Why? You don't think it was better for the two major physics API makers to be bought up and made proprietary? I think we all know, nvidia, no um, intel, um, errr, wait, uh...no one is better off with all of these software apis being made proprietary...
I'm too cynical about this now to even worry about this little thing. Back when Ageia and Havok got bought there was a real opportunity for gpu physics that would have made a difference. Rather than Ageia and Havok making their APIs run using either OpenCL or DirectCompute so that there could be competition, we wound up with this crap...All physics being limited by CPU forever. Nvidia can't get developers to alienate AMD gpu owners by making the physics that used physx too stressful, and I'm sure intel will never let Havok build a version of their api that makes use of GPU compute tools, it just strengthens AMDs position. The whole thing is a sad, fucked affair that will forever annoy me.
The point to all this being...it's too late. The idea of a major third party stepping in with the skill to be competitive with either of Physx or Havok that would stay independent and simply license their API to keep the playing field level is just a pipe dream. It's not impossible for someone to do it, but don't hold your breath.
You are missing the point here. Havok is and was Intel's and it worked on AMD or Intel based systems. So basically whatever system you had, the physics were there. Thats why we ALL enjoyed Half-Life 2 physics. Now imagine Half-Life 2 with hardware accelerated physics taht would run on ALL graphic cards, be it Intel (these are still rubbish but anyway), AMD or NVIDIA. I bet that what Valve did in Half-Life 2 by integrating physics into gameplay was limited by the hardware itself. If they did a bit too much with it it might be too taxing on systems from that time. But with HW physics, they could do 5 times the physics integrated into gameplay and still not make the system sweat.
Now back to reality. What have all PhysX powered games in common? They were all dumbed down for anything non NVIDIA just to make PhysX look so awesome even though half of it could be easily done on any CPU. But they instead completely cut it out to artificially make PhysX look better.
And even if we look PhysX running on NVIDIA powered systems. What did they realistically gain? Realistic moving fog and some liquids that still looked like mercury. The rest was some rubbish shattered glass that i've seen back in 2001 in Red Faction 1 and which still looks phenomenal even today, i've seen insane environment in yet again red Faction Guerrilla running entirely on CPU. I've seen amazing physics details in Max Payne 2 on all the misc items in the world. Years before anyone even heard of HW physics. Same goes for clothing simulation. UT99 in 1999 had the most amazing moving flags. Sure they were not dynamic but the movement was so freakin authentic. And the Max's leather jacket in Max Payne 2 yet again. PhysX hasn't done anything others haven't done with CPU. They just overdid it on all ends so it ran like shit even on the fastest quad cores to an extent it often looked just plain ridiculous.
Graphics evolved to what we have today because ANYONE can get them regardless if you have a gfx card from one or another camp. But examples like 3dfx Glide, Creative EAX, PhysX, AMD Bullet Physics never really achieved anything because it only ran on one or another hardware and because of that you can't afford to integrate it into games core gameplay. And if you can't do that you can only do pointless gimmicky things with it. Well who gives a toss about kicking some rubbish cans around or watch old newspaper floating around in a virtual wind. CPU can do that sort of nonsense.
What we need is an open physics standard that anyone can use, integrate into core gameplay and that any end user can enjoy it. Who cares if AMD controls all 3 consoles at the moment? There are still NVIDIA users which aren't exactly in minority and because of them you again can't use TressFX in core gameplay because you'll make the game uninteresting for all the NVIDIA users and if you're a game developer you just can't afford that.
So for the love of gamers and yourself NVIDIA and AMD, stick the exclusives of your physics engines up yours (both), sit behind the same table, work out an open physics engine everyone can benefit from so we can finally move the horribly static games into something they could evolve into like almost 8 years ago. just think of how dynamic gameplay would be if physics in games were actually real, not the shit they sell it to us right now as "realistic". Imagine Battlefield maps that would actually and for real dynamically change through combat time. But because the standard hasn't been worked out you see a wall chip here and a wooden plank broken there and some plant knocked of there and thats pretty much it. Not amused because by now, they could ALL do a lot better...
NVIDIA has NOTHING going on right now except an over priced GPU in a dying desktop market. AMD has a strong APU and a monopoly in the console market. I highly doubt AMD is going bankrupt next year. 
