A few things to keep in mind about SGI:
1) A Silicon Valley company. Not unusual for them to
be TOO far ahead of their time. CAD was, at least,
a high-margin business that could support living as
much as a decade ahead of the consumer market.
2) SGI's real market value was always small compared to
the game companies -- they were in a niche market
(or a few of them): engineering workstations. There,
the goal is to actually make money on machines built.
3) The game companies really don't make money on
the built units -- those are loss-leaders. They make it
up on the games, if they can (or give up and just do
games, as Sega is doing.) This is a rough, rough
business with huge capital requirements and razor-
thin margins.
SGI has done some some dumb things, and missed
some opportunities, certainly. But not going for the game-
console market wasn't necessarily a real mistake. Even
Microsoft's Xbox is now giving Microsoft some second
thoughts - "inventory risk," to name just one, from the
financial press today. Microsoft going up against Sony
always struck me as slightly crazy -- the only other Microsoft
hardware product I've seen is their mouse, a gadget
with only a few moving parts, fitting into a box about
the size of what they already package CDROMs and
user guides in. Microsoft targets high-end silicon, but has
never, to my knowledge, minted any -- until Xbox, which
may yet get axed.
Could SGI still have made a go of it by licensing their
technology to game makers? I guess it's possible, but
having worked for engineering workstation/server
vendors in the past, I really don't think they had the
requisite engineering culture. The tendency there was
to apply brute hardware force to problems, and damn
the cost, because cost was not much of a sales objection
for their engineering/design customer base. Very smart,
for that market. Cf. game hackers, who, at the time,
considered anyone who needed to resort to floating point
arithmetic a hopeless wimp, and anybody who could bum
another unneeded chip out of a board design a company
hero. That was *also* smart -- for *that* market.
Of course, SGI's time came: we all now have desktop
computers that whack the pants off late-80s Iris boxes.
What was a Lexus is now a Hyundai. By Valley standards,
though, SGI has actually had a good run.
-michael turner
leap@gol.com
[snip]
Silicon Graphics (remember them) could have been a major player in the
gaming market,
but lost their chance because they though the market was going to be
completely high
end CAD applications -
[EXTRACT] "I worked at SGI [Silicon Graphics] during the golden years, on
big monster machines that did amazing stuff," Bharat Sastri told the
conference audience. "But some of us arrived at the conclusion that the
future of 3-D was not in CAD, but in entertainment.
"The popular wisdom around the company was, "'Who's going to play games?'"
he related. "'And why would they need 3-D?' ... Of course, 10 years later,
companies like Sony and Sega and Nintendo have a combined market cap that's
10X of SGI's.
"To me, that's a classic example of drinking your own bath water and not
realizing it. SGI had the technology; they were 10 years ahead of everybody.
But that simple - what I call arrogance, you know - and denial of the
obvious, cost the company just a huge, huge opportunity," Sastri concluded.
Graham
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Received on Sat Jul 21 13:26:49 2001