Having last week failed to meet its second quarter profit target (CI No 3,449), San Jose PC graphics accelerator maker Diamond Multimedia Systems Inc has formed a strategic alliance with 3D audio chip specialist Aureal Semiconductor Inc. The move is a continuance of the company’s pursuit of PC audio leader Creative Labs Inc and its SoundBlaster cards, whose cards are still based on the PC ISA bus, not the newer PCI standard. Aureal’s technology also supports more data streams than SoundBlaster. Under the terms of the agreement, the companies will co-develop and market next generation PC audio systems, aimed at the PC consumer and games market. Last week, Diamond Multimedia reported a second quarter loss of $8.3m, and blamed its disappointing performance on its Monster Sound PCI card. Although the company estimates that around 60% of the top selling PC games now offer support for its latest Monster card, which is based on 3Dfx Interactive Inc’s Voodoo2 chipset, sales fell short of targets towards the end of the quarter, leaving a $20m revenue deficit. Now Diamond is to use Aureal’s A3D Vortex audio technology exclusively in products in the Monster range. The company would not reveal when the products will become available. Aureal went further into the red with net losses of $17.7m for last its fiscal year, up from losses of $17m at the same time last year (CI No 3,359).
