Xbox partners kiss and make up

The price dispute is over – MS and NVIDIA have settled their differences. So now they can back to building them boxes.

The arbitration between Microsoft and NVIDIA on the pricing of the Xbox GPU and MCP has come to and end, according to a press release yesterday from NVIDIA. Both companies have agreed to collaborate on future cost reductions, and the renewed focus on improving the Xbox platform.

NVIDIA CEO Jen-Hsun Huang mentioned early in the dispute that the company would either find itself receiving more revenue for the GPUs, or selling the chips at a loss. Which of these events transpired, we're not sure, but obviously it's come to some sort of 'acceptable' agreement with Microsoft.

Could this resolution have anything to do with the less-than-amazing performance of GeForce FX? With recent rumours (and that's all they are at the moment) that NVIDIA will only producing 100,000 NV30 chips, the company may look to accelerate production of the NV31, NV34 and NV35. A quick release of a new mid-range (and probably a high-range) chip would help the company to keep ATI away from its market share.

However, what's more likely is that NVIDIA is banking on its superfine driver development team to squeeze ever last pixel out of the FX. Fancy pants drivers have served the company well in the past, and we've got no reason to think that they won't now.