Graphics chip makers scrap over Half-Life

SAN FRANCISCO (10/02/2003) - Bundling 3D games with a graphics board is nothing new, although the games themselves rarely are. The extras are often halfway-decent games released a year or two earlier, and they usually get slipped back into their CD sleeves after a few rounds.

But the graphics card wars are entering a new round: A fracas between NVidia Corp. and ATI Technologies Inc. over Valve's Half-Life 2, one of the most eagerly anticipated games of this holiday season. The battle ranges from benchmarks to questions about the quality of the bundled version, and both vendors are likely pondering the value of the investment in tying the game to their boards.

Pay the Valve Piper

"The fact of the matter is, we were offered by Valve the opportunity to purchase their endorsement and do bundling stuff with Half-Life 2," says Bill Rehbock, NVidia's director of developer relations worldwide. "While we are probably the biggest Half-Life 2 fans in the world and have a good relationship with Valve, it didn't make sense to spend a lot of money on that."

However, ATI took Valve up on the opportunity with its new Radeon 9800 XT and 9600 XT, introduced earlier this week. Rumor is that an auction between ATI and NVidia for HL2 bundling rights hit millions of dollars before NVidia opted out.

"It will absolutely drive the sales of these cards," says Michael Goodman, a senior analyst with the research firm The Yankee Group. "One of the biggest component buyers for PCs is gamers. And when you bundle a highly anticipated game with the card, that really targets the gaming audience."

Goodman says the bundle coup puts pressure on NVidia, but the rival card maker is still well in the game.

"ATI has made some moves in the last couple of months, but you should not discount NVidia at all," says Goodman, calling the company "a major force to be reckoned with."

At any rate, the consumer wins. Whether you buy the mainstream Radeon 9600 XT for $199 or the big-dog 9800 XT for $499, you'll get a copy of Half-Life 2. Because the game has been delayed for release later this year, initial buyers will get a coupon.

"It will be free in the box," says Kalpesh Rathod, ATI product manager for the mainstream segment. "ATI is the official graphics vendor of Half-Life 2." He calls the game "the killer app to stress graphics components. Everyone wants to see how they're performing, and this will be the application."

Whose Half?

But NVidia representatives say it's not yet clear yet which version HL2 will be bundled with the Radeons.

"From an ATI perspective, we think that's fine that they're doing the bundle deal," Rehbock says, cautioning that the bundled version might be "a lightweight" implementation designed for vendors.

"We think that the real Half-Life 2 fans will want to own the full version with the box and everything else," he says. "And we're assuring our customers that whenever Half-Life 2 ships, they will have world-class performance on our card."

ATI responds that buyers will swap the coupons for the full version of the game with multiplayer support. After HL2's launch, ATI will bundle the same version with the boards.

After ATI landed the bundling deal, Valve and NVidia had what the players describe as "issues" over whether the HL2 benchmarks on NVidia hardware were using the best drivers for performance. Rehbock sys that's all well-rendered water under the bridge now.

"There have probably been 15 e-mails between Valve and us today making sure that we are mutually aligned on game performance," he says.

Next Battle

NVidia won't give details about its next generation of graphics boards, except that it will be a high-end refresh in the GeForce FX family and is expected to ship in October. The company is also getting into handheld graphics with its new GoForce line of products.

"We're really excited to be in this market," says Phil Carmack, vice president and general manager of handheld products at NVidia. "The cellular phone has reached that status of becoming a platform, and it's continuing to evolve very rapidly."

Goodman says he wouldn't be surprised to see ATI follow NVidia into the mobile market.

"If one gets into it, particularly if they find success, the other will follow as well," he says.

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