Nvidia Swings into Hollywood The chipmaker built its rep with graphics cards for videogames. Now it wants a starring role in creating special effects for movies.
By Noah Robischon

(Business 2.0) – At Sony Pictures Imageworks, the special-effects house behind Spider-Man 2, there's no such thing as faster. "You just get it done better," says VP for technical operations Bill Villarreal. Yet the crew that's pixel-pushing Spidey has more time and graphics power--hundreds of times more--than it did the first time the webslinger swung onto the big screen. Which means that watching the superhero battle to save his girlfriend, Mary Jane, from the clutches of Dr. Octopus will be even more eye-popping than when he saved her from the clutches of Green Goblin. And for that, you can thank Nvidia.

The Santa Clara, Calif., chipmaker made its mark with graphics acceleration chips for desktop computers. It sells about $2 billion worth of them a year, mainly to run videogames. Its big score was winning the contract to supply the Xbox in 2000. But it will lose ground once Microsoft switches to Nvidia's chief competitor, Canada's ATI Technologies, for Xbox 2. Though Nvidia hasn't been ruled out as a supplier for the even more lucrative Sony PlayStation 3, holding its share via the PC market is a constant struggle. Also, notes Gartner analyst Joseph Byrne, "the PC side isn't a large growth opportunity for a graphics chipmaker right now."

Chips Get Discovered

Game over? Not by a long shot. Nvidia has been quietly exploiting a lucrative new opportunity in Tinseltown: It cleverly found a way for film studios to use its chipsets to perform some of Hollywood's most complex technical chores. Though the side business has generated a mere fraction of Nvidia's revenue, it has established the company as a player in a market worth several billion dollars. Along the way, Nvidia learned a valuable lesson not only in how to develop new markets, but also in how to shape its next-generation technology--for use in everything from medical imaging to CAD-CAM systems.

The credit for finding the new market goes to Beth Loughney, the general manager of Nvidia's digital film group. Until the 37-year-old former interactive-television marketer came along, the only thing Hollywood's computer jocks used Nvidia's products for was playing videogames while waiting for their complex special effects to be compiled on powerful servers. That's literally what they were doing during Loughney's first visit to a movie studio on Nvidia's behalf in 2002.

Loughney realized that the engineers were horsing around on workstations outfitted with $2,000 Nvidia Quadro chipsets; the "graphics-processing units" make games perform faster by running the images off the graphics cards rather than the PC's central processor. Loughney's epiphany: With a little reworking, those chipsets could just as easily be used for work as for fun. In fact, Nvidia's GPUs could do it exponentially cheaper and faster than the commonly used software-on-a-server solution.

Out With "Film-Outs"

Over the next six months, Nvidia went from studio to studio, persuading them to deploy the chipsets in their daily work flow. Many bought into the idea. For Sony Imageworks, the most tangible result of the GPU's greater power was the color-correction process for Spider-Man 2. The colors on a computer monitor bear no relation to the chemical dye shades on a film print. So, to finalize a shot in the first Spider-Man movie, each scene manipulated by a computer had to be printed on costly celluloid, screened using a film projector, and then sent back to the lab for color adjustments--an arduous and expensive process known as a film-out. For any given scene in the original movie, there could be four or five film-outs, each taking a day.

By contrast, each shot in Spider-Man 2 required just one film-out. Using Nvidia's QuadroFX graphics cards, Imageworks engineer Jeremy Selan wrote a program that translates CRT monitor colors to match those of film stock. The finished scenes are now screened using a digital light projector. As the digital pipeline becomes more reliable, preliminary film-outs will disappear entirely. "We're in the process of moving the generalized color-correction technology to all the desktops," Selan says.

Nvidia estimates that its Quadro GPUs are now used in 85 percent of the best-known special-effects houses. At Imageworks, Villarreal is planning to install a Quadro on every desktop. Digital Domain, which supplied the effects for Titanic, calls the Quadro its GPU of choice. George Lucas's Industrial Light & Magic created specialized monitor-display software for it. Nvidia counts 120 clients in the movies; countless smaller houses also are buying the company's products off the shelf and then downloading the Linux drivers and tutorial test programs for free from the developer's website.

But Nvidia isn't content with just becoming the standard for Hollywood's graphics hardware; it wants to dominate software for the film industry too. In April it unveiled Gelato, a piece of $2,700 rendering software. That puts Nvidia squarely up against Pixar and its 800-pound clownfish, a program called RenderMan. Dethroning RenderMan won't be easy: The software is ubiquitous in the film industry; it was used to make 35 of the last 39 films nominated for visual-effects Oscars. "There's a lot of inertia," says Amit Agrawal, Imageworks's executive director of software, "which is helping RenderMan and hindering Gelato." For example, Sony's new special-effects software will be written for Gelato, but the company is still relying on RenderMan for much of its day-to-day production.

The Halo Effect

Like a media-savvy Starlet, Nvidia says it isn't in Hollywood for the money as much as for the fame. Workstation chipsets account for only about 10 percent of the company's revenue, but deploying hot-rod hardware and software on big-budget movies is an excellent way to build respect in its core markets. "It's the reason Ford does Formula One racing with the Jaguar team," Loughney says.

So it's no surprise that all the new technology being developed for moviemaking will ultimately be used to sell consumers on more cinematic-looking PC games. For example, parts of Lucas's technology have already been incorporated into the newest $500 GeForce consumer graphics cards. Nvidia's bread and butter is still the videogame-centric PC, which accounts for about half of its annual revenue. As Imageworks's Selan says, "Wouldn't you want to buy the graphics card for the Spider-Man 2 game that they used to make the Spider-Man 2 movie?" Indeed. And what better way to test and market these new capabilities than with a $200 million film about a superhero who yearns to be a regular, videogame-playing guy.