NVIDIA confirms XBox console production to cease

[xbdestroya]

BIG news!! Seems NVidia will soon be ceasing production entirely of the chipset for XBox consoles.

US Market Report

Nvidia ends shipments of chips for Xbox
By Chris Nuttall FT.com, 00:04 BST May 13, 2005

Nvidia, the graphics chipmaker, said on Thursday it was ending shipments of chips for Microsoft's Xbox game console in the current quarter as what was once one of its biggest customers moved on to its next-generation machine.

Microsoft is expected to release the Xbox 360 in November, featuring a graphics chip from rival ATI. Microsoft had informed Nvidia it would not take any more product after Nvidia's second quarter, ending August 1.

The news was a clear indication that Microsoft was cutting off production of the old Xbox and of the imminent release of its successor. In contrast, Sony is still selling its original PlayStation console several years after the launch of the PS2.

Nvidia's inclusion in the original Xbox, launched in 2001, had been a major boost for the Silicon Valley company, but other areas of its business have since grown and Microsoft is no longer one of its top-ten customers.

An Nvidia chip will feature in the PlayStation 3, expected next year, and the company said revenues from that would begin to flow in after the technology licensing started in the third quarter.

The graphics company reported record sales in its first quarter ending May 1 of $583.8m, up 24 per cent on a year earlier. Net profits were $64.4m or 36 cents per diluted share, compared to $21.3m or 12 cents a year earlier.

Analysts had expected sales of $579.7m and earnings of 28 cents, according to Reuters Estimates.

Nvidia said there had been 20 per cent growth in chip sales for high-end PCs and its next-generation GPU (graphics processing unit) was set to be unveiled at the E3 computer games trade show next week.

The company said it had been forced to write off handheld inventory after Motorola cut its orders for chips for 3G phones as demand failed to meet expectations.

Nvidia expected the handheld segment to return to growth in the second half. It was bullish on the current quarter, usually the seasonally slowest with sales down 5 to 10 per cent on the previous quarter. Instead, Nvidia forecast sales would be flat to slightly up.

Nvidia shares rose nearly 9 per cent in after-hours trading to $24.75 on the news.

LINK (http://www.marketwatch.com/enf/ftmarketwatch.asp?siteid=mktw&guid=%7B5779A512%2D3 DD8%2D4E0F%2DA1A5%2D1E81954E91B4%7D&link=http%3A%2 F%2Finvestor%2Eft%2Ecom%2Fcustom%2Fftmarkets%2Dcom %2Fnews%2Fstory%2Easp%3Fsiteid%3Dft%26dist%3Dft%26 guid%3D%257B5779A512%252D3DD8%252D4E0F%252DA1A5%25 2D1E81954E91B4%257D)

[xbdestroya]

What all this means, IMO:

Firstly, I feel vindicated that the recent shortage of XBox's in the channel is indeed due to a scale-back of production, as I always theorized, and not due to 'insane demand,' as Microsoft indicated.

Secondly, obviously, it seems XBox won't be with us too much longer.

Thirdly, unless Microsoft has managed to successfully emulate the XBox on the 360, or worked an IP licensing agreement with NVidia, I think this points to the oft suspected-but-never proven idea that B/C might be lacking altogether, regardless of console version.

Probably too early to conclude on the third pont, however.

I also have to imagine a LOT of XBox fans are going to be feeling burned by this - and also probably some devs who feel that they are launching games on a system that essentially will no longer be supported.

[GUNDAMSEED]

well said Xbd i can see alot of people who just bought a x box getting angry over this .

[Viper]

I can see Xbox sales slowing to a crawl now after this announcement.

[FerrianX]

I can see Xbox sales slowing to a crawl now after this announcement.

Most gamers don't care to read up on things like this... so alot of them will remain uninformed.

[gnznroses]

maybe, but you can bet the number of games coming out for xbox will be practically zilch...

[Z]

you can also read up on X2 at IGN to learn that it is officially announced that MS will stop making games for Box at the end of 2006.

“We'll support Xbox 1 until end of year 2006, and there will be 85 Xbox games on the E3 show floor to prove it. But Microsoft's first-party teams will only be working on Xbox 360 games from here on out."
http://xbox360.ign.com/articles/613/613257p1.html

Talking about stabbing your costumers in the back.

[mckmas8808]

Yeah basically what M$ is saying is that the people that brought to you Xbox fans the best games are now producing no more games for your current systems. Not only that we will not produce anymore Xboxs this year after August 1, 2005. So devs for Half-Life2, Fry Cry Instincts, Ninja Giden Black, and etc. will not have a growing pool of users to sell to. They will need to realize that that pool will stop at about 20 to 22 million users. The PS1 is still selling in Japan and other countries today. Yeah maybe very weak but better that thought of. Imagne at the end of this year the PS1 out selling the Xbox week to week 900 units world wide to 0. :lol:

Look bad M$, looks really bad. :?

