[GamaProfile]
Gamasutra
September 18, 1998
Vol. 2: Issue 37
| Attn: Gama Readers. This is a biweekly column. If you have any points to raise, whether anonymously or openly, please [email] the writer your thoughts. Gamasutra is a great forum for raising industry awareness. I'd like some of that to come from your input. |
Show Me the Money. Please.
[09.04.98]
The Top Ten of Gaming
[08.21.98]
Aging Empires
[08.07.98]
Blow your own smoke in [Threads]
Haven't joined yet? [Join Now]
I think it was Mark Twain who said that life is too short to learn German. Sitting here at my brother`s computer, in his Berlin office, I wonder how he would have felt about the German keyboard. This is a working vacation of sorts. So far I have been to Amsterdam, and have spent a week in Germany. A quick saunter over to the UK, and I can make my way back to the warm bosom of Marin County, California. Needless to say, (not that that has ever stopped me from saying something), I have a very bad cold from entering the arctic northern climes of Europe.
So, what have I learned from this short trip? I know that coming to Europe provides a much needed fresh perspective for me. Away from the perky enthusiasm of my son`s people, not to mention the relentless hype-mongering that passes for marketing in some quarters, I am surprisingly heartened. Nintendo and PlayStation probably play a more dominant role in the markets that I am visiting than the PC. I don`t have the data to back me up on this, but I certainly have a good sense of it.
I haven`t really been hanging around games people, but rather PC hardware guys. Hanging out with old friends and colleagues who still roam around Europe selling peripherals and software into the PC channels. They all seem to feel that the PC games market, or the enthusiasm for PC games in the home computer industry in the US is more pronounced than it is in England, or Holland. Germany is by far the strongest European market, and even though the average German gamer spends as much, if not more, on hardware and software than his or her US counterpart.
A comment from a person in the graphics board business here in Berlin got me thinking about today`s sermon. Ain`t you just glad that I am not going to spend pages of Internet space spouting off about my trip? Of course you are.
Anyway, back to the 3Dfx story. This young lady, for it was a lady, and a young one at that, was yacking away about the joys of Matrox. Not being a great fan anything Canadian after a nasty incident with a piece of bacon, I couldn`t believe how Matrox maintained their German market presence with the poor showing on the 3D side with Millennium. The young lady, with big hair, for she had big hair, said that the Matrox brand was an important factor to the brand conscious German buyer, and that helped enormously. "What about 3Dfx?" I asked. Didn`t seem to have bothered this particular Matrox fan.
3Dfx Diversion Tactics
Well, that`s all good and well. Then, 3Dfx puts out one of those press releases that simply says, "We have to tell you that we are not going to be doing very well in our upcoming financials because, we don`t want anyone to be surprised by how bad we have actually done." These financial statements are cushions set out by public companies to soften the impact of a good quarter gone bad. So, now I have a story to tell. I have been waiting some time to say this, but the timing just wasn`t right. Now, it seems to be a perfect time to push ahead.
What is going on with 3Dfx? To someone in the graphics business, the company was a breath of fresh air, delivering a lucrative PC games audience willing to fork over good money for good product. They got the games thing just so right. The question on graphics industry insiders` lips was how would they transition into a full fledged merchant chip company? Would they evolve into something like Nvidia or S3? Or would they go down the ATI route and become a board and chip vendor? No one could believe the numbers on Voodoo and sadly the truth is that the games enthusiast market may have beeen saturated by 3Dfx to the point where it is out of play.
Here's Where it Gets Freaky
Still plenty of other places in the PC market that 3Dfx can go, but here`s where it gets freaky. Greg Ballard, 3Dfx´ CEO, seems to be hell-bent on making 3Dfx an entertainment platform, and somehow raising it above the merely graphics chip business. It seems that EA doesn`t think that`s a bad idea either, and may even be hoping to own a bit of this platform themselves. They`re very close, these two-- 3Dfx and EA. Pals. Chums. Buddies. Whatever. At the same time, 3Dfx comes out with Banshee, a 2D/3D product aimed at the PC OEMs. They say as much themselves.
