3DO: A NEW TECHNOLOGY IN SEARCH OF PLAYERS, BEFORE THE GAME IS OVER

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3DO Co. was the darling of the Consumer Electronics Show in January 1993 when it unveiled a brave new plan to harness the emerging interactive software market.

3DO's idea for its product-daring and revolutionary at the time-was to end the war over incompatibility such as PC vs. Macintosh and Sega vs. Nintendo. It proposed bringing all hardware and software marketers together by licensing 3DO's interactive multimedia platform for all entertainment systems.

The company won the backing of Matsushita, AT&T Corp. and Time Warner, and raised $48.6 million in a public stock offering five months after its splashy debut.

But when it comes to technology, ideas are often ahead of reality. 3DO's multimedia platform is no exception.

The company's problems began when many hardware and software marketers that had initially embraced its product got cold feet.

A TV campaign last fall for the only 3DO-interactive videogame player, from Panasonic, via Grey Advertising, New York, helped raise awareness but holiday shoppers balked at the $699.99 price tag.

3DO tried to jazz up sales this year with two price cuts and a hip spot TV campaign of its own from Sausalito, Calif.-based Butler, Shine & Stern.

Now selling for $399.99, the Panasonic player's total worldwide sales have reached 200,000. But that's only a fraction of the millions of videogame systems Nintendo of America and Sega of America claim.

Complicating the picture is the fact that none of the coming 64-bit videogame machines from those two key players will be 3DO-compatible-making 3DO's original dream of creating one platform for all systems obsolete.

"3DO is facing a real challenge this fall, and it's got to achieve certain sales levels before a new generation of entertainment technology arrives next year," says Lee Isgur, a high-tech analyst with Jefferies & Co.

Despite its efforts-70 videogame titles are available for the Panasonic machine-the troubles keep mounting. Last month, AT&T canceled plans to manufacture a 3DO-compatible system, despite a 4% stake in the company.

That casts a dark shadow over 3DO's long-term prospects.

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