The 3DO Company

Panasonic 3DO console

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 called the 3DO Interactive Multiplayer, 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 launch of the console 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 3DO console launched in October 1993 at the price of US$699 (equivalent to $1,400 in 2022).[3] 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.[4] 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.[5] 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.[6] 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.[7]

In January 1996, The 3DO Company sold exclusive rights to its next generation console, M2, to Matsushita for $100 million.[8] 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.[9] 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.[10] President Hugh Martin was given full operating control, while Hawkins remained with the company as chairman, CEO, and creative director.[11]

I no longer own any 3DO IP, don't keep track of it and don't personally know any owners. Finding it would be like discovering the Ark of the Covenant! Nearly 30 years ago Matsushita and Samsung bought the system and hardware IP and the people involved then have retired. 3DO game software IP was auctioned off in 2003. Microsoft bought High Heat Baseball, Ubisoft bought Might and Magic. I believe Army Men is now owned by Take Two. Mystery solved?
— Trip Hawkins, Founder EA & 3DO[12]

After selling the M2 technology to Matsushita, the company acquired Cyclone Studios,[13] New World Computing,[14] and Archetype Interactive. 3DO established a new office in Redmond, Washington devoted to PC games development, with Tony Garcia as its head.[15] 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.[16]

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.

After struggling for several years, the company filed for Chapter 11 bankruptcy in May 2003.[17] Employees were laid off without pay.

The company's game brands and other intellectual properties 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).[18] Founder Trip Hawkins paid $405,000 for rights to some old brands and the company's "Internet patent portfolio".

In April 2020, over 30 of the company's titles were purchased from Prism Entertainment by Ziggurat Interactive.[19]