3dfx
3dfx Interactive, Inc. was an American computer hardware company headquartered in San Jose, California, founded in 1994, that specialized in the manufacturing of 3D graphics processing units, and later, video cards. It was a pioneer in the field from the mid 1990s to 2000.
The company's original product was the Voodoo Graphics, an add-in card that implemented hardware acceleration of 3D graphics. The hardware accelerated only 3D rendering, relying on the PC's current video card for 2D support. Despite this limitation, the Voodoo Graphics product and its follow-up, Voodoo2, were popular. It became standard for 3D games to offer support for the company's Glide API.
Renewed interest in 3D gaming led to the success of the company's products and by the second half of the 1990s products combining a 2D output with 3D performance were appearing. This was accelerated by the introduction of Microsoft's Direct3D, which provided a single high-performance API that could be implemented on these cards, seriously eroding the value of Glide. While 3dfx continued to offer high-performance options, the value proposition was no longer compelling.
In the late 1990s 3dfx had an infringement lawsuit which combined with lower sales in the latter years led Nvidia to acquire 3dfx for their engineers, which they acquired around one hundred of. Most of the company's assets were acquired by Nvidia Corporation on December 15, 2000, mostly for intellectual property rights. The acquisition was accounted for as a purchase by Nvidia and was completed by the first quarter of their fiscal year of 2002. 3dfx ceased supporting their products on February 15, 2001, and filed for bankruptcy on October 15, 2002.
Company history
Early products
First chips
The company was founded on August 24, 1994, as 3D/fx, Inc. Ross Smith, Gary Tarolli and Scott Sellers, all former employees of Silicon Graphics Inc. They were soon joined by Gordie Campbell of TechFarm. 3dfx released its first product, the Voodoo Graphics 3D chip, to manufacturing on November 6, 1995. The chip is a VGA 3D accelerator that features rendering methods such as point-sampled texture mapping, Z- and double buffering, Gouraud shading, subpixel correction, alpha compositing, and anti-aliasing. Alongside the chip came 3dfx's Glide API, designed to take full advantage of the Voodoo Graphics' features. The company stated that Glide's creation was because it found that no existing APIs at the time could fully utilize the chip's capabilities. DirectX 3.0 was deemed to be lacking, and OpenGL was regarded as suitable only for CAD/CAM workstations. The first graphics card to use the chip was Orchid Technology's Righteous 3D, released on October 7, 1996. The company manufactured only the chips and some reference boards, and initially did not sell any product to consumers; rather, it acted as an OEM supplier for graphics card companies, which designed, manufactured, marketed, and sold their own graphics cards including the Voodoo chipset.3dfx gained initial fame in the arcade market. The first arcade machine that 3dfx Voodoo Graphics hardware was used in was a 1996 baseball game featuring a bat controller with motion sensing technology called ICE Home Run Derby. Later that year it was featured in more popular titles, such as Atari's San Francisco Rush and Wayne Gretzky's 3D Hockey. 3dfx also developed MiniGL after id Software's John Carmack released a 1997 version of Quake that used the OpenGL API. The MiniGL translated OpenGL commands into Glide, and gave 3dfx the advantage as the sole consumer chip company to deliver a functional graphics library driver until 1998.
Entry to the consumer market
Towards the end of 1995, the cost of DRAM dropped significantly and 3dfx was able to enter the consumer PC hardware market with aggressive pricing compared to the few previous 3D graphics solutions for computers. Prior to affordable 3D hardware, games such as Doom and Quake had compelled video game players to move from their 80386s to 80486s, and then to the Pentium.By the end of 1997, the Voodoo Graphics was by far the most widely adopted 3D accelerator among both consumers and software developers. The Voodoo's primary competition was from PowerVR and Rendition. PowerVR produced a similar 3D-only add-on card with capable 3D support, although it was not comparable to Voodoo Graphics in either image quality or performance. 3dfx did not see intense competition in the market from cards that offered the combination of 2D and 3D acceleration. While these cards, such as the Nvidia NV1, Matrox Mystique, S3 ViRGE, Vérité V1000, and ATI 3D Rage, offered inferior 3D acceleration in terms of image quality, performance, or both, their lower cost and simplicity often appealed to OEM system builders.
Dreamcast
In 1997, 3dfx was working with entertainment company Sega to develop a new video game console hardware platform. Sega solicited two competing designs: a unit code-named "Katana", developed in Japan using NEC and Imagination Technologies technology, and "Blackbelt", a system designed in the United States using 3dfx technology.However, on July 22, 1997, 3dfx announced that Sega was terminating the development contract. Sega chose to use NEC's PowerVR chipset for its game console, though it still planned to purchase the rights to 3dfx's technology in order to prevent competitors from acquiring it.
