History
In 1992, Servan Keondjian started a company named RenderMorphics, which developed a 3D graphics API named Reality Lab, which was used in medical imaging and CAD software. Two versions of this API were released. Microsoft bought RenderMorphics in February 1995, bringing Keondjian on board to implement a 3D graphics engine for Windows 95. This resulted in the first version of Direct3D that shipped in DirectX 2.0 and DirectX 3.0.
Direct3D initially implemented "retained mode" and "immediate mode" 3D APIs. The retained mode was a COM-based scene graph API that attained little adoption. Game developers clamored for more direct control of the hardware's activities than the Direct3D retained mode could provide. Only two games that sold a significant volume, Lego Island and Lego Rock Raiders, were based on the Direct3D retained mode, so Microsoft did not update the retained mode after DirectX 3.0.
The first version of Direct3D immediate mode was based on an "execute buffer" programming model that Microsoft hoped hardware vendors would support directly. Execute buffers were intended to be allocated in hardware memory and parsed by the hardware in order to perform the 3D rendering. They were extremely awkward to program, however, hindering adoption of the new API and stimulating calls for Microsoft to adopt OpenGL as the official 3D rendering API for games as well as workstation applications. (see OpenGL vs. Direct3D)
Rather than adopt OpenGL as a gaming API, Microsoft chose to continue improving Direct3D, not only to be competitive with OpenGL, but to compete more effectively with proprietary APIs such as 3dfx's Glide. A team in Redmond took over development of the Direct3D Immediate mode, while Servan's RenderMorphics team continued work on the Retained mode.
Read more about this topic: Microsoft Direct3D
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