History
The 3DO Interactive Multiplayer was originally conceived by The 3DO Company, founded in 1991 by Electronic Arts founder Trip Hawkins. The company's objective was to create a next-generation, CD-based video game/entertainment standard which would be manufactured by various partners and licensees; 3DO would collect a royalty on each console sold and on each game manufactured. To game publishers, the low $3 royalty rate per game was a better deal than the higher royalties paid to Nintendo and Sega when making games for their consoles. The licensing method accounts for why the 3DO was available from no less than four separate manufacturers.
However, this made the system extremely expensive. The manufacturers had to make a profit on the hardware itself, whereas most major game console manufacturers, such as Sega and Sony, sold their system almost as a freebie, with expectations of making up for the loss with software sales. This caused the system to be quite unaffordable to the common consumer, one of the biggest factors in its downfall. Some sources claim that 3DO was priced at $699, far above competing game systems and aimed at high-end users and early adopters. Hawkins has argued that 3DO was launched at $599, and not "higher myths that are often reported." For a significant period of the product's life cycle, 3DO's official stance on pricing was that the 3DO was not a video game console, rather a high-end audio-visual system and was priced accordingly, so no price adjustment was needed. Despite this, the promised "early adopters" never showed up to purchase mass quantities of games.
The launch of the platform in October, 1993 was well-promoted, with a great deal of press attention in the mass media as part of the "multimedia wave" in the computer world at the time. Even so, the 3DO was awarded Worst Console Launch of 1993 by Electronic Gaming Monthly. In a special Game Machine Cross Review in May 1995, however, Famicom Tsūshin would score the 3D0 Real console a 26 out of 40.
Price drops announced in February 1996 were perceived in the industry to be an effort to improve market penetration before the release of the promised successor of 3DO, the M2. Heavy promotional efforts on the YTV variety show It's Alive and a stream of hinted product expandability supported that idea; however, the M2 project was eventually scrapped altogether.
The 3DO system was eventually discontinued at the end of 1996 with a complete shutdown of all internal hardware development and divestment of the M2 technology. 3DO restructured themselves around this same time, repositioning their internal software development house as a multi-platform company supporting the Sony PlayStation, Sega Saturn, and computer platforms.
The higher quality of later CD-ROM based systems that emerged in the mid-90s, the limited library of titles, lack of third-party support, and the initial high price point are all considered to be among the many issues that led to the 3DO's demise.
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