Intel Wreaks Havok

On Friday, Intel (Nasdaq: INTC  ) announced that it had acquired Havok, a leading provider of interactive software for the gaming and movie industries. The terms of the deal were not disclosed.

This strategic move gives me yet another reason to be bullish about Intel's long-term prospects. It suggests to me that Intel is serious about strengthening its presence in the growing multimedia and gaming industries.

Many readers may not be familiar with Havok, but if you're a serious gamer or a fan of high-tech movies, you have probably experienced some of its handiwork. Its software has been used in such computer games as Bioshock, Halo 2, Half-Life 2, Motorstorm, and Harry Potter and the Order of the Phoenix. Havok's software has also been instrumental in creating some of the special effects in Hollywood hits such as The Matrix and the recent remake of Charlie and the Chocolate Factory.

Equally importantly, Havok's 3-D software is being employed to power the growing online world of Linden Lab's Second Life. If Web 2.0 platforms such as Second Life want to keep growing more prominent, they'll need to employ the latest and greatest in physics technology to create digital environments that feel more realistic.

Now that Havok is a wholly owned Intel subsidiary, it is quite likely that its programmers will become even more familiar with Intel's growing line of technology, and begin creating software that utilizes its dual- and quad-core chips to full advantage.

The deal is also likely to keep pressure on Advanced Micro Devices (Nasdaq: AMD  ) , which acquired the video chip company ATI Technologies last year.

Intel will be hosting its biggest technical conference of the year this week in San Francisco, and investors can expect to hear a number of exciting new developments. But for the time being, this deal offers ample evidence that the company intends to keep wreaking "Havok" on its competitors by moving into new and strategic areas.

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