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Technology Stocks : 3DFX -- Ignore unavailable to you. Want to Upgrade?

To: Daniel P. Dwyer who wrote (13493)	6/26/1999
From: Michael G. Potter	Read Replies (2) \| Respond to of 16960

I was worried about s-video coming from the Voodoo3 3000 I own and using DVD-Anywhere with it. Well, I remembered that the card came with this short cord to go with my tv out. I dug the cord up and actually RTFM. Sure enough, the retail version comes with an s-video to rca convertor. Now I just have to wait until my DVD-Anywhere arrives and I'll actually have a use for the TV out feature. I read that TnT3 article. What a poorly written waste of time. I stopped to think about the volume that Omid is now claiming for retail V3 3000 sales. 3dfx has said that they're in 9,000 retail establishments (that number seems to stick in my mind). So each one has to be selling about 1 a month for Omid's numbers to be correct. That seems low. Maybe for the really small mom and pop operations, but the larger ones will pull the averages up. Plus i haven't seen any sign of price cutting by 3dfx, even after the TnT2 came out. Michael

To: Daniel P. Dwyer who wrote (13493)	6/26/1999 2:29:00 PM
From: Obewon	Read Replies (1) \| Respond to of 16960

<<COMPUSA will be out of business in a year>> I hate to burst your bubble but that was about as stupid as saying 3dfx will be out of business in a year. I will wager my entire stake in 3dfx (about $25,000) that one year from today CompUSA will still be in business. Though the following comment may be unwelcome to some, people need to realize that both 3dfx and Nvidia have designed very few chip architectures. 3dfx has the Voodoo based architecture (which has evolved into the current Voodoo3) and Nvidia has the Riva and TNT based architectures (which evolved into the current TNT2)! The jump to a total new architecture as stated by both companies in their next generation chips is as fraught with danger as S3's jump to the Savage3D architecture back in 1998. One slip or poor decision and you've lost the market until the next cycle. Fortunately, both are making the jump somewhat in parallel so neither is much riskier that the other. I can't really argue whether 3dfx has lost the tech edge to Nvidia at the current end of life for this architecture because I've never played using an Nvidia card. My opinion, like most here,is biased since I would like to justify my investment in the Company. Frankly, I don't think there is enough product differentiation between the two. I chose to invest in 3dfx because it combines great management with great technology (ATI also has great management since they found the successful model first but is seriously lacking in the tech department). 3dfx management make decisions based on what I as an investor am concern with. I want 3dfx to make money today and provide me with the assurance that we'll be making money tomorrow. They got burned once by their boardmaking partners so they addressed that weakness by purchasing STB which solved several long-term problems even if it created a huge short-term transition headache. Because 3dfx leads the way in defining the objectives of the industry, it has a tremendous advantage. Even now, Nvidia has been trying for over a year to convince the gaming market that it is on top of the mountain yet Voodoo based products continuously outsell TNT based products. Nvidia points to the number of OEM deals it had with the TNT, yet fails to point out that OEM are interested in price. Do you think maybe that the poor financials for STB, Diamond and Creative late last year and into this year were due to underpricing their graphics boards to OEMs? Sure Nvidia sold alot of chips but only because its partners were willing to take a large cut in their margins to do so. STB saw the writing on the wall and jumped to 3dfx. Diamond ignored the writing on the wall until it couldn't pay its bills then jumped to S3. Creative is still out there but gets most of its profits from its sound card division so it can chose to subsidize Nvidia. However, unless Nvidia does something to make Creative's card business look more profitable, Creative can just walk away. Moreover, Creative can use its distribution leverage to FORCE Nvidia to make concessions since Hercules and Guillemont have little distribution presence (comparatively). <<The next three months will be very telling. >> Finally, I have to admit that it will take at least until next spring (when Nvidia releases it NV10) to find who the next round winner will be unless Creative walks away from the graphics business altogether. Both Nvidia and 3dfx should do well until then IF they don't get involved in another margin-crushing price war. Since 3dfx now controls the price of its boards I don't foresee it starting such a contest but Nvidia's various partners could easily trigger a price war amongst themselves (ala Voodoo2) to which 3dfx might have to respond. Obewon