Microsoft and Nvidia settle Xbox chip pricing dispute

Microsoft and Nvidia settle Xbox chip pricing dispute
SANTA CLARA, Calif. -- Graphics chip vendor Nvidia Corp. and Microsoft Corp. have settled their differences over the pricing of the graphics, audio and networking chips that Nvidia supplies for the X-box games console, the companies said today (February 6, 2003).

No details of the settlement were given but NVidia said that further details would be given during its quarterly analysts' conference call to be held on February 13.

The dispute flared up in April 2002 as Microsoft insisted on paying less for chipsets it had bought from NVidia (see April 29 2002 story).

In addition to resolving this pricing dispute, the two companies have agreed to collaborate on future cost reductions for the Xbox.

"This is a win for both companies, and we couldn't be more delighted with the results," said Jen-Hsun Huang, president and chief executive officer at Nvidia, in a statement. "Nvidia and Microsoft can now take our partnership to the next level and focus our substantial resources to maximize the full potential of Xbox game console."