Physics Still in Turmoil

NVIDIA just announced they are purchasing AGEIA. Has this been the plan for the PhysX provider all along or did the purchase of Havok by Intel push their hand? Come read our analysis of this surprise addition to today’s news.

Last year Intel threw a giant wrench into the hardware and software world by buying Havok.  Right before that purchase Havok was busily working with both AMD and NVIDIA on the Havok FX physics engine, which would includes GPU physics support.  When Intel bought up Havok, all work on that particular feature apparently was stopped.  A year and a half ago there was great excitement about GPU physics, but that is obviously not the case now.

During all the talk of Havok FX, Ageia was releasing its standalone physics accelerator and the supporting software.  They also offered a 3rd party physics software platform that has been adopted by quite a few games out there.  Havok is still the dominant entity in that marketplace, but Ageia has chopped its way through the ranks and is probably the second largest developer of software physics.

There has been a great amount of talk as of late about Ageia, as it was no secret that the company has not exactly been an overnight success.  With Intel’s acquisition of Havok, it also became the center of attention since it was the only other available physics software supplier to developers.  It also has some interesting IP with its hardware physics accelerator.  The big rumor was that AMD was going to bite the bullet and purchase Ageia.

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BFG Ageia PhysX card

The problem with AMD acquiring Ageia essentially boiled down to money.  The rumored asking price for Ageia was supposedly around $150 million US (give or take).  The big problem for AMD about purchasing Ageia was that AMD has been losing money hand over foot, and $150 million is not exactly pocket change for a company that announced a loss of $1.77 billion the previous quarter.  Though AMD has around $1.9 billion in cash, $150 million is not exactly chump change.  Especially when put in the perspective that AMD expects to lose more money in the next two quarters.

This situation has likely driven the price of Ageia up a bit more than expected, again considering that they are the last major independent physics software developer.  There were quite a few rumors that the company has not made any significant profits in its operations and was potentially looking for a buyer.  It was only a matter of time before someone else made an offer for the company and is willing to take over the hardware and software development powering the Ageia PhysX architecture.

The Short Term

NVIDIA likely will not make major changes initially with Ageia and its products.  This means that the hardware accelerators will still be on sale, and offered by both Asus and BFG at this time.  We may see a few other NVIDIA partners pick up card designs though and market them for themselves.  If there is one thing that NVIDIA is pretty good at, it is marketing.  With the company now in charge of marketing standalone physics accelerators, we can bet that we will start hearing about it much more aggressively now.

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Will the dedicate PPU continue or be integrated?

NVIDIA’s developer relations are incredibly strong, and there are some very talented programmers involved in the program.  Leveraging some of that programming power towards PhysX would likely be very helpful.  NVIDIA would be much more aggressive in selling the underlying physics software to its gaming partners as well.  Within the next few months we would see a lot more support for Ageia, perhaps not so much in how well the software works, but rather how many more game developers will adopt it and support it.

Ageia will likely start out as its own division within NVIDIA, but perhaps over time they will migrate it under one of the broader divisions.  Details are sketchy at the moment, but until NVIDIA is able to dig deeper into the architecture of the Ageia products, they will wait to see where it would best be used.  With NVIDIA looking to release more general processors, the technology that Ageia brings could fit very well in with their future plans.

The Longer Term

NVIDIA was very excited about GPU based physics, and they will likely pursue that avenue again.  Not only will they support standalone physics cards, but they will likely integrate GPU physics into the PhysX framework.  This may take a year or so to accomplish, but you can bet that NVIDIA will do that.  It is highly unlikely that NVIDIA would open up development so that AMD GPUs could also assist in physics acceleration.

It does not mean that it will stop there.  With a robust chipset division, NVIDIA could decide to integrate physics hardware into their chipsets.  We must also consider that NVIDIA could very well leverage GPU physics on their integrated graphics parts.  Last month we were surprised to see that NVIDIA was using an integrated graphics part for their upcoming high end AMD and Intel motherboards.  If NVIDIA is able to add that functionality to the PhysX engine, then they will likely have a significant installed base of products that can leverage those extra features offered by the physics engine.