[Domination]

What all this means, IMO:

Firstly, I feel vindicated that the recent shortage of XBox's in the channel is indeed due to a scale-back of production, as I always theorized, and not due to 'insane demand,' as Microsoft indicated.

Secondly, obviously, it seems XBox won't be with us too much longer.

Thirdly, unless Microsoft has managed to successfully emulate the XBox on the 360, or worked an IP licensing agreement with NVidia, I think this points to the oft suspected-but-never proven idea that B/C might be lacking altogether, regardless of console version.

Probably too early to conclude on the third pont, however.

I also have to imagine a LOT of XBox fans are going to be feeling burned by this - and also probably some devs who feel that they are launching games on a system that essentially will no longer be supported.

I knew this was going to happen, and to be liberal about it, I gave them three years at the most before Xbox gets pulled from market shelves. But I was predicting a year after the 360 launched the market. It seems they are killing the console off way before this time. Already, they are alienating their fan base,and like you said, developers,too. I feel really sorry for those either looking to purchase one, esspecially over seas, or those just adopting the console.

One other thing I find very disturbing about this report is Microsoft annoucing in a dated report that they weren't going to pull the console from shelves when their new console launched. Unbelievable.http://community.the-underdogs.org/smiley/misc/nono.gif

I can see Xbox sales slowing to a crawl now after this announcement.

Most gamers don't care to read up on things like this... so alot of them will remain uninformed.

Have you heard of G4/TechTV? Trust me, they're going to hear about it. I give it about a week.

[The_One]

One other thing I find very disturbing about this report is Microsoft annoucing in a dated report that they weren't going to pull the console from shelves when their new console launched. Unbelievable. Hey, it's Microsoft, what do you expect :roll:? They cheat, they whine, they moan and they still come back to cheat some more...

As for the news, I was kinda expecting this, but I didn't really think it would happen well after Xbox 360's release. Looks like those plans to get a Xbox for Christmas are scrapped now...

Hmm, I wonder though, will Microsoft slash the price once more just so they can sell out all the Xbox in stock?

[Domination]

Slashing it to $129.99 will be the safest bet if they don't plan on supporting it any more while saling thier stock at the sametime without losing as much money in the process.

[mckmas8808]

So M$ will have games like The Godfather come out after the system not ever be sold in stores.

I can see it now. "Mom can I get Ninja Giden Black and Fry Cry Instincts for Christmas with a new Xbox."

Christmas day: "Sorry Timmy I got you the Ninja game and that Crying games, but for some reason they don't sell the Xbox anymore. The clerk told me M$ don't make them. Sorry"

Then Timmy cries for about an hour then remembers he brought a PSP months back and starts to play it on Christmas day.

[xbdestroya]

Slashing it to $129.99 will be the safest bet if they don't plan on supporting it any more while saling thier stock at the sametime without losing as much money in the process.

I don't even know if they have stocks right now is the thing though! Seemingly, every games store in my own area is more or less sold out of them, with new shipments coming in few and far between, and that seems to be the word from people around the net as well.

[Z]

Aaaah, I am reminded of Sony’s commitment. Many moons ago they said PS2 is destined to live for ten years. And frankly, PS2 looks to be longer than that. Heck PSOne is still kicking!
8)

the funny thing is some people actually thought Ninty would have a hard time hyping Rev because of X2. it looks like MS is doing all the work for them!

[FerrianX]

Most gamers don't care to read up on things like this... so alot of them will remain uninformed.

Have you heard of G4/TechTV? Trust me, they're going to hear about it. I give it about a week.

G4/TechTV has lost alot of it's edge due to their change in staff... I used love that channel now all I can remotely watch is Icons.

Sorry if this has been asked already, but have M$ said anything about the 360 being backwards compatible yet?

[xbdestroya]

Sorry if this has been asked already, but have M$ said anything about the 360 being backwards compatible yet?

They haven't - but what they HAVE said apparently is that they will discuss it at E3. My feeling is that it won't be backwards compatible in the traditional sense - will probably require either Live or the old XBox. I know that doesn't sound very put together at this point - just call it a theory based on different clues I've been seeing for the last couple of months.

I think if it WERE just straight-up B/C we would have heard by now.

[Domination]

Most gamers don't care to read up on things like this... so alot of them will remain uninformed.

Have you heard of G4/TechTV? Trust me, they're going to hear about it. I give it about a week.

G4/TechTV has lost alot of it's edge due to their change in staff... I used love that channel now all I can remotely watch is Icons.

Sorry if this has been asked already, but have M$ said anything about the 360 being backwards compatible yet?

That maybe true, but did you factor in the young audience as one of those possibilies? That's where I was getting at since a fraction of them would rather listen than read about this kind news.