GAME DEVELOPER • JUNE/JULY 1995 Microsoft’s Softimage is suddenly challenged by Silicon Graphics’s merger with Alias and Wavefront. What can game developers expect from these two?

3D Graphics Goliaths Square Off

Yesterday, as I was cleaning out a bookshelf in our office, I came upon an issue of Byte magazine from Aug., 1987. Although I was throwing everything away, I had an urge to flip through its pages—there’s something compelling about a computer magazine that’s over seven years old. Volume 12, number 9 of Byte may only have been 49 in dog-years, but it was much older in computer-years. I couldn’t believe it—ads for 386 16Mhz computers selling for $4,400, 9600-baud modems for $1,000, and articles about EGA graphics. It’s amazing we got through those rough times. (Some know-it-all will read this in 2002 and say the same thing about 1995, no doubt.)

One article that caught my eye focused on the technique of transferring cartoon-quality film (a clip from Disney’s Snow White and the Seven Dwarves) into digitized EGA display. Yeeeesshhh, the final result looked horrible. So, maybe the time wasn’t right back then for creating digital media from live footage. But, like a rolling snowball picking up size and speed, the graphics industry is maturing to the point where there’s not too much anyone can’t do at an affordable price. Microsoft and Silicon Graphics (SGI), thanks to recent acquisitions and mergers, are helping to fuel this momentum.

Competitive Partners

The relationship between Microsoft and Silicon Graphics has changed enormously over the past 12 months. Silicon Graphics is the dominant player in the graphics
workstation market, and Microsoft is the giant in the PC software market.

However, when Microsoft acquired Softimage last summer, Microsoft gained a powerful suite of IRIX-based animation, editing, compositing, and cel animation tools. It instantly became a key partner of SGI. Eight months later—last February—SGI merged with Alias and Wavefront, two companies that compete against Softimage on the SGI platform. How have these developments changed the relationship between Silicon Graphics and Microsoft? More importantly, how does it affect their customers?

I spoke with Andrew Wright, group product manager of advanced authoring tools for Microsoft/Softimage, and Dave Larson, director of marketing for Silicon Studios, a wholly owned subsidiary of Silicon Graphics, about the actions their companies have taken recently in the digital entertainment industry.

The most recent event, Silicon Graphics’ merger with Alias and Wavefront, achieved two objectives for SGI, according to Larson.

“We felt that by merging with Alias and Wavefront,” Larson explained, “we could get two of the most important groups of engineers together with our engineers and accomplish two things. [The first objective] is to drive the development of our 3D software environment… [Second,] we don’t have expertise in entertainment and industrial [software] markets at the customer level like we do with hardware. We’re getting a sales force that knows the customers really well at the application level, a sales force that has a much greater depth of knowledge.”

What was Wright’s reaction to the SGI merger?

“Surprise,” he said. “From [Microsoft’s] perspective, it actually puts us in a stronger position because we feel that for our customers a cross-platform solution is important. Where they want the performance of SGI, we provide it, where they want the price-to-performance ratio and openness of a Windows NT system we’ll provide that to them. We’ll be the only high-end 3D animation vendor that’s effectively able to execute a crossplatform strategy.”

I sensed no edginess from either Wright or Larson about the relationship between Microsoft and SGI, and both played up the positive aspects of their new product lines. Wright stressed the fact that many of SGI’s partners, not just Microsoft, were now competitors, but that it wouldn’t make sense for SGI to consider them as such: “Yes, we are a competitor to [Silicon Graphics], but they’re also a competitor to a number of their other ISVs [independent software vendors]. Companies like Side Effects, Discreet Logic, Avid… One thing I can say absolutely outright is that if SGI loses their third-party applications as a result of this merger, they’re dead in the water. I think they’ve almost got to overcompensate to make sure that their third party ISVs are treated fairly,” Wright commented.

Dave Larson adamantly agreed.

“We’re going to treat [Microsoft] as we do a whole category of partners who will get early access information, and it’s based on business parameters. These guys, as well as other 3D vendors, are still selling SGI software and we’re going to do whatever we can to make sure they continue to do so. That’s our business.”

Softimage off the SGI Platform?

Upon acquiring Softimage last year, Microsoft stated its intention to port the Softimage tools over to Windows NT. I asked Wright whether Microsoft had plans to pull Softimage products off the SGI platform at a later date and focus exclusively on its own operating system implementation.

“No. One of the key reasons Microsoft bought Softimage is that Softimage had a tremendous presence in the community that was producing the world’s best content. ILM [Industrial Light and Magic]. Greenberg. Rocket Science. For those companies, the SGI platform is absolutely critical because they need that level of performance… We think Windows NT and the associated hardware developments are going to provide a very price-attractive alternative. But in no way is that going to put SGI out of business. They are going to continue to do very well and we need to be there.”