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Upcoming NVIDIA GeForce 8200 integrated graphics chipset

AMD is certainly looking left out in the cold by this announcement.  With Intel pushing Havok and likely will utilize that to support their Larabee, and now NVIDIA pushing PhysX (both hardware and software), it is hard to see where AMD might go.  Their overall fate is in the hands of developers.  Fortunately for AMD, developers are still interested in the “lowest common denominator” when designing a game for widespread hardware.  Considering that all three major consoles do not support any kind of hardware accelerated physics, it is also quite likely that most developers will stick with more general software support.  Just as with the Ghost Recon series and UT3, the accelerated content is not widely used, so there is no great push to jump on the accelerated bandwagon.

It had to happen sometime, especially since Intel started it all with their purchase of Havok.  I am sure most in the industry would rather have had the physics software providers stay independent, or at least be bought up by another software company with no hardware interests of its own.  Since Intel started down that particular road, the countdown was seemingly begun for Ageia to be bought up as well.  It is not particularly surprising that Ageia tried to hold that off as long as possible, but when considering how poorly the standalone Ageia cards have sold, it is no surprise that they would be willing to sell and to throw in the towel.

Update: Here is the official PR below with more commentary on the details it adds:

SANTA CLARA, CA — FEBRUARY 4, 2008—NVIDIA (Nasdaq: NVDA), the world leader in visual computing technologies and the inventor of the GPU, today announced that it has signed a definitive agreement to acquire AGEIA Technologies, Inc., the industry leader in gaming physics technology. AGEIA’s PhysX software is widely adopted with more than 140 PhysX-based games shipping or in development on Sony Playstation3, Microsoft XBOX 360, Nintendo Wii and Gaming PCs. AGEIA physics software is pervasive with over 10,000 registered and active users of the PhysX SDK.

“The AGEIA team is world class, and is passionate about the same thing we are—creating the most amazing and captivating game experiences,” stated Jen-Hsun Huang, president and CEO of NVIDIA. “By combining the teams that created the world’s most pervasive GPU and physics engine brands, we can now bring GeForce®-accelerated PhysX to hundreds of millions of gamers around the world.”

“NVIDIA is the perfect fit for us. They have the world’s best parallel computing technology and are the thought leaders in GPUs and gaming. We are united by a common culture based on a passion for innovating and driving the consumer experience,” said Manju Hegde, co-founder and CEO of AGEIA.

Like graphics, physics processing is made up of millions of parallel computations. The NVIDIA® GeForce® 8800GT GPU, with its 128 processors, can process parallel applications up to two orders of magnitude faster than a dual or quad-core CPU.

“The computer industry is moving towards a heterogeneous computing model, combining a flexible CPU and a massively parallel processor like the GPU to perform computationally intensive applications like real-time computer graphics,” continued Mr. Huang. “NVIDIA’s CUDA™ technology, which is rapidly becoming the most pervasive parallel programming environment in history, broadens the parallel processing world to hundreds of applications desperate for a giant step in computational performance. Applications such as physics, computer vision, and video/image processing are enabled through CUDA and heterogeneous computing.”

AGEIA was founded in 2002 and has offices in Santa Clara, CA; St. Louis, MO; Zurich, Switzerland; and Beijing, China.

The acquisition remains subject to customary closing conditions.

More details about the acquisition will be provided during NVIDIA’s quarterly conference call, to be held on Wednesday, February 13, 2008 at 2:00 PM, Pacific Time. The Company’s prepared remarks will be followed by a question and answer period, which will be limited to questions from financial analysts and institutional investors. To listen to the conference call, please dial 212-231-2901; no password is required. The conference call will also be webcast live (listen-only mode) at the following Web sites: and

Edit:  I received the PR after I had finished the article, but it basically confirms that NVIDIA will be aggressively pursuing GPU physics using the PhysX framework.  We can also safely assume that NVIDIA will be VERY interested in leveraging their integrated GPUs for hardware physics work.  Again, we will be seeing the upcoming AMD based motherboards all featuring the GeForce 8200 integrated part.  By the time the GPU physics portion of PhysX will be rolled out, there will be a significant installed base of nForce products sporting GeForce 8200 IGPs.


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