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By: Stephen 'WaterDog' Waits [04.17.01]

April 17, 2001 - NVIDIA 

We're starting something new over here at HCW called the Bitch of the Week (or as often as I remember to update this). Far too often this industry affords slack to those who don't deserve it. We forgive things that shouldn't be forgiven. We justify things that shouldn't be rationalized. We pretend that what we're doing is OK because the ethics and/or legality is too murky to come out with a definitive answer either way. The Bitch is all about changing that, or at least talking about it. As you'll notice, there's a link to the forms at the end of the story with a fancy thread created just for this story, comment, voice your opinions, speak your mind. The Bitch of the Week isn't so much about me telling you who sucks and why, but about the rest of you chewing on it and spitting something out after the fact.



No one likes a bully. They steal lunch money, they prey on weaker foes, they have an air of arrogance about them, they're bad mmmkay. While it sucks to get pushed around by a bully, it also sucks to see someone else get sand kicked in their face and be powerless to really do anything about it. That's kind of like what it's been like for me watching Nvidia's treatment of the Kyro 2, and rumors surrounding its treatment of Hercules, who just happens to be building a card based on the Kyro 2.

By now you've all heard of the official internal Nvidia document that was intended for the Nvidia sales force. Basically the document bashed the Kyro 2, a chip that has been getting a lot of attention of late, and one that has been labeled a potential GF2 killer by those that have seen it. Obviously Nvidia felt threatened, and they lashed out, that's really nothing shocking in this business. The document in question was an internal one, it was never intended for the rest of the world, but the rest of the world got an eyeful of it anyway.

I can't fault Nvidia for having the document out there for its sales staff, the intended recipients, companies do this kind of thing all the time. Those that expect companies to deal with competition in warm and fuzzy terms internally need to open their eyes a bit. The document was leaked, but it's certainly no worse than what others in this industry and others have floating around for their sales teams. Nvidia was fairly smart about things, owning up to the documents, explaining who they were for and of course that they weren't for public consumption. Ok, no big deal right? Not exactly.

Rumor has it, that because Hercules is throwing quite a bit of weight behind the Kyro 2, Nvidia will be jacking chip prices on them. Preferential pricing is something every industry sees, however hidden or justified, but that doesn't make it right. You need to look no further than the processor industry and the relationship that Intel and Dell have. Dell never runs short on Intel processors, and you know they're not paying the same price as everyone else, especially since they have remained a conspicuously Intel-only shop amidst faster and cheaper processors from AMD. Of course Dell represents a huge volume of chip sales, so I'm sure any price breaks and agreements are based, at least legally, on the differences in volume of chips purchased. 

If, and it's an if folks, Nvidia is indeed jacking Hercules on chip prices as retaliation (however subtle or disguised) for hyping the Kyro 2, someone needs to cry foul. Sure Nvidia is pissed, it's hyping its GeForce 3, a chip that's far too expensive for a reasonable person to buy when the real benefits won't emerge for 6 months when new games come out. On the other hand, the Kyro 2 is making big waves with the potential to beat the GF2 Ultra in some cases, certainly trouncing the Geforce 2 MX overall, and coming in at a fraction of the price of Nvidia's Geforce 3. Stepping back, both companies are going after very different goals. The Geforce 3 pushes the technology envelope and gives you the absolute best performance for the most cutting edge API features. The Kyro 2, on the other hand, gives you performance that's good enough, for games you can buy now, at a price everyone can afford. Each will own their respective pieces of the pie, but if you look at the market right now, the Kyro 2's slice is *much* bigger.

The internal documents are cheap shots, but nothing that I'm sure any other company doesn't do. However, the potential manipulation of chip prices goes far beyond what anyone would consider reasonable. It's a knee-jerk reaction to something that Nvidia obviously was ill-prepared for, and it doesn't sit well with me. Just because Nvidia has dropped the ball in the price/performance ring and put all of its weight behind the X-Box and Geforce 3 doesn't justify the rumored flailing. It appears that Nvidia has become a bit of a bully in the graphics playground, it swallowed up 3dfx, and now it's beating up on Hercules for hanging with Kyro - that ain't cool. In fact, that makes Nvidia the Bitch of the Week.

A thread has been started in the forum on this topic, join the discussion!

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