Posted January 07, 2013
http://online.wsj.com/article/SB10001424127887323706704578225601224073018.html
LAS VEGAS—Nvidia Corp., a well-known seller of components for videogame hardware, plans to change its strategy by marketing a gaming gadget of its own directly to consumers.
The Silicon Valley company disclosed plans for an unusual portable device that can run its own games software and wirelessly stream games running on powerful home computers. It can also wirelessly send the game images to be viewed on high-definition TVs in addition to its own small screen.
Nvidia didn't disclose the price of the device or say when it would be available, but the Sunday night announcement at this year's Consumer Electronics Show struck some observers as one of the show's first real surprises.
"I have to say I was fairly stunned," said Patrick Moorhead, a market watcher at Moor Insights & Strategy, after being briefed on the plan.
Mr. Moorhead said Nvidia appeared to be following the technology industry's recent "verticalization" trend, in which companies are making components or software as well as end products that use them. Microsoft Corp. MSFT -0.19% recently adopted that approach with its first-ever computer, the Surface tablet.
Jen-Hsun Huang, Nvidia's chief executive, unveiled the device-development effort, called Project Shield, at the end of a glitzy event at the Palms Hotel here. It was preceded by a series of other announcements, including a technology development effort to allow other companies to stream games over the Internet to consumers.
Nvidia, of Santa Clara, Calif., is best known for graphics chips and circuit boards that render visual effects in videogames and other personal-computer software. It more recently branched out into microprocessors for tablet computers and smartphones, combining graphics circuitry with calculating engines based on technology licensed from ARM Holdings PLC. ARM.LN -0.31%
The Project Shield device runs on a new version of that Tegra processor line that is also being announced at the CES show. The gadget resembles a controller familiar to users of game consoles, with the addition of a five-inch display screen and built-in audio capability.
Ujesh Desai, Nvidia's vice president of corporate marketing, cited two primary inspirations for the product. First, many games have been developed for smartphones and other devices that run Google Inc.'s GOOG -0.44% Android operating system, but those gadgets don't have the control buttons that gamers favor for fast action.
Secondly, more complex games software has been developed over the years for PCs running Windows. To enjoy these programs, however, users typically sit next to large tower-style computers or heavy, beefed-up laptops.
By streaming the action to the new device using a variant of Wi-Fi technology, a user could play those games from bed or other more-comfortable locations, Mr. Desai said.
The key to Nvida's strategy, he stressed, is the ability of a single piece of hardware to exploit both major collections of games software. "We view the PC and Android as two very big open gaming ecosystems that have not been served with a gaming device," he said.
There are obvious risks. Nvidia will have to compete with entrenched makers of games hardware, such as Sony Corp. 6758.TO -1.14% and Nintendo Co., 7974.OK -2.51% which both offer portable game systems. Some companies in the games and mobile-device market also are potential customers for Nvidia chips; the company risks angering them by encroaching on their turf.
Even so, some other routes for selling games chips now seem blocked, Moor's Mr. Moorhead said. Though Nvidia once supplied chips for games consoles, most of that business has lately gone to rival Advanced Micro Devices Inc. AMD +3.09% Some makers of mobile devices, like Apple Inc., AAPL -0.59% have chosen to design their own chips.
Perhaps the biggest question mark is whether players will find streamed PC games as responsive as those played sitting at a computer, a factor likely to weigh heavily with gaming enthusiasts. Gamers are very sensitive to any delays, particularly in shooting games, where hiccups can aid opponents.
"Lag time will be very, very important," Mr. Moorhead said.
During the Nvidia event here, a company demonstrator struggled to get the device to begin streaming the Windows games. But the Shield device finally worked, showing two sophisticated games that normally only work on high-end personal computers.
"We have a little more work on Shield" to do, Mr. Huang conceded.
LAS VEGAS—Nvidia Corp., a well-known seller of components for videogame hardware, plans to change its strategy by marketing a gaming gadget of its own directly to consumers.
The Silicon Valley company disclosed plans for an unusual portable device that can run its own games software and wirelessly stream games running on powerful home computers. It can also wirelessly send the game images to be viewed on high-definition TVs in addition to its own small screen.
Nvidia didn't disclose the price of the device or say when it would be available, but the Sunday night announcement at this year's Consumer Electronics Show struck some observers as one of the show's first real surprises.
"I have to say I was fairly stunned," said Patrick Moorhead, a market watcher at Moor Insights & Strategy, after being briefed on the plan.
Mr. Moorhead said Nvidia appeared to be following the technology industry's recent "verticalization" trend, in which companies are making components or software as well as end products that use them. Microsoft Corp. MSFT -0.19% recently adopted that approach with its first-ever computer, the Surface tablet.
Jen-Hsun Huang, Nvidia's chief executive, unveiled the device-development effort, called Project Shield, at the end of a glitzy event at the Palms Hotel here. It was preceded by a series of other announcements, including a technology development effort to allow other companies to stream games over the Internet to consumers.
Nvidia, of Santa Clara, Calif., is best known for graphics chips and circuit boards that render visual effects in videogames and other personal-computer software. It more recently branched out into microprocessors for tablet computers and smartphones, combining graphics circuitry with calculating engines based on technology licensed from ARM Holdings PLC. ARM.LN -0.31%
The Project Shield device runs on a new version of that Tegra processor line that is also being announced at the CES show. The gadget resembles a controller familiar to users of game consoles, with the addition of a five-inch display screen and built-in audio capability.
Ujesh Desai, Nvidia's vice president of corporate marketing, cited two primary inspirations for the product. First, many games have been developed for smartphones and other devices that run Google Inc.'s GOOG -0.44% Android operating system, but those gadgets don't have the control buttons that gamers favor for fast action.
Secondly, more complex games software has been developed over the years for PCs running Windows. To enjoy these programs, however, users typically sit next to large tower-style computers or heavy, beefed-up laptops.
By streaming the action to the new device using a variant of Wi-Fi technology, a user could play those games from bed or other more-comfortable locations, Mr. Desai said.
The key to Nvida's strategy, he stressed, is the ability of a single piece of hardware to exploit both major collections of games software. "We view the PC and Android as two very big open gaming ecosystems that have not been served with a gaming device," he said.
There are obvious risks. Nvidia will have to compete with entrenched makers of games hardware, such as Sony Corp. 6758.TO -1.14% and Nintendo Co., 7974.OK -2.51% which both offer portable game systems. Some companies in the games and mobile-device market also are potential customers for Nvidia chips; the company risks angering them by encroaching on their turf.
Even so, some other routes for selling games chips now seem blocked, Moor's Mr. Moorhead said. Though Nvidia once supplied chips for games consoles, most of that business has lately gone to rival Advanced Micro Devices Inc. AMD +3.09% Some makers of mobile devices, like Apple Inc., AAPL -0.59% have chosen to design their own chips.
Perhaps the biggest question mark is whether players will find streamed PC games as responsive as those played sitting at a computer, a factor likely to weigh heavily with gaming enthusiasts. Gamers are very sensitive to any delays, particularly in shooting games, where hiccups can aid opponents.
"Lag time will be very, very important," Mr. Moorhead said.
During the Nvidia event here, a company demonstrator struggled to get the device to begin streaming the Windows games. But the Shield device finally worked, showing two sophisticated games that normally only work on high-end personal computers.
"We have a little more work on Shield" to do, Mr. Huang conceded.
