The Last Days at 3dfx

sand writes "FiringSquad has a detailed account of what happened in the final days at 3dfx. Every 3dfx product that was released or upcoming is discussed by a former 3dfx employee with inside knowledge on what caused the product delays (including an employee who forgot to fly to Asia to pickup the first Voodoo5 chips). He also discusses money mismanagement and the STB merger. It's a very enlightening article for anyone who's interested in 3D graphics and what goes on inside these companies."

Businesses come and go

[ites]

There is no rule that says that business have to survive.
3dfx changed the graphics scene at a time when this was worth doing,
but today there is little need for faster graphics.
It's natural and normal that the market moves and the companies move with the market.
When a company is so focussed on a single segment, they usually go broke during such changes.
Sad, but presumably their excellent people will find good work elsewhere.

LOL

[headchimp]

Just love getting the skinny on failed companies. Wish people from other companies would come out and do the same.

Competition

[e8johan]

This is what competition is all about. When a company cannot deliver the best product to the best price they don't get any income. If you don't have and income and spend alot without being able to overtake your competators, you will enventually run out of money. It is not fun, but reality in a market economy.

Eventually we will see this when it comes to ATI and nVidia, or they will find a niche market to survive in. The big profit will go to the one making the best product at the best price.

Note - I do not critisize market economy, without it we would probably not have hardware accelerated 3D for home computers at all!

Investors gets the raw end of this...

[Anonymous Coward]

They did truely sell out. The people who bought their shares were left with nothing. And once again the CEOs and all the big-urns gets a fat bonus with a big grin on their faces as they make this oh-so-tough-decision. It was so very pathethic to get the letter for 3dfx.

They didn't innovate enough

[91degrees]

They should have added useful features and clever thinking that circumvented the problems that plagued the other companies. AGP Texture bandwidth could have been solved by texture compression, but S3 ended up doing that. 32 bit colour was implemented by everyone except 3DFX. They could have saved a lot fo bandwidth if they'd have come up with better Z buffer algorithms, but PowerVR did that. They could have added programmable graphics, but that was left to ATI. They could have put T&L on the card, but that was left to Nvidia.

3DFX failed because they didn't innovate

Voodoo cards

[AliasTheRoot]

At the start of the consumer 3d graphics business Voodoo were clearly superior, I still have a Voodoo 1 laying around somewhere, there were problems; the whole passthrough cable thing, the lack of windowed support & 16bit clour were all problematic. As an upgrade Voodoo offered the second revision that could run in SLI mode. It required two PCI slots in addition to your 2d graphics card and was horrendously expensive.

nVidia released the TNT that offered similar performance, in one card (not 3!), did 32 bit colour and was significantly cheaper.

3DFX was never competitive from then on, offering weaker, more expensive products that relied on brand name support.

The widespread adoption of D3D / OpenGL around this time over the proprietary Glide API was the nail in the coffin.

There was no reason to buy anything but 3dfx

[StupidKatz]

Up until the TNT (TNT2), 3dfx was still king of the hill... It would be like buying a Maxtor drive back in Western Digital's heyday.

You *know* what works, so why buy anything else? On the other hand, that's why I like hardware review sites like anantech and Tom's. You may not want to trust them completely, but they do give you a free peek at hardware capabilities. :)

Re:Businesses come and go

[ites]

This is true.
The concept that a business stopping is 'bad' is perhaps a consequence of stock markets.
In fact it's quite natural that businesses stop being relevant and thus cease trading.
It's a shame when they actually go broke, it would be smarter to liquidate before that
and split the proceedings amongst the shareholders.
But this almost never happens, because we have come to believe that a business must succeed or die, never just quit while the going is good.

GLIDE

[muzzmac]

I like many others was not concerned with them going. Thier attempt to lock the market in via the proprietray GLIDE API was a blatant move to control the market.

I'm happy to see the tail end of any company that does this.

Thier lawsuit against the guy doing the GLIDE wrapper didn't help improve my opinion of them. :-)

Re:Competition

[jayayeem]

Both ATI and nVidia can survive because the both support the microsoft DirectX APIs. 3dfx could not survive because they did not support them, or supported them only as an afterthought to their own Glide. All Windows users have DirectX... a few had Glide. As the performance edge disappeared, so did the reason to support Glide.

Re:Businesses come and go

[mrleemrlee]

The notion that the death of a business is no big thing ignores the human element and several economic facts.

