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Storm clouds are gathering as NVIDIA faces a reinvigorated competitor

As the old saying goes, when it rains it pours.  NVIDIA was performing beautifully thanks to aggressive pricing and performance of its 8000 series of graphics cards.  It looked poised to leave competitor AMD (formerly ATI) in the dust.  However, the latest round in graphics war has marked a dramatic turnaround with AMD's 4850 and 4870 outperforming NVIDIA's offerings at a lower price

While NVIDIA still holds a tenuous grip on the highest end offerings, with its GeForce GTX 280 GPU, this might soon slip, depending on the performance of AMD's dual processor 4870 X2 (R700) card, likely coming in Q3 2008.  Meanwhile, NVIDIA faces challenges from Intel in its low-end and laptop graphics offerings, and from AMD's PUMA chipset/graphics package in the laptop market.

The economic repercussions of NVIDIA's slippage are already visible.  NVIDIA announced yesterday that it was going to turn in revenue of $875 million to $950 million for Q2 2008, which ends July 27.  This is significantly lower than the current analyst expectations of $1.1 billion.

That was not the end of the bad news from NVIDIA either.  It announced that it was facing a massive recall, due to overheating GPUs in notebook computers.  NVIDIA reported higher than average failures in both the laptop GPUs and in laptop chipsets.

NVIDIA said that the chips and their packaging were made with materials that proved to be too "weak".  NVIDIA passes the blame to notebook manufacturers, which it says contributes to the problem.  Typically notebooks have poorer ventilation and components concentrated in a smaller space than desktop computers.

The result of the recalls is that NVIDIA will be taking a onetime charge of $150M USD to $200M USD to cover the damages.  It plans to use the money to repair or replace defective parts.  It also hopes to collect part of the money from insurers it uses.  However, it has acknowledged its problems and switched the materials it uses.

The news has resulted in NVIDIA taking a beating on the stock market, sliding over 25 percent.

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RE: Gaming recession or diversion?
By SavagePotato on 7/3/2008 12:34:38 PM , Rating: 5
I wouldn't blame the weakening of the lan on consoles.

It goes both ways realy, pc users have access to high speed internet too, and by and large, who wants to trudge to a lan to game when you can play online with perfectly fine latencies any time you want.

Lan's were great back in the day of dial up, now though, not so necessary.

RE: Gaming recession or diversion?
By JoshuaBuss on 7/3/2008 7:05:40 PM , Rating: 2
not to mention free VPNs like hamachi make virtual lans almost as good as local lans.

for me, lan parties were simply because it was impossible to enjoy a game of counter strike when most of your friends had pings over 400..

now over hamachi you can have ~40ms pings with people on the other side of the country

RE: Gaming recession or diversion?
By jamesbond007 on 7/5/2008 12:15:54 AM , Rating: 3
But you can't honestly say that it is equally enjoyable to frag someone over the Net and just see the kill come up on the screen. Kill someone (virtually, of course) at a LAN and hear them scream like a girl is great. Plus, there's always the sweet goodies, prizes, file sharing (yeah, we all do it!) and the interaction with real people. It's a pleasurable experience and no online gaming session has ever come close to the memories I have of LANing.


By overzealot on 7/9/2008 5:00:13 AM , Rating: 2
Teamspeak and Ventrilo fulfill those screaming needs.
I still LAN a bit, but I find the quality of opponents far better online.

"If a man really wants to make a million dollars, the best way would be to start his own religion." -- Scientology founder L. Ron. Hubbard

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