Here’s an interview with Jen-Hsun Huang, CEO of Nvidia, the leading maker of graphics chips for gamers. Last generation Nvidia built it for the Xbox and next generation for them is working on the PS3.
Do you think you picked the right horse in the video game war this time?
You can’t build chips for all the game consoles. That’s not possible. They would all like a slightly different style from the others. Difference is important. The same chip company would have difficulty designing chips for the different styles. It’s also so high stakes that you need to focus. No one has enough extraneous resources around to build chips for all the game consoles. You have to build one or so at a time. In a lot of ways, they also pick you. Sony picked us and Microsoft didn’t. It’s not so much we don’t pick the horses. I don’t think that working with Sony is wrong. There is no way that is going to be wrong. There are many wonderful things that Sony did. I’m excited that they made Blu-ray high-definition storage as a standard part of the PlayStation 3 platform. The first PlayStation had a CD-ROM drive. The PlayStation 2 had DVD. It makes no sense for the PlayStation 3 to use DVDs. To postpone it by a few months so they could include Blu-Ray was a master stroke. When that comes out, it’s going to look so much more advanced than last-generation game consoles. I think that was a wonderful call on their part.
When you look back on your relationship with Microsoft on the Xbox, did it serve your purpose of getting into the game console business?
I always felt it was inevitable we would work on consoles. We invest $750 million a year in R&D in graphics processing. No other company invests that much in graphics processing today. This is such an incredibly deep technology and there is so much more to do. It makes sense that in the long-term we would work on game consoles as well. The others can’t keep up with the R&D that we do. That part makes perfect sense to me.
Given how the Xbox 360 turned out, did you have any regret about not winning the graphics chip for that console?
Not at all. We could not afford to build the graphics for the 360. Our most important asset is our people. If we use our people on a project where the economic return is not good enough, and there are other projects we could be working on, then we’re going to lose money. We were a lot smaller company than ATI at the time. Maybe ATI could afford it and we couldn’t. I know I couldn’t afford it. I would love to build it. I just can’t afford it.
ATI is excited about unified shaders. If you pull back, how do you see if your people are making the right decisions?
For each one of our generations, we need to have a vision of what we want to do. It costs hundreds of millions of dollars to come up with a new architecture. I don’t know what they’ve built for next generation. It comes down to a different system vision for what we are trying to achieve.
Are you manufacturing the RSX (PS3 graphics unit) for Sony now?
It is in production. It has been for some time.
Do you have a PlayStation 3 in your home?
Not yet. I hope I get one of the first ones.
Does it look like it’s on schedule?
Sony hasn’t changed their schedule. I think that’s the most important thing. I thought it was a master stroke that they did.
Everyone criticized them for falling behind and having a high price and costs as high as $900. Why was it a master stroke?
PlayStation 2 was launched seven years ago in Japan at about $399. If you use inflation, it’s the same price, approximately. The important thing is you cannot announce a game console (PS3) for the next ten years and not have Blu-Ray. It’s an impossible scenario. I think they got that perspective right. The moment we put those consoles together it’s going to be very clear. If I’m going to buy a next-generation game console, I’m going to buy a console with next-generation media. It’s going to last 10 years.
Two out of three of the players have bet you don’t need it. Nintendo has bet you don’t even need HD for the next five years.
Nintendo’s perspective has always been different. The platforms that are being built now are not just game consoles. You use it for all kinds of other kinds of applications. In the case of Nintendo, they wanted to build a game console. They built a wonderful game device. Their focus is games and enjoyment. They will be myopically focused on that. I think that is terrific. Their perspective is different from the other two. If I’m going to buy a next-generation game console, I’m going to want next-generation media.
Do you think Microsoft planned for a five-year cycle and that Sony planned for a ten-year cycle?
I’m not sure how Microsoft is going to do in this transition. They are clever and they will figure out a way. I’ll make a prediction that Xbox 360 can’t possibly be a DVD-only device by Christmas of next year.
They will modify it?
I don’t know how they will do it. But I just can’t imagine going to a store and saying that this console has a Blu-Ray and this one has DVD. Remember Dreamcast?
Do you think they will go further than the HD-DVD accessory that they have planned?
I don’t know how they will do that. Then they will have two platforms. You have the Xbox 360 with DVD. That is what Xbox 360 will mean. If you want to play HD, you have to buy an accessory? If that’s the case, I’ll buy an HD player. I know Microsoft will come up with clever ideas. These are the challenges. Every Xbox 360 they make in advance of that decision makes that decision that much harder. You could have two Xbox 360s. It’s a very tough strategic challenge. Sega had the same strategic challenge when they launched ahead of Sony on PlayStation 2. The executives at Sega are very smart and the Dreamcast was a very good machine.
An extended version of the Nvidia interview can be found at Mercurynews.