First of all, the death of a business creates all kinds of collateral damage, from employees who lose their jobs to creditors and shareholders who never get paid. When the going is good, wealth is created, which creates benefits not only for the company, its shareholders and its employees, but also for its vendors, the municipality it resides in, and surrounding businesses where employees shop (this is known as the "multiplier effect," if you've studied economics). Many, many people and entities gain from a healthy business.

Second, the idea that a business should "quit while the going is good" is ridiculous on its face. Businesses are started to create wealth. They are best at creating wealth "when the going is good." It makes no sense to start a business at all if you're planning to close up shop when you start to be successful. "We just made our first profit! Time to liquidate!" Sure ...

Businesses certainly can quite easily become irrelevant, but when that happens, there are real costs associated with that, to many consituencies. A business dying is quite far from a neutral event.

There's Turtle Beach

[Anonymous Coward]

However, they do not appear to be popular, or even widely available, here in Europe. Until extremly recently, every sound card I have ever seen for sale, or installed, or owned myself, has been a Creative card of some description. As it happens, this computer I am using (Company owned) has a Turtle Beach in it, and that is the first time I have ever seen one. At home I currently use the onboard Via 82Cxx Ac'97, because it was there, and it is the first time I have heard on board audio actually sound passable.

Creative have been at the top of the pile for so long that it is difficult to imagine them going the way of 3dfx. However, sound cards are becoming a comodity item, and it seems that they are bailing out of the low end market as quickly as possible. The low end is being eaten up by integrated motherboard chipsets.

Well this has certainly been a bit of a rant without much of a point. Or direction. Oh well.

Re:They didn't innovate enough

[CoolVibe]

3DFX failed because they didn't innovate

No, it failed because of braindead and utterly stupid upper management. Most companies die that way.

It's always the management that screws it up. Remember that. Read Dilbert. Understand it. Make it your corporate religion. Prevent falling on your face. Oh, and don't forget: laugh.

Death by arrogance

[John Ineson]

They day 3DFX bought STB was the beginning of the end. The sheer arrogance of believing they could cut off all their customers and just have the whole business to themselves. That they could compete with both chip *and* board manufacturers, and still come out on top. Sure, they had a head start, but Creative, Diamond, etc, would inevitably throw their considerable support behind another chip company.

The management overplayed their hand, big style, they were bound to lose. They were just way too cocky. Of course you can see that just from the lunch budget.

Sure!

[zrk]

Most secret technology is often sent through methods that can be intercepted by halfway decent corporate spies.

Re:GLIDE

[Sycraft-fu]

Actually Glide orignally was a benign move. Back in the day when the Voodoo first was being realised, there weren't any acceptable APIs out there. DirectX was still too primitive to be really taken seriously and OpenGL was just more than the Voodoo could handle quickly. Hence Glide, which was optimised for how the Voodoo hardware worked.

The first Voodoo really was a pretty amazing hack to make it work at all. When 3dfx first demoed their new card on a simulator, they got laughed at, people said they'd never make it real silicon. It was therough a lot of ingenuity and scaling back features that they managed to build a 3d card at a consumer pricepoint. It was expensive, yes, but not the thousands of dollars pro cards cost.

Their big problem later was that they really failed to move forward. Technology progressed to the point where you didn't have to make all the compramises and cards like the TNT and TNT2 proved it. Also, Glide was a relic that they should have tried to phase out since DirectX did come to mature and cards had no trouble with OpenGL.

Re:Competition

[dpilot]

You've missed the point. There is not supposed to be a Final Winner, or else we all lose. As soon as there is a Final Winner, competition dies. At any one generation, the Winner gets better profits and the right to compete on the next generation. But you want there to be a runner-up who will viably go on to the next generation, as well.

We have let Microsoft color our thinking too much, fill us with envy, and convince us that this is The Business Model.

3dfx started to fail for this reason

[MtViewGuy]

I think one thing that really started to kill 3dfx was the fact until Voodoo5, 3dfx acceleration required you buy a separate board in addition to the main graphics card, something many users and OEM's intensely dislike.

When both nVidia and ATI started offering better 3-D graphics cards that didn't need a second card for good 3-D performance, that seriously hurt 3dfx very quickly. It also didn't help that 3dfx's offerings when the Voodoo5 did finally get released didn't compare well with the nVidia and ATI competition, either.

What finally killed 3dfx was the release of nVidia's GeForce 256 chipset, which offered a quantum leap forward in 3-D acceleration. ATI's rapid development of the Radeon R100 and R200 chipsets didn't help things for 3dfx, either.

It's the management, silly

[Aapje]

Yep, it's all very simple:

If a company fails because it tries to do the wrong things, the management is at fault because they are supposed to tell the rest of the company what to do. If the rest of the company fails to do the things the management asks of them, the managers are at fault because they hired these guys.

