Nvidia in Chip Spat With Microsoft

[DZNUTZ]

Nvidia in Chip Spat With Microsoft
29-APR-02
Nvidia, the chipmaker that supplies the Xbox's central graphic processing unit to Microsoft, is currently in arbitration with the company over the prices of the chips they produce, according to Nvidia CEO Jen-Hsun Huang.
In a call to analysts, Huang stressed that although the arbitration is "just a pricing issue" and Nvidia will maintain strong ties with Microsoft, they are currently disputing over the price of the Xbox's GPU and MCP (media communications processor). Nvidia received a flat $200 million fee in 2000 for the two chipsets, which together form the core of the Xbox system.

"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," Huang told the Reuters news service earlier today. "In the meantime we're recognizing the difference between what Microsoft is paying and the price they believe they should be paying as deferred revenues. When all this gets resolved, my guess is it'll be a pretty dramatic positive impact on our business."

Huang said in the analyst call that he expects his company to emerge victorious from the arbitration. However, Nvidia's operating income will go down approximately $13 million per quarter to account for the difference between "the price being paid by Microsoft and the price Microsoft claims it should be paying" until the trial is over.

[Frostberg]

take some of that 500 million that is suppost to be for advertising to pay for it!

[tech]

Because of this spat, the xbox2 will not carry a nvidia chip. This is sad news. I haven't seen anyone really win against microsoft in the long run.

[LynxFX]

Originally posted by tech
Because of this spat, the xbox2 will not carry a nvidia chip. This is sad news. I haven't seen anyone really win against microsoft in the long run.

And you came to this conclusion how? Enough with starting lame rumors.

[tech]

Yeah kindof a lame rumor but I heard another rumor that AMD and ATI are going to be in the xbox 2. When have you not seen microsoft crush its competition? I own 5 Nvidia video cards and love them to death along with the xbox but come on, its all about the money. You never know, microsoft has so much money that it may create its own GPU.