Strategy at Nvidia; The Competition

The deeper reality was that Nvidia's carefully crafted fast-release cycle induced 3dfx's less coordinated responses. 

For Nvidia's strategy in 3-D graphics to work, other firms would have to fall by the wayside, not being able to keep up.  To a large extent, that is exactly what happened.

Whenever a company succeeds greatly there is a complementary story of impeded competitive response.  Sometimes the impediment is the innovator's patent or similar protection, but more often it is an unwillingness or inability to replicate the innovator's policies.  Nvidia bet that it could rapidly charge up the graphics pipeline, but it also be that key rivals would not be able to replicate its fast release cycle.  Rival 3dfx followed spurious advice from Wall Street and the marketing instincts of a new CEO, setting out after the mass market.  Spreading its resources too thin, it attempted to compensate by stretching the goals for its next high-performance chip beyond the competencies of its development process.  

3dfx closed its doors in the last months of 2000, selling its patents, brands, and inventory to Nvidia where many of its talented engineers ended up working.   A surface reading of history makes it look like 3dfx did itself in with too many changes of direction.  The deeper reality was that Nvidia's carefully crafted fast-release cycle induced 3dfx's less coordinated responses. 

ACTION POINT: As Hannibal did to Rome at Cannae, Nvidia enticed its rival into overreaching.