3dfx said Sega has still not given a reason as to why it terminated the contract or why it chose NEC's accelerator chipset over 3dfx's. According to Dale Ford, senior analyst at Dataquest, a market research firm based in San Jose, California, a number of factors could have influenced Sega's decision to move to NEC, including NEC's proven track record of supplying chipsets for the Nintendo 64 and the demonstrated ability to be able to handle a major influx of capacity if the company decided to ramp up production on a moment's notice.
"This is a highly competitive market with price wars happening all the time and it would appear that after evaluating a number of choices—and the ramifications each choice brings—Sega went with a decision that it thought was best for the company's longevity," said Mr. Ford.
"Sega has to make a significant move to stay competitive and they need to make it soon. Now whether this move is to roll out another home console platform or move strictly to the PC gaming space is unknown."
Sega quickly quashed 3dfx's "Blackbelt" and used the NEC-based "Katana" as the model for the product that would be marketed and sold as the Dreamcast. 3dfx sued Sega for breach of contract, accusing Sega of starting the deal in bad faith in order to take 3dfx technology. The case was settled out of court.
New chips, competition, and decline
Development of Rampage
In early 1998, 3dfx embarked on a new development project. The Rampage development project was new technology for use in a new graphics card that would take approximately two years to develop, and would supposedly be several years ahead of the competition once it debuted. The company hired hardware and software teams in Austin, Texas, to develop 2D and 3D Windows device drivers for Rampage in the summer of 1998. The hardware team in Austin initially focused on Rampage, but then worked on transform and lighting engines and on MPEG decoder technology.Acquisition of STB
3dfx announced in January 1999 that their Banshee cards had sold about one million units. While Nvidia had yet to launch a product in the add-in board market that sold as well as 3dfx's Voodoo line, the company was gaining steady ground in the OEM market. The Nvidia RIVA TNT was a similar, highly integrated product that had two major advantages in greater 3D speed and 32-bit 3D color support. 3dfx, by contrast, had very limited OEM sales, as the Banshee was adopted only in small numbers by OEMs.3dfx executed a major strategy change just prior to the launch of Voodoo3 by purchasing STB Systems for US$141 million on December 14, 1998. STB Systems was one of the larger graphics card manufacturers at the time; the intent was for 3dfx to start manufacturing, marketing, and selling its own graphics cards, rather than functioning only as an OEM supplier. Purchase of STB was intended to give 3dfx access to that company's considerable OEM resources and sales channels, but the intended benefits of the acquisition never materialized. The two corporations were vastly different entities, with different cultures and structures, and they never integrated smoothly.
STB prior to the 3dfx acquisition also approached Nvidia as a potential partner to acquire the company. At the time, STB was Nvidia's largest customer and was only minimally engaged with 3dfx. 3dfx management mistakenly believed that acquiring STB would ensure OEM design wins with their products and that product limitations would be overcome with STB's knowledge in supporting the OEM sales/design win cycles. Nvidia decided not to acquire STB and to continue to support many brands of graphics board manufacturers. After STB was acquired by 3dfx, Nvidia focused on being a virtual graphics card manufacturer for the OEMs and strengthened its position in selling finished reference designs ready for market to the OEMs. STB's manufacturing facility in Juarez, Mexico was not able to compete from either a cost or quality point of view when compared to the burgeoning original design manufacturers and Contract electronic manufacturers that were delivering solutions in Asia for Nvidia. Prior to the STB merger finalizing, some of 3dfx's OEMs warned the company that any product from Juarez will not be deemed fit to ship with their systems, however 3dfx management believed these problems could be addressed over time. Those customers generally became Nvidia customers and no longer chose to ship 3dfx products.
The acquisition of STB was one of the main contributors to 3dfx's downfall; the Voodoo 3 became the first 3dfx card to be developed in-house rather than by third-party manufacturers, which were a significant source of revenue for the company. These third-party manufacturers turned into competitors and began sourcing graphics chips from Nvidia. This also further alienated 3dfx's remaining OEM customers, as they had a single source for 3dfx products and could not choose an OEM to provide cost flexibility. With the purchase of STB, 3dfx created two cards targeting the low-end market, the Velocity 100, which has 8 MB of SDRAM, and the Velocity 200, which has 16 MB of SGRAM. The cards both used a chipset based on the Voodoo3 2000, and it was claimed that they were "underclocked". However, it was revealed by testing that the Velocity 100 chipset has the same clock speed as a typical Voodoo3 2000—at 143 MHz—and that, while one of its two TMUs is disabled in OpenGL and Glide applications for memory management, it can be re-enabled to increase those applications' performance, and AnandTech found no side effects of enabling the component.
As 3dfx focused more on the retail graphics card space, further inroads into the OEM space were limited. A significant requirement of the OEM business was the ability to consistently produce new products on the six-month product refresh cycle the computer manufacturers required; 3dfx did not have the methodology nor the mindset to focus on this business model. In the end, 3dfx opted to be a retail distribution company manufacturing their own branded products.