Pushing Silicon
3dfx announced at Comdex that it would no longer sell or manufacture graphics boards, and that it would focus just on the design.  Why did 3dfx think it was such a great idea to manufacture the hardware in the first place?  Yeah, it puts greater control over marketing and distribution channels, but it is a very pricey risk.  This could have hurt 3dfx more than any other misstep.

The Hammer Falls
So, now that 3dfx is up for sale, you might wonder about some of the terms of its demise.  Check the Guru3d.com news page out first, and come back when you’re done.  There were a few nifty quotations to take out of the FAQ, and I’ll translate them from businesspeak to realspeak:

 “...the lawsuits between the two companies will be dropped.”

This is no surprise, since a lawsuit is basically a threat to take money or property away, and it’s not like NVIDIA is coming in as a hostile corporate raider - 3dfx merely ran out of money, and they’re trying to sell the company off.  The lawsuit could have been a last-ditch effort to raise money, but 3dfx was wise to use it as a selling point instead.

“What happens to the 3dfx and Voodoo brands?
As of the signing of the definitive agreement, both the 3dfx and Voodoo brands become property of NVIDIA...The structure of this deal allows NVIDIA to purchase certain assets that are consistent with our business model without acquiring 3dfx liabilities...The 3dfx product in the channel and installed base and customer support remain the responsibility of 3dfx.”

So NVIDIA gets the benefit of 3dfx’s precious branding campaigns, all the clout that comes from the Voodoo and 3dfx names and all of 3dfx’s technology.  They don’t keep the liabilities, which happen to be pricey items like tech support for old 3dfx technology, they won’t manufacture the new boards themselves (designing the hardware is enough for now, it seems) and the dying 3dfx itself is still responsible for everything it sold out to the retail stores.