Today's Hard|Forum Post
Today's Hard|Forum Post

GeForce Partner Program Impacts Consumer Choice

While we usually like to focus on all the wonderful and immersive worlds that video cards and their GPUs can open up to us, today we are tackling something a bit different. The GeForce Partner Program, known as GPP in the industry, is a "marketing" program that looks to HardOCP as being an anticompetitive tactic against AMD and Intel.

GeForce Partner Program Impacts Consumer Choice

To open up this bit of reporting, which will contain some editorial as well, I think our motives should be clear. In discussions with NVIDIA over the last few weeks, NVIDIA asked us exactly what our concerns were about the GPP program. This was our reply and should frame exactly why we are writing this.

Kyle Bennett: "I think it [GPP] is going to greatly, and negatively, impact consumer choice in the AIB and OEM computer market. Consumer choice is going to be decimated. Looking at the program guidelines, I truly think that is what will happen and is where my concern lies."

Before we go any further, in the effort to be as transparent as possible, we need to let you know that AMD came to us and presented us with "this story." AMD shopped this story with other websites as well. However, with the information that was presented to us by AMD, there was no story to be told, but it surely pointed to one that was worth looking into. There needed to be some legwork done in collecting facts and interviews.

At this point you're probably wondering, "What is NVIDIA GPP?" A couple of weeks after we began questioning NVIDIA on GPP, it put up an article on its blog.nvidia.com domain entitled, "GeForce Partner Program Helps Gamers Know What They're Buying." Here what John Teeple, Director - Partner Marketing at NVIDIA, has to say about GPP.

In our latest effort to better serve gamers, we're introducing our GeForce Partner Program.

The GPU and software of a gaming PC make all the difference in a gamer's experience. And together with our add-in card and system partners, we're dedicated to building the best PC gaming platform bar-none -- this is the GeForce promise.

The GeForce Partner Program is designed to ensure that gamers have full transparency into the GPU platform and software they're being sold, and can confidently select products that carry the NVIDIA GeForce promise.

This transparency is only possible when NVIDIA brands and partner brands are consistent. So the new program means that we'll be promoting our GPP partner brands across the web, on social media, at events and more. And GPP partners will get early access to our latest innovations, and work closely with our engineering team to bring the newest technologies to gamers.

Partners are signing up, fast. They see the benefit of keeping brands and communication consistent and transparent.

The program isn't exclusive. Partners continue to have the ability to sell and promote products from anyone. Partners choose to sign up for the program, and they can stop participating any time. There's no commitment to make any monetary payments or product discounts for being part of the program.

GPP ensures our engineering and marketing efforts support brands consumers associate with GeForce. That transparency will give gamers the confidence needed to make their purchase, whichever products they choose

Admittedly, GPP sounds like a good program on the surface, but after digging into documentation and interviews with OEMs and AIBs in the past weeks, the warm and fuzzies quickly subside. HardOCP has been in the computer hardware review business for over 20 years now, and we have made an abundance of contacts along the way. In order for our preparation to write this article, we have spent the last three weeks talking to OEMs and AIBs in the industry that do business with NVIDIA on a large scale. Given how GPP is all about "transparency," you might think that those OEMs and AIBs would be chomping at the bit to get some free press on how those companies are part of the GPP program.

We have contacted seven companies about their part in NVIDIA GPP and not one of the seven would talk to us on the record if they spoke to us about it at all. The ones that did speak to us have done so anonymously, in fear of losing their jobs, or having retribution placed upon them or their companies by NVIDIA. All of the people that I did interview at AIBs and at OEMs did however have the same thoughts on GPP. 1.) They think that it has terms that are likely illegal. 2.) GPP is likely going to tremendously hurt consumers' choices. 3.) It will disrupt business with the companies that they are currently doing business with, namely AMD and Intel.

The crux of the issue with NVIDIA GPP comes down to a single requirement in order to be part of GPP. In order to have access to the GPP program, its partners must have its "Gaming Brand Aligned Exclusively With GeForce." I have read documents with this requirement spelled out on it.

What would it mean to have your "Gaming Brand Aligned Exclusively With GeForce?" The example that will likely resonate best with HardOCP readers is the ASUS Republic of Gamers brand. I have no knowledge if ASUS is a GPP partner, I am simply using the ROG brand hypothetically. If ASUS is an NVIDIA GPP partner, and it wants to continue to use NVIDIA GPUs in its ROG branded video cards, computers, and laptops, it can no longer sell any other company's GPUs in ROG products. So if ASUS want to keep building NVIDIA-based ROG video cards, it can no longer sell AMD-based ROG video cards, and be a GPP partner.

