3DO System price lowered to $499

February 22, 1994

The 3DO Company today announced that the suggested retail price of Panasonics REAL  3DO Interactive Multiplayer system will be decreased 28 percent to $499.95 effective immediately. The 3DO system, currently manufactured by Matsushita Electric Industrial Co., Ltd. (MEI), and marketed in the United States by Panasonic, began shipping in October 1993 at a suggested retail price of $699.95.

 “At $499, the 3DO Interactive Multiplayer system will appeal to an even broader audience,” said Trip Hawkins, 3DO’ s president and CEO. “The combination of an attractive price and a growing library of hit software titles makes the 3DO system an irresistible choice for people who want the best in interactive entertainment. Our competitors in the advanced CD arena have announced that they will ship their first products in the U.S. in 1995 at prices around $500,” Hawkins added.

“The fact that we currently have a 3DO system on the market, and that we have already broken the $500 price barrier in early 1994, should put us in a very strong position heading into 1995.”

 Matsushita announced last week that its 3DO system, scheduled for launch in Japan on March 20, will retail for about 54,800 in Japan, or about $500. 3DO also announced that it plans to offer Matsushita and other hardware system licensees’ incentives to accelerate the retail sales of attractively priced 3DO Interactive Multiplayer systems. The company anticipates that this incentive program will provide for the issuance of two shares of 3DO common stock for each 3DO Interactive Multiplayer system sold at or below certain suggested retail price targets through Sept. 30, 1994.

 3DO has reached a tentative agreement with Matsushita with respect to this planned hardware incentive program. 3DO expects that hardware units sold by Matsushita through Sept. 30, 1994, at the new prices announced today will qualify for the stock incentive. Hardware units sold by other 3DO hardware system licensees may also qualify for the stock incentive, and 3DO intends to make a similar offer to these companies. The value of the stock issued under the planned incentive program will be recognized as an expense on the company’s financial statements. 3DO believes that this incentive program will encourage aggressive pricing by manufacturers in parallel with ongoing cost-reduction efforts.

Advances in chip integration, parts cost reduction, and factory efficiencies have recently reduced the cost of manufacturing 3DO systems by about 15 percent. 3DO expects manufacturing costs to decline an additional 20 percent or more this fall.

 “We knew that a price of $499.95 could be achieved in the fall of 1994 because of these efficiencies, Hawkins added. Our agreement with Matsushita has enabled this magic price point to be achieved seven months early.”

 The $499.95 price is expected to be a boost for Matsushita introductions of 3DO systems in Japan and Europe in March and summer 1994, respectively, and should also enable expanded distribution and sales efforts in the United States. Other 3DO manufacturers are expected to benefit from the cost reduction efforts as they introduce 3DO products later in 1994. 

In January, AT&T and Sanyo announced that they will introduce 3DO products this year. Overall, 3DO expects to have four 3DO-compatible hardware brands shipping on three continents this year. There are about 200 titles in development or completed for the 3DO platform, with about 20 titles currently available in retail outlets throughout the United States.

 “With the recent release of Total Eclipse and the imminent release of Twisted and John Madden Football, consumers are finally seeing the proof that 3DO is by far the most advanced entertainment system available,” Hawkins said. “With the versatility of 3DO and the new $499.95 price, 3DO offers a breakthrough value that many consumers will now be able to appreciate.”