XBitlabs reports some Mercury Research results for Q2 graphics market share from Q1. The big winner is Intel (even before they release the fricken Grantsdale chipset) increasing share from 27% to 32% – due to the integrated P4 chipsets. ATI increased from 20% to 21%, and NVIDIA fell from 31% to 27%. The report also said that NVIDIA had 60% of the DirectX 9 market share. Not bad for a company that botched its first DirectX 9 product release, although it seem that most of these were entry level (GeForceFX 5200) components. Still, it goes a long way to verify NVIDIA’s strategy of shipping only DirectX 9 capable products in its latest lineup. That leaves ATI with 40% of the DirectX market, though those are where most of the high end cards went. This roughly means 45% of the Q2 graphics market share was DirectX 9 capable cards.
The remaining 20% of the graphics market went mostly to SiS/XGI. Matrox Graphics, Trident Microsystems (now sold to XGI), S3 Graphics/VIA, Silicon Motion and 3Dlabs now occupy very small market shares.
Well, that explains the $US18 million listed as a “deferred revenue associated with an unannounced contract” that showed up on ATI’s books last quarter. This apparently was a prepayment for R&D associated with developing the graphics chips for the next-gen Xbox. The deal was announced Thursday (Aug. 14th) and wraps up a year of negotiation. It seems that ATI has learned from NVIDIA’s bitter experience dealing with an 800 pound gorilla (read about that here). ATI’s agreement is royalty based, where ATI gets a slice of every Xbox2 sold, as opposed to NVIDIA’s deal as a subcontractor to Microsoft. Microsoft will also subsidize ATI’s research costs. This seemed NVIDIA’s deal to lose, and even with the happy happy sound bites from Microsoft’s Robbie Bach – “We selected ATI after reviewing the top graphics technologies in development and determining that ATI’s technical vision fits perfectly with the future direction of Xbox”, NVIDIA apparently wasn’t willing to be too flexible to make a deal with Microsoft – even though it accounted for up to 20% of NVIDIA’s sales over the last two years. Guess they really didn’t like having to do that arbitration thing. ATI should still be wary, NVIDIA also got an advance – $US200 million – and put 200+ engineers on the Xbox team (and then missed the initial deadline).
“After the way the first Xbox went, I would view NVIDIA’s involvement with the next Xbox as a negative,” said Joe Osha, a senior analyst at Merrill Lynch. Osha also stated that ATI could get $US35 million in Xbox revenues in 2005. Osha expects ATI will reap $25 million to $35 million in royalty revenues (about 5 to 8 cents additional earnings per share) in 2005, assuming a Christmas 2005 roll out for the Xbox2.
No one ever said that the consumer video graphics market was banal. Extreme Graphics Inovation (XGI) is, according to president Chris Lin, moving quickly to establish itself in the graphics chip market. The company aims to break even in the shortest possible time and become a very competitive, highly profitable graphics chip designer within three years. Saying that its strengths are in R&D and cost structure, XGI hopes to use a “high-profit, strong-competitive-strength strategy” and not engage in a price war. XGI was spun off from SiS in June, and acquired the notebook graphics unit of established player Trident – allowing XGI to enjoy a $US3 million revenue in July. The Trident acquisition also gave XGI a boost in attracting talent for its research and sales and marketing teams. XGI plans to maintain Trident’s product lines and customer base and will release a series of low-end, medium-range and high-end graphics chips by year-end, including a new generation of chips in September (rumored to be the DX9 capable Xabre2 series). XGI has signed distribution agreements with World Peace Industrial (WPI), Fullerton Technologies and Siltrontech Electronics, which are among the largest IT supply side distributors in Asia.
I got an eMail from Scott Bean of Mad Software with some updated info on ShaderWorks in which he addresses some of the comments of my earlier article and I thought I’d share his comments here. While a price hasn’t been set, Scott indicated that it’d most likely be free. Scott indicated that it’s geared towards experienced and non-experienced programmers as well as artists, students, etc., and that the visual graph approach makes it really easy to use.
By the deadline, Microsoft, Turbine Entertainment Software, Crave Entertainment (all US), Eidos (Britain), Ubi Soft (France), JoWooD Productions Software (Germany), and Namco Hometek (Japan) have all filed to bid in the Aug. 14 auction. According to the court order bidders were required to place deposits of anywhere from $US10,000 to $US100,000 to bid on the various asset groups, which include the in-progress games Street Racing Syndicate and Four Horsemen of the Apocalypse. Bidders interested in all of the assets ponyed up $US250,000.
Update – Ubisoft got “Might & Magic” et. al. for $US1.3 million, Namco got “Street Racing Syndicate” for $US1.5 million, JoWood got “Jacked” for $US90 thousand, Crave got “Army Men” for $US750 thousand, Microsoft got “High Heat Baseball” for $US450 thousand, Patent Purchase Manager LLC bought some various IP and tools for $US75 thousand, and Trip himself bought some unfinished games and IP for about $US400 thousand. In all they got US$4.6 million, lower than expected. Looks like everyone got a good deal except for 3DO shareholders.
Are the days of benchmark apps numbered?
In an interesting review of testing systems, Ace’s Hardware ran 3DMark03 on systems from a 350Mhz PII to an 2.8Ghz P4. It turns out that while games show significant sensitivity to the CPU, 3DMark03 seems pretty much only sensitive to the video card. In fact the 350Mhz Pentium system was either even or better than a 2.8Ghz Pentium when the former had a RADEON 9700 Pro vs. a RADEON 9600 when running vertex and pixel shader tests. Since these tests were designed to stress the video cards it’s not that surprising, but it does bring into question if tests like 3DMark03 have any place in benchmarking over “real” games and applications.