In short, always blame the boss when something goes wrong. ;)

Reads like a 5th grader's essay.

[Cinnibar CP]

I don't see this as a comprehensive storyline explaining the downfall of 3DFX. The article is poorly written, and there is little detail given to the supposed problems and failures that brought about the downfall. Most of what IS in the story is anecdotal, vague, and opinion. It seems that the author was more interested in listing the historical evolution of the 3DFX product line than giving specific, concrete examples.

Lacking perspective, it's difficult to see factual evidence backing the claim of expensive (30-50k) monthly lunch costs, and providing drinks and snacks to employees hardly constitutes what I would picture as the cause for downfall of a company. The author vaguely implies that mismanagement and poor allocation of resources is responsible, but hardly gives detail to these claims, preferring to point out the flaws and errors that bypassed QA as evidence.

The issue where someone "apparently" forgot to go to Asia to pick up a batch of chips is also never elaborated upon.

Towards the end of the article, the author's writing skills give out and we're bombarded with with specifications for items that failed to reach market.

Re:They didn't innovate enough

[Junks Jerzey]

3DFX failed because they didn't innovate

That's silly. 3dfx innovated like crazy:

* First high performance consumer level 3D card for PCs.
* First multitexturing in a PC card.
* First trilinear filtering in a PC card.
* Glide API, back when Direct3D and OpenGL were poorly supported on the PC.
* Higher precision color blending with 16 bits per pixel. Operations occurred internally at 22-bits, I think.
* Able to connect multiple Voodoo 2's together for--what was then--unheard of performance.

Let's not rewrite history to fit your own ideas, okay?

Re:It's not THAT bad...

[Bamafan77]

While I agree the writing style could be cleaned up, I think the author delivers on the promise he he stated in his introduction -- to give a brief overview of what went down during the fall of 3dfx without going into heavy details. Yet you guys are hammering for doing exactly what he said he'd do!

"Lacking perspective, it's difficult to see factual evidence backing the claim of expensive (30-50k) monthly lunch costs and providing drinks and snacks to employees hardly constitutes what I would picture as the cause for downfall of a company"

Now you're taking two different things and trying draw a conclusion that the author did not. The author was saying that extravagent spending was the norm at 3dfx, not "free Dorritos resulted in the downfall of this company". And as for as the "factual evidence" is concerned, what do you want? A detailed line item invoice of the catered lunches from month to month? Remember the author only promised an overview.

Overall I would have liked more detail too, but the article actually did manage to provide new insights and details that weren't covered previously.

What I don't understand is:

[DarkHelmet]

1. 16 bits is enough for everybody. But we don't just do 16 bits. We do internal 32 bits, and dither to 16 bits, so it's much like working with 22 bits.
2. 256x256 is large enough for textures
3. Nobody *really* wants an OpenGL ICD. That Carmack, he's such a card!

The trouble was that they stopped listening to everyone. Their goal was to become an OEM part manufacturer, and to gain name recognition by their 20 million dollar TV ad campaign (which those ads DID make me laugh).

The 3d card business is a pissing match. 3dfx was dead on when they realized it was a pissing match for speed. What they DID NOT realize is that OEMs like little check marks to assign to their cards. Things such as 32 bit color, z buffer, onboard Geometry, etc.

No matter how much they screwed up, I still wish 3dfx was around. One more for competition makes the Radeon 9700 cheaper.

Re:Businesses come and go

[iamethan]

Remember the movie Other People's Money?

What happened to the buggy whip companies? Even the company that made the best buggy whip eventually went out of business if they didn't change with the times to follow the market.

Re:Surprising this has not happened with soundcard

[Anonymous Coward]

Makes me wonder how Creative have managed to stay top of the soundcard pile

A combination of great marketing and incompetent consumers. The Ensoniq AudioPCI had superior sound. Aureal had superior sound. Right now, Turtle Beach has superior sound. It doesn't seem to matter to consumers (ironic considering that Creative is going to lead them into the path of audio slavery with their DRM "support").

At first, the reason for Creative's success was that "Sound Blaster" was the standard, and it was quite difficult (well, a hassle at least) to develop for different sound cards in a DOS environment. This created a "I should buy Creative if I expect sound" mentality for game players (and even though no one would like to admit it, games have been driving the hardware market since 1990). After the introduction of abstracted sound APIs supported by the OS, that "SB compatibility" isn't as important, yet people still had that "I should get Sound Blaster if I want to play games" meme stuck in their heads.