AMD may be forced to sell XBox chips at loss.

nVidia may be forced to sell XBox chips at loss.

I find this rather typical for M$, but what company in their right mind would enter into such an agreement? As you probably know, nVidia makes the graphics chip for the XBox and surely, they offered a sweet deal to M$ for a particular quantity, but it seems that M$ has so much leverage that they can dictate their suppliers' pricing and production.

Here is a short quote:

Microsoft is currently in arbitration with Nvidia Corp. , which makes the Xbox graphic chip, over the price it pays for the chips and Nvidia's production schedule. Nvidia has said in filings with securities regulators it may have to produce the chips at a loss if Microsoft wins the case.

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Here is the link to the entire article:
http://story.news.yahoo.com/news?tm...u=/nm/20020822/tc_nm/tech_microsoft_xbox_dc_1

I can't understand why M$ would treat such an important supplier this way. If I were nVidia, I would not EVER renew whatever contract I had with them. Further, what other companies would ever want to be a supplier for M$ after seeing how nVidia was treated??? I hope that nVidia prevails in arbitration. If not, I hope that they are not affected too badly by this.

Note: The original message has been edited due to my own stupidity. I have reported my stupidity to a moderator so one can move this thread to the proper forum.

amd makes the Graphics chip ??


No i thought it was nvidia who made the graphics chip and sound card and intel makes the p3 733 mhz cpu in the xbox , also western digital 20 gig hdd

ummm. If Nvidia makes the graphics chip, why did you name this "AMD forced to sell Xbox chips" when they don't, and then put it in the AMD forum?

Docta_Z said:

ummm. If Nvidia makes the graphics chip, why did you name this "AMD forced to sell Xbox chips" when they don't, and then put it in the AMD forum?

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AAACCCCKKK!!! You are correct, of course. I should have posted this in General Computer Related discussion, or Video Cards, or even Vendor Discussion. ANYWHERE BUT HERE..... Geesh, you'd think I'd know by now...

NOW, the question is: Do I start another thread or have a Mod move this AND re-title (and edit) the message???

Just label me TOTALLY CONFUSED, today (sorry)

Well when you produce console hardware, you dont get the money back from the systems that are sold. In fact you lose money due to the competitive pricing(no one would buy a $650 now adays). All the money is regained through royalties in software sales.

yeah microsoft will make their money back from licensing fees, but the hardware suppliers are not so lucky. I dont think they would have anything to gain from seeling their products at a loss, besides hurting their competition.