3Dfx is getting into the image game

Are consumers ready to think about graphics boards? Chip and board maker 3Dfx Interactive Inc. is betting the farm that they are.
Written by Robert Lemos, Contributor

On Tuesday, 3Dfx, which makes the popular Voodoo gaming graphic chips, will launch a $20m (£12m) ad campaign on US TV and mainstream media designed to get the non-geek thinking about their next choice in graphics card. The campaign combines in-your-face packaging and ads created by Goody, Silverstein & Partners.

"No other graphic-chip maker has aimed at the consumer in the way that 3Dfx plans to," said Bob McQuillan, technical editor at Jon Peddie Associates, a graphics research firm in Tiburon, California. For the ad campaign, 3Dfx will rely heavily on image, not features. For instance, the product packaging will eschew the usual technology bullet points in favour of scowling Generation Xers, said Michael Howse, vice president of corporate marketing at 3Dfx in San Jose, California. "When you are aiming outside the computer industry, you need to change strategies," he said.

The shift comes at a critical time for 3Dfx, three months after it merged with board maker STB graphics. 3Dfx hopes the merger -- expected to be complete at the end of March -- will combine its well-known retail brand name with STB's success at selling to PC makers.

So far, the merger seems to be backfiring. While 3Dfx hoped to gain PC makers as customers, three of the top five PC makers have signed contracts for rival S3 Inc.'s new Savage4 graphics chip, according to McQuillan. The reigning king of the OEM market, ATI Technologies Inc., is racking up sales with its Rage 128. "STB was fairly strong in the OEM market, because it offered a choice," said Mike Feibus, principal analyst with chip-market watcher Mercury Research Inc. "After the 3Dfx merger, that will no longer be the case."

The retail market may be a different picture, however, said Feibus. "Voodoo in general has a following out there -- and that is not going away." How big is their following? 3Dfx claims more than 73 percent of all games sold use Glide, the company's custom software support, to accelerate graphics. But entertainment tracking firm NPD Group estimates that 3Dfx-enhanced software only accounted for 19 percent of the PC game titles sold in 1998, making up 27 percent of the total PC game revenue. Those numbers are up from 11 percent and 18 percent, respectively, in 1997. Whatever the market, 3Dfx is depending on those same game buyers to drive sales of its new graphics boards, the Voodoo 2000, 3000, and 3500.

Unfortunately for 3Dfx, early reviews suggest the company's newest chip, the Voodoo3, lags behind its primary competitor, Nvidia Corp.'s TNT2, both in terms of features and raw performance.

Voodoo3's lack of support for Intel's quadruple-speed advanced graphics port, or AGP 4x, and 32-bit colour have made it the whipping boy in the graphics industry. That status could easily change, said Peter Glaskowsky, an analyst at semiconductor technology watcher MicroDesign Resources Inc. "By the time those features are needed, 3Dfx will have its next chip out and be supporting them," he said.

Still, Voodoo has fallen behind in speed for the first time, and it may not be able to overcome that gap. "With the advent of TNT, we have finally seen Direct3D graphics adapters that can compete against Voodoo," said Glaskowsky. "What we see now is the beginning of the end for (games with 3Dfx acceleration)."

Ironically, that puts the success of 3Dfx's products in the hands of the ad wonks. "3Dfx's entire future depends on the success of this marketing campaign," said Brian Alger, senior research analyst at investment firm Preferred Capital Markets. "Based on performance alone, it looks like 3Dfx is in danger of being dethroned."

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