A messy, year-old legal tussle between 3Dfx Interactive Inc, Sega Enterprises Ltd, NEC Corp and VideoLogic Plc was resolved yesterday. The suit arose from a contract signed between Sega and San Jose, California-based graphics chip company 3Dfx back in March 1997, which led to 3Dfx starting development on a 3D media processor for Sega’s next generation of home games console. The deal generated $1.8m in revenues for 3Dfx during the nine months ending September 30, 1997, or 8% of the company’s income. But Sega terminated the deal in July 1997, subsequently turning to NEC Corp and UK graphics firm Videologic to provide graphics technology for the console, codenamed Dreamcast. 3Dfx sued Sega for breach of contract in September (CI No 3,281), and later added NEC and Videologic to the suit, alleging that Videologic had induced Sega to break the agreement (CI No 3,281). It was asking for $105m in damages. Although terms of the agreement went undisclosed, 3Dfx are rumored to have received substantial compensation over the settlement. Sega’s Dreamcast console – with Videologic chip – is still a long way from reaching the market. It is expected to appear first in Japan at the end of this year, but the US roll-out could be up to a year later.
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