Identity Crisis
So, now I am confused. 3Dfx , what are you? You a graphics chip company, or a games platform? You see, you can`t be both. Sure, you can have rabid gamers beating their chests about your product`s benchmarks against everyone elses. You can have your fanatics build Web sites, and magazines in your honor. They don`t spec systems though. The vast majority of PCs are sold in places where the graphics are the graphics that came with the system. Whatever they may be. A games brand isn`t worth much. But, now, according to the big press releases, and fancy agencies you have on your payroll, you`re building the 3Dfx inside brand. Been there, and seen it all before.
3Dfx is not the first company to go down this route. They are certainly more visible, and 3D is a sexier commodity, but building a graphics chip, or board brand, in line with 3Dfx`s expectations is kind of doomed. Oops. There I go saying something that I might end up regretting. No, I won`t. I will be opinionated about it, and not really worry too much about the push back on this one.
Standing on the Shoulders of Giants
This kind of thing has been going on for the last ten years, and the fact of the matter is that the graphics industry can easily swallow up 3Dfx and spit them out. What really annoys me, apart from the fact that they didn`t ask me first before they made their plans (go figure), is that 3Dfx is repeating the mistakes of others.
The memory of S3`s branding efforts with the Virge should be fresh in everyone`s mind. Also, it`s worth noting that ATI and Matrox have done superlative work in getting brand recognition for their products, but there is absolutely no way that any PC OEM is going to stick an "ATI Inside" badge on their PC unless they get a bucket load of marketing cash from ATI in return.
After their IPO, 3Dfx has a bucket load of cash, but they can ill afford to squander it all on branding. They`re going to need every penny they have competing on R&D with the likes of Nvidia, and even Intel because that`s their real competition. Furthermore, it is obvious that 3Dfx` primary aim with Glide is to have a proprietary API that shuts out the competition from Microsoft and the Direct3D acceleration crowd. Guess what? Yup, there are a hell of a lot more people investing in Direct3D than in Glide.
An Exercise in Futility
How do you hold back the sea, and is it really worth it? None of it makes sense to me on any strategic level. For 3Dfx, execution has been great. Glide is great, but it only has to work with 3Dfx hardware. Make Direct3D for one company`s hardware, and it would probably kick Glide's butt. Voodoo has been great, but everyone else is catching up, and will surpass it. The money is now being put into the 1999 chipsets.
Take a look at Nvidia`s TNT and ATI`s Rage 128. Very cool stuff, and the engineering is pretty amazing on these products. Get the point? 3Dfx is building a false wall to protect itself in the market. Frankly, once the novelty of 3D graphics wears off we will definitely see a change in the attitude of hard core gamers. Furthermore, the strengths of Nvidia, Matrox, ATI, Intel, and S3 are combined against 3Dfx, and all based around Direct3D. In 1999, Intel will start pushing its next generation graphics chip, I think it is called Portola or something, and it will cost $15 a chip. Coupled with 3D in core logic, I think it is called Whitney or something, Intel will continue to devalue graphics components to maintain the dominance of the CPU as well as to eat up that part of the real estate on the motherboard.
Wha' Happen?
3Dfx inside means diddly squat, or some such idiom. I could go on forever about what`s wrong with 3Dfx`strategy, but it`s not fair. They were first out the gate compared their peers Rendition and Nvidia. However, if 3Dfx is not careful it will end up shooting itself in the foot. Better to abandon the gamers or find a way around them quick. They got the exposure, but now it`s time to move on. PC games hardware never made anyone rich. As for EA, who knows what their part is in this whole affair. What can they be thinking? There`s obviously more there then the average strategic partnership. Doesn`t make sense. You should never mix hardware and software businesses. Let`s see how that one plays out for now. Fortunately, I am in Europe for a while so, none of those 3Dfx fanatics I spoke about can get me. But, I will be watching my back. Oh, yeah. I sure will.
Omid is the principal wordsmith at Doodah, a business name that only he may find amusing, and his wife believes will lead them to Penury (a small retirement resort off the coast of Madagascar). Omid provides all manner of writing services for those in the computer industry willing to overcome their reluctance to associate themselves with a business called Doodah. He writes for numerous trade publications, as well as doing private market analysis for companies willing to pay him exorbitant amounts of money or make promises of same. In addition, he flexes his funny bone writing copy for Web sites, packaging, brochures, advertising and PR campaigns. Wherever words of wisdom and wit are required, Doodah is there. You can reach Omid at omid@compuserve.com.