into account that XBOX is hitting its stride and clearly the #2 console in the market, the business loss becomes that more marked.

Microsoft never loses. They are VERY PERSISTENT. I would not be surprised seeing their next gen console take the market lead away from PS2. They've already purchased many of the best game manufacturers. When you have the games, you get the audience. And they have the CASH to continue in this manner.

Nvidia isn't completely "lost" yet, they'll be making chips for at least a couple more years, the expected life-span of the current Xbox.

PS ElFenix, word is that there are royalty agreements to protect ATI, but you can be sure MS is also protected from ATI, should something unfortunate happen

 

[TheeeChosenOne]

IMHO, money talks. MONEY ALWAYS talks.

You have Microsoft. Some of the smartest people on the planet work there (management & design). They LEARN from their mistakes. They have LOADS of cash.

For as much as we all like Nintendo. They just simply can't comepete with such a behemoth.

Whereas Ninetendo would struggle to acquire a game designer, to MS it's nothing more than an after-thought.

MS is acquiring and acquiring any game designer that's worth it's salt. Management said this is their long-term STRATEGY.

In time, as with all things MS does, they'll have some amazing games as they own the talent. Add the marketing mu$$$cle and it truly becomes a David vs. Goliath scenario.

Only Sony has the mu$$cle to compete against MS.

Nintendo will most likely become a software designer and continue with the Gameboy project....though, that is in dire straits when Sony and MS enter into the fray.

There are definitely tough times ahead for Nintendo. Like it or not.

It will only be MS and Sony in the future my friends.

 

[wyvrn]

I can't say I disagree with this, though competition is always a good thing. I wouldn't mind if Nintendo continued to sell consoles only so one company doesn't begin to dictate the decision-making for the industry.

Originally posted by: TheeeChosenOne
IMHO, money talks. MONEY ALWAYS talks.

You have Microsoft. Some of the smartest people on the planet work there (management & design). They LEARN from their mistakes. They have LOADS of cash.

For as much as we all like Nintendo. They just simply can't comepete with such a behemoth.

Whereas Ninetendo would struggle to acquire a game designer, to MS it's nothing more than an after-thought.

MS is acquiring and acquiring any game designer that's worth it's salt. Management said this is their long-term STRATEGY.

In time, as with all things MS does, they'll have some amazing games as they own the talent. Add the marketing mu$$$cle and it truly becomes a David vs. Goliath scenario.

Only Sony has the mu$$cle to compete against MS.

Nintendo will most likely become a software designer and continue with the Gameboy project....though, that is in dire straits when Sony and MS enter into the fray.

There are definitely tough times ahead for Nintendo. Like it or not.

It will only be MS and Sony in the future my friends.