In december 1998 nam 3dfx STB over om niet alleen de grafische chipsets te maken, maar ook de grafische kaart er omheen. Nu ziet 3dfx in dat het niet lang meer goed zal gaan op deze manier (of zoals ze het bij Voodoo Extreme zeggen: "they were starting to really get smacked around like a rented mule") en gaan ze zich weer helemaal op hun roots richten: het ontwikkelen van de chips:
The company says it will now sell its chips to third-party manufacturers, who will create the boards that go in computers. Because 3dfx is in its quiet period (its latest earnings are due next week), officials declined to say how much of a write off would result from the closing of the Mexican plant.
Other graphics companies, such as nVidia (NVDA: Research, Estimates) and S3, focus on developing new generations of their 3D graphics chips, then sell those to manufacturers, such as Creative Labs (CREAF: Research, Estimates), which manufacture the boards. With the STB acquisition, 3dfx halted this process, relying instead solely on its own manufacturing facilities. Now, it will have to re-approach these former allies and forge new relationships with them.
The company's not betting its entire future on PC graphics, though. While it will retain the "Voodoo" name - a very familiar one in graphics and arguably the company's most valuable asset -- it is branching into new territory. It recently released the VoodooTV card, allowing PC users to use their computer monitor as a TV screen. And it plans to use the recently completed acquisition of competitor GigaPixel Corp. to forge into new areas, such as set-top boxes, cellular phones, game consoles and handheld PCs.