Originally Posted by MifuneValentine
Another thought -- Remember nVidia\'s first multimedia product was an interesting but underperforming
3D video/advanced audio PCI card (before there were many PCI audio cards). The thing died in the market,
and not many people took them seriously when they first announced RIVA cards that eventually saved the
company.

I think I read somewhere that they were considering adding audio to their cards again somewhere, but I may
be mistaken there. If it\'s correct, though, might they not be selling stock to raise money to buy Aureal?
Those folks are definitely considering selling. nVidia would then have the best 3D graphics and best
3D audio in the consumer market.

Just a WAG, of course

S3-Diamond is spinning off and selling the S3 graphics division. I doubt that means they much want to continue making videocards at all. Remember, they don't have to sell S3 simply to start selling nVidia-based graphics cards again. They could do that at any time.

Ah, nothing like speculation...even silly speculation.

First, nVidia isn't "sweet" on S3's technology. They were being sued by S3 (like they had been sued by SGI) and to settle the suit nVidia agreed to license its technology in a cross-license agreement with S3. They settled the SGI suit in exactly the same way, the only difference was nVidia made cash payments to SGI in addition to the cross-licensing agreement. nVidia was never trying to get S3 technology to begin with.

The flip side of course is that whoever buys S3 will inherit the cross licensing deal with nVidia, which means they'll have whatever access to nVidia technology S3 has as a part of the agreement. Maybe S3 figures that gives their graphics division some value, who knows.

But nVidia's hardware and software engineers are already a lot better than S3's, and nVidia's technology is better than S3's, so it's difficult to see what might be of interest to nVidia in purchasing S3.

However, there is the slight possibility that this might be a tactic on the part of S3 to force nVidia to cough up some big bucks by way of offering the graphics division, along with the nVidia cross-licensing deal, to the highest bidder. If the cross-licensing deal is extensive, nVidia may be forced to buy the graphics division simply to protect its IP.

Also, it's important to remember that 3dfx, for instance, has been a consumer 3D market player for quite awhile longer than nVidia and has a bunch of its own patents, not to mention the patents it now owns with Gigapixel. Additionally, nVidia's cross licensing deal with SGI doesn't give nVidia any rights at all over SGI patents. nVidia has to win the suit that 3dfx has lodged against it for patent violation for nVidia's multitexturing methods. All in all, nVidia has been sued for patent violation by three companies, S3, SGI, and 3dfx.

As I mentioned, it settled with S3 with a cross-licensing agreement, and it settled with SGI by making cash payments to them in addition to a cross-licensing agreement, but it has been unable to settle the suit with 3dfx and that suit is still pending.

Unless nVidia feels it may forfeit some of its intellectual property if S3 is sold to another party, I see no reason for them to buy it.