Go Back  DVD Talk Forum > Entertainment Discussions > Video Game Talk
Reload this Page >

Microsoft brings Nvidia to arbitration

Video Game Talk The Place to talk about and trade Video & PC Games

Microsoft brings Nvidia to arbitration

Old 04-29-02, 10:44 PM
  #1  
DVD Talk Legend
Thread Starter
 
gcribbs's Avatar
 
Join Date: Aug 1999
Location: Sacramento,Ca,USA member #2634
Posts: 11,971
Received 0 Likes on 0 Posts
Microsoft brings Nvidia to arbitration

http://biz.yahoo.com/rt/020429/tech_...crosoft_3.html

I guess they are fighting over prices. Microsoft want them to sell the chips at a loss and Nvidia wants to make a profit.


I think this will hurt Microsoft for an XBox 2. pissing off the graphics chipmaker is not the way to go. Unless they have already given up on that idea and are now just trying to cut losses.
Old 04-29-02, 10:53 PM
  #2  
Mod Emeritus
 
Gallant Pig's Avatar
 
Join Date: Aug 1999
Posts: 15,325
Likes: 0
Received 0 Likes on 0 Posts
Re: Microsoft brings Nvidia to arbitration

Originally posted by gcribbs
http://biz.yahoo.com/rt/020429/tech_...crosoft_3.html

I guess they are fighting over prices. Microsoft want them to sell the chips at a loss and Nvidia wants to make a profit.


I think this will hurt Microsoft for an XBox 2. pissing off the graphics chipmaker is not the way to go. Unless they have already given up on that idea and are now just trying to cut losses.
"We're delighted we have a wonderful relationship with Microsoft and working on many fronts together, and the arbitration is just a step in an overall process in resolving this thing," Nvidia's Chief Executive Jen-Hsun Huang said.
Oh yeah they are really pissing them off!

And it's a good thing that Nvidia is the only graphics chipmaker.
Old 04-29-02, 10:59 PM
  #3  
DVD Talk Legend
Thread Starter
 
gcribbs's Avatar
 
Join Date: Aug 1999
Location: Sacramento,Ca,USA member #2634
Posts: 11,971
Received 0 Likes on 0 Posts
Re: Re: Microsoft brings Nvidia to arbitration

Originally posted by Gallant Pig




Oh yeah they are really pissing them off!

And it's a good thing that Nvidia is the only graphics chipmaker.
when you are forcing them into arbitration to reduce the price below cost- trust me they are not happy with this. they of course will put a positive spin on it. However if you think this type of action is an indication of a good working relationship maybe you could talk to my Ex


Nvidia or ATI is really it right now. I do not think Ati is going to sell many consoles since they are not considered the best.

losing Nvidia for an XBox 2 would be a huge blow to microsoft. I am surprised this was not done behind the scenes to avoid arbitration. I guess they tried and Nvidia said no way to losing money on the XBox for Microsoft.
Old 04-29-02, 11:01 PM
  #4  
Mod Emeritus
 
Gallant Pig's Avatar
 
Join Date: Aug 1999
Posts: 15,325
Likes: 0
Received 0 Likes on 0 Posts
ATI seems to be doing pretty well selling the GCN.
Old 04-29-02, 11:03 PM
  #5  
DVD Talk Platinum Edition
 
Join Date: Feb 2001
Posts: 3,189
Likes: 0
Received 0 Likes on 0 Posts
Re: Re: Re: Microsoft brings Nvidia to arbitration

Originally posted by gcribbs


Nvidia or ATI is really it right now. I do not think Ati is going to sell many consoles since they are not considered the best.

Graphics on the gamecube seem be doing pretty good with Gamespot calling RE the best looking video game ever...

Not to mention GC is selling better then xbox...

someone better inform ATI of their place. I'm just messing with you. I think ATI does a fine job, and on PC's their video cards for editing and such rock.
Old 04-29-02, 11:22 PM
  #6  
DVD Talk Legend
Thread Starter
 
gcribbs's Avatar
 
Join Date: Aug 1999
Location: Sacramento,Ca,USA member #2634
Posts: 11,971
Received 0 Likes on 0 Posts
Re: Re: Re: Re: Microsoft brings Nvidia to arbitration

Originally posted by jeffdsmith


Graphics on the gamecube seem be doing pretty good with Gamespot calling RE the best looking video game ever...

Not to mention GC is selling better then xbox...

someone better inform ATI of their place. I'm just messing with you. I think ATI does a fine job, and on PC's their video cards for editing and such rock.
yeah but ATI is making chips for the GC so I bet they can not make chips for the XBox so who does that leave?

and after trying to force your last graphics chip maker to sell for a loss. do you think ATI is anxious to get into bed with Microsoft.

really this is a mistake. I hope they smarten up and settle this one before arbitration.

I also do believe that Nvidia is far and away a better graphics card maker than ATI. I am happy ATI is around to keep Nvidia honest with prices because if they get out of the consumer market we will be bent over by Nvidia.

