Last Updated on September 2, 2025 by Dave Farquhar
3DO sounded like a great premise. Several great minds came together to design a game console that they could license to any consumer electronics manufacturer who wanted to make it. It could have been the VHS or the IBM PC clone of the video game console market. But it didn’t catch on and 3DO exited the game console market June 24, 1997.
3DO’s impeccable pedigree
The brainchild of Trip Hawkins, the founder of Electronic Arts, he joined up with three industry veterans, RJ Mical, Dave Morse, and Dave Needle, to design a game console. Needle and Mical had been key members of the Amiga design team and the Atari Lynx design team. Morse had been their boss. Take a dream team that was always years ahead of their time but hamstrung by working for companies with no funding and poor marketing, and give them funding and marketing and use the VHS business model, and they’d take over the world, right?
3DO’s objective was to create a next-generation, CD-based video game/entertainment standard manufactured by various partners and licensees. 3DO would collect a royalty on each console sold and on each game manufactured. And to provide incentive to developers, the $3 royalty rate per game was much lower than Sega or Nintendo demanded.
The problem with licensing to hardware manufacturers
In theory, licensing the hardware to several manufacturers would create competition, driving costs down. That’s what happened with PC clones and VHS VCRs. But the problem was a quirk in the game console market. By the 1990s, Sega, Nintendo, and Sony were perfectly happy selling their consoles at a loss. The games themselves were profitable enough to more than make up for the money they lost on the hardware.
In the case of 3DO, the hardware makers had to make a profit on the hardware, since they weren’t making money off the software sales. Originally, 3DO consoles retailed for $699. While the price did drop to $399, that still looked bad sitting next to Sony’s launch price of $299 for the original Playstation. Analysts saw this as a problem from the start. In the June 21, 1993 issue of Computerworld, analyst Bart Mallio called the 3DO too expensive for a video game and too limited to be a computer.
So even though 3DO did promote the console, including getting Time magazine to name it its 1993 product of the year, its high price limited it to less than 10 percent of the U.S. video game market.
That’s why 3DO pulled the plug on June 24, 1997.
David Farquhar is a computer security professional, entrepreneur, and author. He has written professionally about computers since 1991, so he was writing about retro computers when they were still new. He has been working in IT professionally since 1994 and has specialized in vulnerability management since 2013. He holds Security+ and CISSP certifications. Today he blogs five times a week, mostly about retro computers and retro gaming covering the time period from 1975 to 2000.
why’d did Sega Saturn and Turbo Graphics fail ?