VM Labs was the company behind the Nuon technology which was used in several DVD players from Samsung, Toshiba, & RCA and the "Streamaster" IP set-top box from Motorola. The Nuon technology brought features which other DVD players didn't have at the time (around 2000), such as playing games created for Nuon, visual effects while playing audio CDs (provided by VLM (Virtual Light Machine) which was created by Jeff Minter), 128 speed rewinding/fast forwarding, zooming up to 16x & many more features. VM Labs business model was as a fabless semiconductor and software platform company
The founder of VM Labs, Richard Miller, was a former vice president of Atari Corporation, and several prominent VM Labs employees (including Jeff Minter) were also associated with Atari Corporation prior to its takeover by JTS. As a result, many former Atari users were initially enthusiastic about the Nuon DVD technology. This enthusiasm lead to disappointment in some cases, as VM Labs was harshly criticized by some Nuon fans for promising features such as a modem and many games, but delivering very little.
After a funding round collapsed shortly after September 11, 2001 VM Labs was forced to lay off half their staff and take on debt to stay afloat. Many games in development were cancelled & some developers lost money. In December 2001 VM Labs filed for Chapter 11 bankruptcy and the Nuon technology was purchased in February 2002 by Debtor-in-Possession Genesis Microchip, who planned to integrate the Nuon and Faroudja technologies for the DVD market. However, in August 2002, Genesis decided to shut down the Nuon division, development on the Nuon technology was stopped, and all the former VM Labs employees were fired. Some engineers were later hired back to develop new products based on the Nuon technology.
The cause of VM Labs' failure is a matter of debate. Some Nuon owners accuse VM Labs of poor thinking when it came to video games, accusing the company of misunderstanding the market for their games. According to these fans, VM Labs over-emphasized simple games for casual gamers when in fact such casual gamers are impressed by graphics aka eye candy. Others believe the company should have paid more attention to providing enhanced features for DVD playback rather than concentrating on games. Still others simply think the company tried to be too ambitious just as a major stock market downturn (the end of the dot-com bubble) made raising capital more difficult, and as the DVD chipset market became commoditized through the entry of competitors like Mediatek.