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Why NVIDIA’s New Chip Changes the Mobile Game

NVIDIA  (NASDAQ: NVDA  )  introduced its powerful Tegra K1 chip at the 2014 International CES earlier this year. It's an important product for NVIDIA, which has done a good job differentiating itself by serving the high end of the market.

The "Tegra Processor" unit is one of two reporting segments for NVIDIA. It comprises Tegra system-on-chip product lines for phones, tablets, PCs, automotive, and gaming devices. The unit pulled in $398 million last fiscal year, accounting for almost 10% of all NVIDIA revenue. However, that total is down some 48% from the prior year – so management and shareholders alike are hoping the K1 will help reverse that trend.

CES provided a great first look at the K1. Motley Fool analyst Rex Moore was in Las Vegas for the huge show, and spoke with NVIDIA's Doug MacMillan about the chip and what it will mean to consumers and developers.

There used to be an eight-year delay from the release of games for high-end PCs until they were available for mobile. In this video segment, MacMillan explains that the Tegra K1 chip runs Epic's Unreal Engine 4, full DX11, and OpenGL 4.4 -- so developers can now write across all platforms at once.

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Doug MacMillan, NVIDIA: One of the biggest things is that we run Unreal Engine 4, Epic's game engine. Epic's Unreal Engine 4 is what is the fuel for the next generation of gaming, so that will be the tool that game developers will use to bring games to high end PC, to consoles, and to mobile.

What we've done is narrowed the gap from the highest-end to mobile, to a span of a couple years. Previously, the last generation, that was an eight-year gap between getting it to high-end PCs, all the way down to mobile.

The interesting thing there is that we've got the PC gaming architecture and API set for game developers -- so it runs full DX11, OpenGL 4.4 -- so developers like Epic and these other guys that are writing the real high-end games can write them across all the platforms simultaneously. It's a big deal for the industry.

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Rex Moore

Rex Moore spent his formative years in Texas, and fought beside Davy Crockett at the Alamo. He currently travels the globe for TMF, bringing back video reports on conferences and companies that matter for investors.

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8/27/2015 3:59 PM
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