The 3DO Company

History

Hardware developer

Trip Hawkins wanted to get into the hardware market after the software market exploded with interest thanks to his involvement at Electronic Arts. When the company was first founded, its original objective was to create a next-generation CD-based video game system specified as the 3DO, which would be manufactured by various partners and licensees; 3DO would collect a royalty on each console sold and on each game manufactured. For game publishers, 3DO's $3 royalty per sold game was very low compared to the royalties Nintendo and Sega collected from game sales on their consoles. The 3DO Company and its initiative received the backing of several industry figures including AT&T, Electronic Arts, Goldstar, Matsushita (owner of Panasonic), MCA, and Time Warner.

The launch of the first 3DO system in October 1993 was well-promoted, with a great deal of attention in the mass media as part of the "multimedia wave" in the computer world, the first player being a Panasonic model at the price of US$699 (). Poor console and game sales trumped the enticingly low royalty rate and proved a fatal flaw. While 3DO's business model attracted game publishers with its low royalty rates, it resulted in the console selling for a price higher than the SNES and Sega Genesis combined, hampering sales. While companies that manufactured and sold their own consoles could sell them, at a loss, for a competitive price, making up for lost profit through royalties collected from game publishers, the 3DO's manufacturers, not collecting any money from game publishers, and owing royalties to the 3DO Company, had to sell the console for a profit, resulting in high prices. As the console failed to compete with its cheaper competitors, game developers and publishers, while initially attracted by low royalties, dropped support for the console as its games failed to sell. Stock in the 3DO Company dropped from over $37 per share in November 1993 to $23 per share in late December. Though the company's financial figures dramatically improved in the fiscal year ending March 1995, with revenues nearly triple that of the previous fiscal year, they were still operating at a loss. The console's prospects continued to improve through the first half of 1995 with a number of critical success, including winning the 1995 European Computer Trade Show award for best hardware.

In January 1996, The 3DO Company sold exclusive rights to its next generation console, M2, to Matsushita for $100 million. Thanks in part to revenues from the sale of M2 technology to Matsushita and other licensees, in the first quarter of 1996 the 3DO Company turned a profit for the first time since it was founded, with a net income of $1.2 million. Over the second half of 1996, the company restructured to focus on software development and online gaming, in the process cutting its staff from 450 to 300 employees. President Hugh Martin was given full operating control, while Hawkins remained with the company as chairman, CEO, and creative director.

Third-party developer

After selling the M2 technology to Matsushita, the company acquired Cyclone Studios, New World Computing, and Archetype Interactive. 3DO established a new office in Redmond, Washington devoted to PC games development, with Tony Garcia as its head. In mid-1997 it sold off its hardware business to Samsung for $20 million, making a final break from its origins as a console developer.

The company's biggest hit was its series of Army Men games, featuring generic green plastic soldier toys. Its Might and Magic and especially Heroes of Might and Magic series from subsidiary New World Computing were perhaps the most popular among their games at the time of release. During the late 1990s, the company published one of the first 3D MMORPGs: Meridian 59, which survives to this day in the hands of some of the game's original developers.

Bankruptcy and legacy

3DO struggled in the early 2000s. According to the SEC, the company reported a net loss of over $10m in the nine months to December 2002. The company filed for Chapter 11 bankruptcy on May 28, 2003. Employees were laid off without pay. Three companies explored buying the company outright, but an ongoing SEC investigation into the accounting practices of the industry made this less attractive. Instead, the company's assets were put up for sale in an auction. Many of the assets such as game brands and other intellectual property were sold to rivals like Microsoft (High Heat Baseball), Namco (Street Racing Syndicate), Take-Two Interactive (Army Men) and Ubisoft (Might and Magic, Heroes of Might and Magic). Founder Trip Hawkins paid $405,000 for rights to some old brands and the company's "Internet patent portfolio". The Army Men brand sold for $750,000, then a high amount in games acquisition terms.

The company ceased to file required financial papers after December 2002. While the company had been void for years, the 2003 Chapter 11 petition remained pending until at least 2008. That year the SEC issued trading restrictions for the group. The company was found to be in default that December and its registered securities were revoked.

The Army Men and the Might and Magic franchise continued activity for decades after 3DO's closure at other companies. In April 2020, the rights to over 30 classic 3DO titles were purchased from Prism Entertainment by Ziggurat Interactive, a company which specialises in re-releases of older games. The company cited a desire to bring more classics to digital storefronts, and broader efforts towards game preservation. Their work has included the remastered Killing Time, which was released in 2024.

List of games

Developed

Published

Canceled

• Army Men: Arcade Blasts
• Army Men: Platoon Command
• Army Men: Sarge's War (Released by Global Star Software)
• The Four Horsemen of the Apocalypse

Distributed (U.S. only)

• Pinball Builder: A Construction Kit for Windows
• Pinball Gold Pack

3DO Rating System

The 3DO Rating System was a rating system created by The 3DO Company and used on games released for the 3DO Interactive Multiplayer. The rating system, which went into use in March 1994, uses the following four categories:

• E - Everyone
• 12 - Guidance for age 12 & under
• 17 - Guidance for age 17 & under
• AO - Adults Only

These ratings would appear on the lower front and back of the packaging, while the back of the packaging also specified what content was present in the game. In late 1994, the majority of 3DO's competitors signed on with a new rating system from the Entertainment Software Rating Board; despite this, the 3DO Company opted to continue providing their own rating system, leaving publishers of 3DO games to decide whether to use the 3DO Rating System or the new ESRB ratings. The 3DO rating for each game was designated voluntarily by the game's publisher, in contrast to the ESRB ratings, which were determined independently by the ESRB.

References

References

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20. (August 18, 2003). "Namco, Ubisoft and MS carve up 3DO assets".
21. Fahey, Rob. (2003-08-20). "Final results of 3DO asset auctions released".
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26. (3 May 2020). "Ziggurat Interactive Is Reviving Multiple Retro Titles In 2020!".
27. (12 September 2024). "Game preservation is difficult work – but we must do it now".
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