Graphics chip start-up ArtX Inc is to provide Nintendo Co Ltd with chip and graphics technology for its next generation games consoles, the company revealed yesterday. On the face of it, that could be very bad news for Silicon Graphics Inc’s MIPS Technologies Inc subsidiary, currently in the process of closing its initial public offering. MIPS is the supplier of customized R4300i 64-bit RISC processors for Nintendo’s current N64 line of games machines. However, the deal was accompanied by the resolution of a lawsuit that Silicon Graphics had filed against ArtX back in April. MIPS is in its quiet period, between the filing of its IPO on April 22nd and its completion, expected next month. But an official statement said that Artex, MIPS, Silicon Graphics and Nintendo had all signed a memorandum of understanding, leading to a suspension of the lawsuit while mutually beneficial agreements are being negotiated regarding future business and licenses. Although Nintendo has not yet publicly announced the ArtX deal, it has begun referring to it at industry events such as this week’s E3 show in Atlanta, Georgia. And yesterday, Tim Van Hook, chief technology officer with Palo Alto, California-based ArtX, confirmed that his company had begun working on the contract this Spring. Nintendo’s N64 game systems were launched back in September 1996 (CI No 2,801), but despite initial promise, the N64 is lagging behind the market leading Sony Playstation and even the struggling Sega Saturn machine in Japanese sales. Nevertheless, Nintendo shipments worldwide accounted for a substantial proportion of the 48m RISC chips the unit shipped last year, as much as 75% in unit terms, according to some reports. MIPS has often based its claim to have the highest selling RISC chip on the deal. Sony uses 32-bit MIPS chips for its Playstation range, but hasn’t yet committed to use the 64-bit versions. Whatever the position, shipments and revenues would not be affected in the short term, however, as Nintendo is still planning to launch a MIPS-based 64DD follow on to the N64 before its next generation machine is ready to come to market. And MIPS is understood to have not included potential business from next-generation Nintendo machines in its IPO market projections. ArtX, which has 30 staff, was formed in September 1997 by a group of employees from Silicon Graphics itself, including Van Hook, one of the key technologists working on the N64 technology, and Wei Yen, a senior vice president on the Nintendo project at MIPS, and now chief executive of ArtX. Both men and the company had been named in the Silicon Graphics lawsuit. The original MIPS- Nintendo deal is said to have been originally tied to the Magic Carpet chip set that Silicon Graphics and MIPS were developing for the set top box market back in 1995 (CI No 2,655). That project was subsequently canceled, perhaps souring the relationship between the two. More recently, Silicon Graphics announced it would use Intel processors for future products, putting its RISC commitments in doubt. The MIPS IPO, intended to counteract that impression, was filed on April 22, and was expected to close sometime next month.
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