I also do not think that the ATI name is selling the GC. The Nintendo name is selling it. The Nvidia name is far more valuable to the XBox the the ATI name is to the GC.

Last edited by gcribbs; 04-29-02 at 11:24 PM.
Old 04-29-02, 11:25 PM
  #7  
Mod Emeritus
 
Gallant Pig's Avatar
 
Join Date: Aug 1999
Posts: 15,325
Likes: 0
Received 0 Likes on 0 Posts
This is actually old news, check out Belboz's thread.

Also, nVidia recently filed an 8-K report with the SEC (basically an official report of current news that materially affects investors) in regards to MS having taken their dispute over the XBox contract into arbitration. Essentially, MS is trying to force a cut in their cost for the nVidia supplied parts in the XBox. If they're successful, it would go a long way towards cutting their production cost for the XBox.
Gribbs, don't you want cheaper Xbox prices? MS is doing what's best for the Xbox in trying to lower the price. I don't see anything wrong with that.
Old 04-29-02, 11:30 PM
  #8  
DVD Talk Legend
Thread Starter
 
gcribbs's Avatar
 
Join Date: Aug 1999
Location: Sacramento,Ca,USA member #2634
Posts: 11,971
Received 0 Likes on 0 Posts
Originally posted by Gallant Pig
This is actually old news, check out Belboz's thread.



Gribbs, don't you want cheaper Xbox prices? MS is doing what's best for the Xbox in trying to lower the price. I don't see anything wrong with that.
No I do like that. I just think it will hurt them to force Nvidia to sell below costs. also to force your chip maker into arbitration is a bad thing for the relationship.

I would rather see them take a hit in there own earnings which are way above Nvidia's with the hope to increase sales and get the money back thru licensing fees thru games.

If the price goes down and more games are sold Nvidia does not win and make more money. Microsoft does at the expense of Nvidia. This is why Microsoft is not well liked in the computer industry. they are willing to do anything to make a profit including forcing partners to lose money.
Old 04-29-02, 11:33 PM
  #9  
Mod Emeritus
 
Gallant Pig's Avatar
 
Join Date: Aug 1999
Posts: 15,325
Likes: 0
Received 0 Likes on 0 Posts
I'd like to see Belboz explain this a little more.
Old 04-30-02, 12:05 AM
  #10  
DVD Talk Gold Edition
 
Join Date: Feb 2000
Location: Space Junk Galaxy
Posts: 2,471
Likes: 0
Received 0 Likes on 0 Posts
Here is the link to Nvidia's SEC filing:

For more than seven years, NVIDIA has been a supplier of graphics processors and other technology for personal computer and other platforms based on technology from Microsoft Corporation. On March 5, 2000, we entered into an agreement with Microsoft in which we agreed, under certain terms and conditions, to develop and sell processors for use in the Xbox video game console. On February 14, 2001, we announced that our Xbox GPU and Xbox media communications processor were released to Taiwan Semiconductor Manufacturing Company, or TSMC, for prototype fabrication. These processors are fabricated on a .15-micron process technology and commercial shipment began in July 2001. In April 2000, Microsoft paid us $200 million under the agreement as an advance against processor purchases. This advance has been fully utilized due to purchases made by Microsoft through the quarter ended April 28, 2002 and Microsoft is currently paying in advance for processor chipsets sold to it.

We have been engaged with Microsoft in discussions related to pricing and volumes of the Xbox chipset. These discussions and our agreement contemplated use of a third party to resolve matters and on April 23, 2002 Microsoft submitted the matter to binding arbitration. Microsoft has requested that the arbitration panel require that we supply chipsets in whatever quantities are ordered by Microsoft. Microsoft has also asked for damages for alleged violations of the agreement and requested that the arbitration panel reduce chipset prices paid by Microsoft. We do not believe we have a requirements obligation to Microsoft and we plan to submit our position to the arbitration panel shortly. For sales of the Xbox media communication processor, we have deferred revenue in an amount equal to the difference between the price being paid by Microsoft and the price Microsoft claims it should be paying. This amount was approximately $13 million as of January 27, 2002, the end of our fiscal 2002. We expect that we will continue to defer such amount on future sales of this processor until resolution of the matter. The arbitration will be conducted in New York by a panel under the rules of the American Arbitration Association.

There can be no assurance that we will prevail in the arbitration or continue to supply graphics and other processors for the Xbox. If we do not prevail, we may (i) be compelled to deliver Xbox processors at reduced pricing, resulting in reduced gross margins, or a loss, on such processors; (ii) be required to reduce production and delivery of other products in order to satisfy obligations to Microsoft; (iii) be required to pay significant damages to Microsoft; or (iv) be subject to other remedies that could have a material adverse impact on our business. Even if we do prevail, there can be no assurance that our business will not be materially harmed.

