How much did Nvidia pay Origin PC to drop AMD?

Updated 2x: Inept marketing tactics by unethical players part XVII

Nvidia world 87x49 How much did Nvidia pay Origin PC to drop AMD?If you were wondering how sleazy Nvidia will get when the chips are down, Origin PC’s ‘dumping’ of AMD GPUs answers that question. Nvidia might have had a chance to pull this off however if the pretense wasn’t so transparent and the players so incompetent.

The short story is, as first reported by Engadget, that Origin PC is dumping AMD GPUs from their gaming boxes. Why? According to Origin PC, “This decision was based on a combination of many factors including customer experiences, GPU performance/drivers/stability, and requests from our support staff.” Nvidia’s statement goes on to extol the virtues  of Nvidia products for no apparent reason. Any guesses why this ‘revelation’ might have occurred?

If you said Origin PC has some technical problem with AMD you would be wrong. If you guessed that Nvidia paid them off, you would be right on the money. Lets dive in to the matter with a little help from a bunch of sources we spent the last few hours calling, they had some quite illuminating insights, the first of which is relative size. How big, and we use that word loosely, is Origin PC? Sources say they sell about 5000 units a year or roughly 1/60000 of the 300 million units a year PC market. comparatively there are bigger zits on an average teenager’s….. I’ll be nice.

Before we go too deeply in to this, we have a few questions you should ask yourself. First is how often does a pipsqueak niche PC vendor decide to not carry a line of products? All the time it turns out, but you have to ask if the Nvidia sponsored Battlebox that debuted 3 days ago had something to do with it. Origin PC sure got a lot of mileage out of Nvidia promoting this box over all the other OEMs. Coincidence right? Sure, has to be, and OEMs do drop product lines all the time. That said you might want to ask yourself how many OEMs put out press releases and call web sites when they drop a product line, that one is a bit trickier to explain away.

Even if it is all just a strictly technical decision that Origin PC put out a press release for because of… ummm.. no clue why but assume it is legit please. OK then you want to ask yourself if AMD is so awful to deal with and has such miserable drivers and customer experiences, why is Origin still fully engaged with AMD on the CPU side? Origin PC seems to have only dumped AMD on the GPU side, something that makes zero sense when you consider that CPUs and mobos need more driver support than GPUs. And then there is the gaming performance disparity between AMD and Intel CPUs, AMD is laughably behind there with possibly worse driver support. This for some reason, it is probably technical… I hope it is anyway, doesn’t seem to bother Origin PC only the GPU side of AMD does. Not sure how this logically parses but lets assume it does too.

So Origin PC just got fed up with AMD GPUs, not CPUs, decided not to carry them any more, and put out a release to tell the world of this minor product change. PCWorld asked them about it and about being paid off to which Origin PC CEO Kevin Wasielewski gave the following non-denial. ”Not sure who told you that, but I would definitely like to comment on that because we absolutely do not want anyone to get that impression.” You can understand why he would not want people to get the impression that Origin PC denies their customers choice for payoffs, that would put him in a vendor category along with used car vendors, sub-prime mortgage vendors, and Congrescritters.

You can parse the statement, and the rest of it in two very different ways almost like it was written to be a purposeful non-denial. The first is that he is caught with his pants down and really does not want people to know how sleazy he would be if it was proven true. He specifically doesn’t say that Nvidia didn’t pay him, just that Nvidia didn’t give him anything exclusive. If anyone else said yes to the same deal, this would be correct. The other way to parse this is that it is untrue, but given the way the topic was danced about rather than Kevin just saying, “No, Nvidia did not pay us off“, I know which side I think is more likely.

So with this in mind SemiAccurate did some calling around and the answers probably won’t surprise you. Multiple sources all said the same thing, a certain Nvidia marketing person, they all called him Bryan for no particular reason, has been calling around to all the Tier 3++ gaming PC makers offering large dollops of funding to dump AMD GPUs or so the story goes. Multiple SemiAccurate sources say this number is in the six digit range, several gave exact figures but asked us not to publish them. This isn’t direct cash payments but more towards MDF funding, product discounts, and other quasi-legal kickbacks that are directly tied to and based on sales volume of AMD GPUs. More details were given to SemiAccurate but we were asked not to publish the exact terms to protect our sources.

It wasn’t just a payoff to promote Nvidia products, it was a payoff to cut out AMD period and bang the drum about it. The fact that the funding was directly proportional to Origin PC’s AMD revenue leaves no doubt as to the intent of Nvidia’s payout and as Mr Wasielewski explained it, “because we absolutely do not want anyone to get that impression“. You understand why a legitimate vendor would not want that impression to get out, especially if it were true.