Microsoft looks at its partner/competitor relationship with SGI in the same light as its association with Apple.

“We’ll continue to invest in SGI,” Wright stated. “It’s very similar to our situation on the Macintosh. Microsoft makes a lot of money on the Macintosh and it’s a very vital platform for us at the application level, even though we don’t own the operating system. The fact that we’ve got applications on Windows 95 as well does not in any way affect our investment in the Macintosh platform.”

Wright sees Silicon Graphics remaining the superior platform for highend digital video and three-dimensional animation over Windows NT, just as the Macintosh held its position as the superior platform for graphic design when Windows 3.0 was introduced.

“Macintosh had a very strong position in graphic design. Windows came in and everybody thought that it was going to completely take over the market. As a result, companies like Aldus and Adobe developed their applications first on Windows and second on Macintosh. But they realized over time that the Mac wasn’t going to go away… We think a similar thing is going to happen in the SGI world,” Wright said.

Porting Softimage Products to Windows NT

Upon acquiring Softimage, Microsoft announced that it would port the company’s toolset to Windows NT. Wright indicated that Softimage products would be available on Windows NT this year, but he declined to be more specific, fearing that divulging an estimated date could raise false hopes.

I wanted to know what strengths Windows NT could offer over the SGI platform to game developers. After all, SGI has been targeting this market for years and has optimized its hardware for high-end graphics and animation. Wright responded: “We think that the Windows NT platform will offer very attractive price-to-performance ratio in the range of performance that it delivers. We also feel that for people who have PC-based networks, for example developers who are using [Autodesk’s] 3D Studio, it will be important for them to run a high-quality 3D product in the same environment that they’re running their other tools. I think that’s going to be key to the games development area.”

Downward Pressure on Prices

In addition to announcing the porting of Softimage tools over to Windows NT, Microsoft announced in January that it was slashing the price of all Softimage software by up to 50%. What was behind this aggressive move? Wright explained:

“Over the last couple of years, interactive developers [have begun to] require [highend] tools as games have become more sophisticated. We looked at our pricing structure and said, ‘Well, those prices make sense if we continue to maintain our high-end feature set for our traditional market.’ But if [Microsoft] really wants to penetrate the market for game developers as well as other emerging interactive media, it’s important to have more aggressive price points and maintain that leadership position.”

A large number of graphics and animation products have been launched for the Windows, DOS, and Macintosh platforms recently by companies like Caligari and Strata. Although these products aren’t in the same class of function or performance as either the Microsoft or SGI tools on IRIX, they seem to be exerting pressure on software prices for the entire market, regardless of platform. I asked Dave Larson how Silicon Graphics viewed these lower-priced products, and how his company would respond.

“We’re moving down in terms of markets,” declared Larson. “As our price points come down, we’re cutting deeper into various markets… Historically, SGI has been perceived as vastly more expensive and out of reach, a boutique kind of machine. We think we’re rapidly expanding beyond that, and that we’re within reach for a lot of people [developing digital entertainment] for a living. It’s all about how much time you have to get your work done. For instance, a friend of mine just came up who’s been doing a lot of audio work on the Mac, and he just started using a new audio application on our platform. He says it’s dramatically affected his work just after a few days of working with it. What he used to think ahead to do he now does in real time. He can test his decisions as he goes. That’s the metaphor for performance change. Everything happens so much more quickly [on the SGI platform], and your creativity can increase.”

Sega and Nintendo Choose Sides

There’s an interesting sidebar concerning SGI and Microsoft. The two archrivals in the game cartridge market, Nintendo and Sega, have gone to separate corners for their respective development tools, and you can probably guess whom each has enlisted. In 1994, Nintendo selected Alias (whose software was used to create the Super NES blockbuster Donkey Kong Country) as the authorized graphics development system for both current games and next-generation 64-bit games. Last January, Sega chose Softimage 3D as the official three-dimensional development tool for the new SegaSaturn game platform. I’m not saying that this is an instance of “any enemy of my enemy is my friend,” but it is predictable political maneuvering.

As long as the Softimage tools on IRIX don’t take a distant second priority to their Windows NT version, users stand to gain from a price war between two resource-rich companies like Silicon Graphics and Microsoft. Feature sets and performance should evolve more rapidly, and it undoubtedly will spur other SGI platform competitors to keep up.

You’d better get used to seeing more companies merging or acquired as the digital entertainment market expands—it’s a natural consolidation that should continue for the next couple of years.

Alex Dunne is contributing editor for
Game Developer magazine.
C R O S S F I R E
14 GAME DEVELOPER • JUNE/JULY 1995