Last edited by CreatureX; 04-30-02 at 12:13 AM.
Old 04-30-02, 02:09 AM
  #11  
DVD Talk Gold Edition
 
Join Date: Feb 1999
Location: HB, CA
Posts: 2,600
Likes: 0
Received 0 Likes on 0 Posts
Well, all that's known for a fact at this point is that MS initiated a dispute with nVidia over the price of the chipset used in the XBox. Instead of hashing this out in open courts however, both companies have agreed to seek a resolution through arbitration.

nVidia is required by the SEC to warn its investors via the 8-K filing that such a potential liability exists. If the arbitrator decides in Microsoft's favor, the resulting remedies could result in quite a substantial reduction in nVidia's profitability.

Some reports have mentioned that the basis of the dispute may lie in additional features that nVidia implemented in the XBox chipset that were not part of the original agreement. But, I couldn't tell how much of that was based on actual statements made by nVidia officers and how much was speculation.

I think we're just going to have to wait for more information before we can speculate what this all means. It is possible, after all, that Microsoft has a legitimate complaint against nVidia .
Old 04-30-02, 02:23 AM
  #12  
Senior Member
 
Join Date: Oct 2001
Location: Los Angeles, Ca
Posts: 795
Likes: 0
Received 0 Likes on 0 Posts
Re: Re: Re: Re: Microsoft brings Nvidia to arbitration

Originally posted by jeffdsmith
Graphics on the gamecube seem be doing pretty good with Gamespot calling RE the best looking video game ever...
Oh jeezus, you've got to be kidding me.
Old 04-30-02, 06:06 AM
  #13  
DVD Talk Limited Edition
 
Join Date: Oct 1999
Location: A suburbČ of Miami
Posts: 5,943
Likes: 0
Received 1 Like on 1 Post
Re: Re: Re: Re: Re: Microsoft brings Nvidia to arbitration

Originally posted by gcribbs

I also do believe that Nvidia is far and away a better graphics card maker than ATI. I am happy ATI is around to keep Nvidia honest with prices because if they get out of the consumer market we will be bent over by Nvidia.

I also do not think that the ATI name is selling the GC. The Nintendo name is selling it. The Nvidia name is far more valuable to the XBox the the ATI name is to the GC.
You're definitely underselling ATI. But regardless, did the graphics chip maker actually entire into the equation when you were buying your console(s)? It certainly didn't for me, so I don't see why it would for the average consumer that doesn't have a clue about who NVIDIA or ATI are.
Old 04-30-02, 07:28 AM
  #14  
DVD Talk Limited Edition
 
Join Date: Apr 2000
Location: Beverly, MA
Posts: 5,506
Likes: 0
Received 0 Likes on 0 Posts
it sounds like MS and Nividia should have signed a pre-nump
Old 04-30-02, 09:12 AM
  #15  
DVD Talk Platinum Edition
 
Join Date: Feb 2001
Posts: 3,189
Likes: 0
Received 0 Likes on 0 Posts
Re: Re: Re: Re: Re: Microsoft brings Nvidia to arbitration

Originally posted by Mattalos


Oh jeezus, you've got to be kidding me.
Nope.

Capcom has finally perfected the art of mixing prerendered scenery with ambient animations and polygonal objects, and the result is the most visually impressive video game ever released.
Have you played it?
Old 04-30-02, 09:38 AM
  #16  
DVD Talk Legend
 
Join Date: Jun 2000
Location: NYC
Posts: 17,016
Likes: 0
Received 0 Likes on 0 Posts
If the Xbox succeeds, Microsoft benefits, nVidia takes a loss. If the Xbox fails, Microsoft suffers, nVidia takes a loss. I don't really see Microsoft has a leg to stand on with this.
Old 04-30-02, 05:16 PM
  #17  
DVD Talk Platinum Edition
 
Join Date: Feb 2001
Posts: 3,189
Likes: 0
Received 0 Likes on 0 Posts
On a side note: Nvidia recently removed their finance chief. There shares shot up 17%.
Old 04-30-02, 08:25 PM
  #18  
DVD Talk Legend
Thread Starter
 
gcribbs's Avatar
 
Join Date: Aug 1999
Location: Sacramento,Ca,USA member #2634
Posts: 11,971
Received 0 Likes on 0 Posts
Re: Re: Re: Re: Re: Re: Microsoft brings Nvidia to arbitration

Originally posted by Aghama

You're definitely underselling ATI. But regardless, did the graphics chip maker actually entire into the equation when you were buying your console(s)? It certainly didn't for me, so I don't see why it would for the average consumer that doesn't have a clue about who NVIDIA or ATI are.
actually Nvidia being the chipmaker made me think that the xbox would have good graphics. Had S3 been announced as the chipmaker i would have felt the exact opposite way.


the average pc gamer who was a huge target for microsoft does know Nvidia is the leader in pc graphics and i am sure it gave the Xbox instant credibility when they claimed the graphics would be great.

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Thread Tools
Search this Thread

Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell My Personal Information -

Copyright © 2021 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.