What happened to 3DFX was that they were busy executing a merger because they felt that it would be better if they had made their own video cards, since this is the route that ATI had gone for so many years. I don't know what they were thinking, but I guess they wanted to take their brand name to the "next level" and sell directly to the public. They had acquired the company known as STB.
This merger delayed the Voodoo3, which was the first 'real' 2D/3D chip from 3DFX. I say 'real' because the Voodoo banshee was a horrible piece of crap. The voodoo3 was merely a slightly beefed up Voodoo2 with a 2D core attached to it. It really wasn't all that phenomonal of a card. The Nvidia TNT2 and later the Geforce series sealed the fate.
3DFX was plagued with even more delays, and it took them quite a while to get the Voodoo 5 out the door (I believe the Voodoo 4 was going to be a PCI solution developed by 3DFX that I don't believe made it), and by this time Nvidia had the Geforce 2. The GF2 smacked the crap out of the Voodoo5. Not to say that the Voodoo5 wasn't a bad piece of hardware. It was faily decent, and had it NOT had been delayed, the card might've made it in the market, since it was originally meant to compete with the original Geforce.
What killed 3DFX was the constant delaying of products. All of their products were pretty good, but because they were forced to wait so long, the competition beat them out.
3DFX had some good products. The voodoo2 was probably the BEST video solution at the time, especially when you could upgrade to 2 of them and chain them together for SLI (Scanline Interleave) mode. This also increased frame buffer memory so you could actually run 1024x768. It's amazing how far we've come in 7 years, and this is MOSTLY thanks to Nvidia and Microsoft, both of whom have been driving forces behind this. Nvidia with their top end 3D Hardware releases, and Microsoft being the mediator of the DirectX specification.
7 years ago you had to have Glide to be a 'somebody', now it's DX9.....I remember when people would balk in disgust at DX
Ahh how the times change.
And just a little FYI, a dual Voodoo2 12MB SLI setup at the time was $600 USD. Each card was $300. I think a company known as Obsidian released a single Voodoo2 that had 6 3DFX chips on it to make a single card SLI board that ran for $600 as well.
So $500 graphics for the top end power is not uncommon.
Forgot something else, you also needed your own graphics card for rendering 2D at that. So you're looking for something good to render Windows + top end 3D power was running you nearly $700 and was a 3 slot video solution All of this just to run 1024x768x16 in games