3DO signs definitive agreement with Matsushita for $100 million for M2 technology

 Dec. 7, 1995

The 3DO Company today announced that it has signed a definitive agreement with Matsushita Electric Industrial Co., Ltd. for $100 million to license its 64-bit M2 technology. Under the agreement, Matsushita will pay 3DO a $100 million license fee plus additional royalties. 3DO expects to receive $60 million next week. The remaining forty million dollars is scheduled to be received mid next year.

“The $100 million gives us the foundation to diversify our business,” said Trip Hawkins, Chief Executive Officer of The 3DO Company.

“We will exploit our core technology to enter the PC market with software and hardware, the Internet arena, as well as the 64-bit video game market. We are now a company that has the solid financial base needed to embark on a new course of building and growth.”

The 3DO Company’s new business model is based on leveraging its core technology into the software and hardware areas. Under Studio 3DO, the company’s development and publishing arm, it will create applications for the 64-bit M2 and PC platforms as well as the Internet. On the hardware side, it will license technologies to semiconductor companies, deliver hardware products such as digital video encoding systems, and continue to build technologies for the video game market. See attached chart.

Under the signed agreement, Matsushita has exclusive rights to use the M2 technology to power next-generation consumer and commercial products including 64-bit video game systems, Digital Video Disc (DVD) players and interactive television set-top boxes. Matsushita also has the rights to sublicense the M2 technology to hardware companies and software developers. 3DO has the rights to develop products based on the M2 technology for coin-operated arcade game systems, personal computer applications, general computing and software development tools.