NVIDIA will tell you that it is 100% up to its partner company to be part of GPP, and from the documents I have read, if it chooses not to be part of GPP, it will lose the benefits of GPP which include: high-effort engineering engagements -- early tech engagement -- launch partner status -- game bundling -- sales rebate programs -- social media and PR support -- marketing reports -- Marketing Development Funds (MDF). MDF is likely the standout in that list of lost benefits if the company is not a GPP partner.

As you might recall, we have seen onerous terms such as those contained in GPP to have many similarities to Intel's once monopolistic business practices (versus AMD) in withholding MDF to partners. The results of that situation were huge multi-billion dollar fines for Intel. GPP has some striking similarities.

What is disturbing is that we have been told that if a company does not participate in GPP, those companies feel as if NVIDIA would hold back allocation of GPUs from their inventories. From all we have talked to, the issue of not allocating GPU inventories to non-GPP partners have not been spelled out contractually, but is rather done on a wink and a nod.

The motivations behind this GPP move by NVIDIA is somewhat confusing at first blush. Why would a company that owns ~70% market share, and has no true high-end competition make a move like this? Many people that I have spoken to fully question the legality of the GeForce Partner Program. Interestingly enough, we think that the roots of GPP makes it way all the way back and somewhat dovetails with our From ATI to AMD back to ATI? A Journey in Futility article published in May of 2016. That was the first time that the world got wind of AMD getting into bed with Intel to do some GPU business. We believe at that time NVIDIA put another "exclusive" plan into place, however by a different name, and the GeForce Partner Program we are seeing now is somewhat an extension of that previous program.

One thing we know is that NVIDIA has made a lot of enemies over the years. You can easily put AMD, Apple, and Intel on that list. We think that GPP is somewhat the result of those "feuds" with NVIDIA attempting to gain more control over the market as it is seeing its competitors developing products (ie AMD and Intel partnerships on products) that will not be open to NVIDIA.

As mentioned above, NVIDIA questioned my concerns and I copied and posted those above. There was however a lot more in that email that I wrote to NVIDIA on February 22nd and I am going to quote that below. To date, NVIDIA has never responded to that email or the concerns put forth in it.

This is a big story, but it all goes much further than consumer choice, however it does not matter to me on a personal level beyond that. I am just being my tech journalistic self, which I have to do from time to time. And after the story I wrote about AMD in 2016 on the Intel/AMD deal and the politics attached to that, this story is going to get a LOT of exposure now that HardOCP's credibility has been returned, if not exalted since all the truth came out on that. I am making sure all my I's are dotted and T's crossed and have already prepared my lawyers with what I need to win any sort of lawsuit that might come out of this. They feel I am on solid ground and have signed off on moving forward.

There will certainly be follow up stories written by many websites though, that have a much better grasp of the financial side of this.

I would highly, actually, almost assuredly suggest that GPP is going to open NVIDIA to lawsuits from AMD and Intel. That alone is going to cause NVIDIA to shoulder financial burden. The OEMs and AIBs will not sue NVIDIA, but they will be deposed for years on this and the concerns about that are already being voiced in a very big way. Intel paying $1B+ for anticompetitive practices is one thing, but Jensen having to explain it to your shareholders is going to be a very big deal in terms of NVIDIA stock price. I have to guess that AMD and Intel's latest foray into business together has gotten Jensen worried enough to roll the bones though.

It is my opinion that GPP is not a good business plan for a company that is dominating in terms of both product performance and market share.

As for the timeline for my story, I am wrestling with timing on its publication currently. Publishing before GPP contracts are signed or after GPP contracts are signed? I still have not decided on that.

At publication time, NVIDIA has not returned our request for the list of companies that will be involved in its GeForce Partner Program.

There is no doubt that NVIDIA GPP has some striking similarities to what Intel has done in the past that has been deemed "anticompetitive conduct" by the Federal Trade Commision. We would not be surprised to see regulators in the US, Europe, and Asia want to take a closer look at GPP as well.

It was expressed to me that publishing this article "could damage the relationship" between HardOCP and NVIDIA. As noted previously, we have been reviewing computer hardware for quite a while. What "damaging the relationship" means to us is that HardOCP will very likely not be doing any NVIDIA GPU reviews at launch time. It is very likely that AIBs and OEMs will be instructed to not to sample HardOCP for reviews on any of their video card products as well. If you do see NVIDIA video card reviews on HardOCP in the future, those will likely be fully funded in-house, as we will be required to purchase all of the review hardware from retail sources. We feel however that this story surely needs to be told.

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