Introduction

End of an era

A couple of hours ago 3dfx made the surprise announcement that the company's "Board of Directors will recommend to its shareholders that they approve the sale of most of the company's assets to NVIDIA Corporation (Nasdaq: NVDA- news) as outlined in a definitive agreement between the companies that was signed today, and also approve a plan to dissolve the company following completion of the asset sale."

NVIDIA has agreed to pay 3dfx $70 million in cash and 1 million shares of NVIDIA stock for 3dfx's core graphics assets. The current value of the deal is $112 million based on NVIDIA's closing stock price on December 14. "Assets included in the transaction include all 3dfx intellectual property and chip inventory as well as certain other assets. In addition, upon signing the definitive agreement, 3dfx transferred to NVIDIA the '3dfx' and 'Voodoo' brand names and trademarks." The transaction is subject to approval of 3dfx shareholders and government anti-trust inquires.

Interview

We had the opportunity to ask NVIDIA's Brian Burke about the deal. Our questions are in bold. Brian's answers are in normal font.

FiringSquad: Will NVIDIA continue driver support for 3dfx's Voodoo 3,4,5 line?

We're not purchasing 3dfx's current product line. We're only purchasing 3dfx's core assets. Support of 3dfx's current products will remain with 3dfx.

FiringSquad: Are the unannounced Rampage, Sage, Spectre and Fear designs included in the asset deal?

Yes, all of 3dfx's core graphics technology is now owned by NVIDIA, including all patents and pending patents.

FiringSquad: Will NVIDIA be implementing any GigaPixel technology in the Xbox?

It is certainly our option to include GigaPixel technology since it is now ours. However we're not making any new product announcements or changing any specs for announced products today.

FiringSquad: Is anti-trust an issue at all? Or is this legally different from a merger?

We do not expect to encounter any anti-trust issues at this time. We are submitting the transaction for approval under the Hart Scott Rodino Antitrust Improvements Act of 1976. On a side note, when the deal is finalized, all the patent lawsuits between NVIDIA and 3dfx will be dismissed.

FiringSquad: Does NVIDIA plan on expanding its engineering team with 3dfx engineers in the upcoming weeks?

The physical employees are not part of the deal. Their future will be determined by 3dfx, however, we know there are a lot of very talented engineers over there, and we're always looking for an influx of new talent. If they choose to pursue a career at NVIDIA, we'll be happy to entertain them.