Omid took some time to meander and wander through the Game Developer Conference in San Jose last week. In the process he looks at the tenuous position of Xbox, the opportunities for PC gamers, and riffs on the future of online gamelets. Now, let me put forward a hypothesis, which in strictest terms it won't be, and furthermore, let me refuse to take any arguments. In other words, Nvidia's mainstay, the PC business, didn't have to take any hits.
Consoles go down in prices, but there is no upgrade, or aftermarket for graphics.
In addition, costs drop very rapidly when console vendors have to move boxes because, people ain't buying, there are other consoles coming out, and so on. So, now we have the cost of the controller, the drive, the hard disk, the Ethernet link, audio, and graphics, and of course, memory. Okay, it might be easy money. They have, in effect, a Tier One OEM design win, and it's going to be non-negotiable for five or six years. Sort of like having Compaq or Dell beholden to you.