Microsoft and NVIDIA end Xbox feud

— 6:50 PM on February 6, 2003

The fight between MS and NVIDIA over pricing of chips for the Xbox finally ended today. Here's the blurbage:

SANTA CLARA, CA--FEBRUARY 6, 2003--NVIDIA Corporation (Nasdaq: NVDA), the worldwide leader in visual processing solutions, and Microsoft(r) Corporation announced today that the companies have settled all issues related to pricing of the Microsoft Xbox GPU (graphics) and MCP (audio and networking) chipset and have ended the arbitration between them. In addition to resolving this pricing dispute, the two companies have agreed to collaborate on future cost reductions for the Xbox. More details will be provided during NVIDIA's quarterly conference call to be held February 13, 2003.
As the press release indicates, we don't know much yet about the terms of the agreement, but this agreement has almost got to be good news for NVIDIA . These two chips—essentially an nForce northbridge with an integrated GeForce3-class graphics engine and an nForce south bridge chip—might just be getting cheaper to produce, which may have helped end the standoff.
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