Another part of the non-denial given to PCWorld was, “We are aware that Nvidia works with other system builders along with ORIGIN PC and Nvidia is not providing anything exclusively to ORIGIN PC.” This statement is absolutely true but it isn’t a denial of what PCWorld calls payola, SemiAccurate calls bribes, and others are not so polite about. Nvidia gives cash to many companies to cut out competition, and doing so in an incompetent and ham-handed way is a time-honored tradition in Santa Clara.

There were other terms of the deal not directly involving direct or indirect funding that in theory will give Origin PC a leg up on other Tier 3++ vendors. It would give them a leg up anyway if just about everyone under the sun wasn’t given the same deal but don’t tell Origin PC they were played, I don’t think they are aware of it. SemiAccurate knows two other vendors that already have more than what Origin PC was offered.  But to be fair they are far larger that Origin PC.

Why would Nvidia PR/Marketing stoop so low in such a transparent effort to besmirch the competition? Incompetence is only the root, desperation is the cause. The Battlebox mentioned above was meant as a counter to AMD’s Hawaii briefing last week and in few weeks Nvidia is flying the press to Canada to brief them on 4K video and drivers. Why are they doing this? Probably because AMD is about to launch the new R7/R9 cards in the same time frame and Nvidia has literally no answer until Q4/2014. Note that is not a typo, we did not mean Q4/2013, it is really over a year until they have a GK104 replacement.

Updated Oct 5, 2013 @ 5:55pm: Typo, 2104 changed to 2014, and yes that was a typo. Doh!

Nvidia is about to be pounded silly in the GPU space from notebook losses to channel sales, AMD has a full product refresh and Nvidia has no new silicon for several quarters, just more rebrands. On the gaming side AMD CPUs are powering two of the next three consoles and their GPUs are in all three. AMD is the development target for ALL next-gen games, Nvidia is totally out of the enthusiast market, game over and they know it. PC makers won’t even play the usual marketing games, the cost of doing an engine only for Nvidia based PCs is high enough to be a non-starter.

With no console synergies, no XBox, no Playstation 4, no Wii U, and only Shield to ‘brag’ about, how do you counter a competitor’s superior product? Find a credible OEM and pay them off perhaps. In this case Nvidia couldn’t find one, so in a similar fashion to their press manipulation tactics they went down the ladder until someone bought in. Battlebox? Sure. Unspecified MDF and assorted monies? Sure. Press release? Sure. Send it to a bunch of gullible sites that you know won’t bother to question motives of an extremely specious statement? Check.

If one was really cynical they might suspect that this is nothing more than a desperate ploy to bump the stock up a bit before it gets hammered early next week for reasons we can’t talk about yet. Luckily we aren’t that cynical so we will take the facts as presented. Origin PC decided that for purely technical reasons, nothing to do with the Nvidia plastered Battlebox, they were going to dump AMD GPUs but not the CPUs. And they put out a press release on the topic to sites they knew wouldn’t question anything. So far so… wince… believable. And all the companies that said they received ham-handed offers from Nvidia are just making things up too, darn them and their evil conspiracies.

Everything is above-board here, just read a lot more in to Origin PC’s non-denials of payola. They don’t want word of this to get out so keep it quiet please, both Nvidia and Origin PC would look really sleazy if the truth came out. Other than the terms of the deal that were shown to SemiAccurate, the borderline bizarre behavior of the players, and the absolute non-denials by any of those involved, there is no reason to think that this is in fact a rather inept attempt by Nvidia to pay a Tier 3++ pipsqueak of an OEM to bang a drum for PR reasons. Pathetic.S|A

Update 2 Oct 7 @ 10:45pm: There is an update to this story here.

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 How much did Nvidia pay Origin PC to drop AMD?

Charlie Demerjian

Roving engine of chaos and snide remarks at SemiAccurate
Charlie Demerjian is the founder of Stone Arch Networking Services and SemiAccurate.com. SemiAccurate.com is a technology news site; addressing hardware design, software selection, customization, securing and maintenance, with over one million views per month. He is a technologist and analyst specializing in semiconductors, system and network architecture. As head writer of SemiAccurate.com, he regularly advises writers, analysts, and industry executives on technical matters and long lead industry trends. Charlie is also a council member with Gerson Lehman Group.