Nope, not after school behind the shelter shed for a bit of biff, but as a strategic acquisition to utilise and work more closely with AGEIA technologies such as PhysX. PhysX is universally used across all gaming platforms from the Nintendo Wii, PS3 and Xbox 360 to countless PC games.

From NVIDIA.com:

"The AGEIA team is world class, and is passionate about the same thing we are — creating the most amazing and captivating game experiences," stated Jen-Hsun Huang, president and CEO of NVIDIA. "By combining the teams that created the world's most pervasive GPU and physics engine brands, we can now bring GeForce-accelerated PhysX to hundreds of millions of gamers around the world."

"NVIDIA is the perfect fit for us. They have the world's best parallel computing technology and are the thought leaders in GPUs and gaming. We are united by a common culture based on a passion for innovating and driving the consumer experience," added Manju Hegde, co-founder and CEO of AGEIA.

This is definitely a move in the right direction on NVIDIA's part in their war against ATI Technologies, how it will affect partnerships with the console manufacturers and quality in games in general however, will remain to be seen.