3DO Reports Record Profits

The 3DO Company, which recently decided to get out of the hardware business, reported financial results for its fourth fiscal quarter, which ended March 31, 1997. It made $28.8 million in revenue, a 96 percent increase from the same period last year, with net income at $14 million (compared to $14.7 million for the same time last year). This is 3DO's fifth consecutive profitable quarter. For the year, 3DO reported $92.4 million in revenue, a 144 percent increase over last year, with net profit at $13.3 million. Last year, it reported a net loss of $34.7 million.

According to 3DO, this financial turn-around can partly be attributed to the M2 license agreement that it signed with Matsushita Electric Industrial Co. in December 1995. The deal with Samsung Electronics to buy 3DO's hardware business for $20 million accelerated the recognition of the deferred revenues from that agreement, and the rest of the deferred revenue will be recognized in the next fiscal quarter. And while operating expenses rose from $13.5 million to $14.1 million, this was due to the closeout of 3DO's multiplayer business and the cost of the sale of the hardware systems business. They're expected to decrease now.

3DO also said that its success came from games such as Heroes of Might and Magic II, which has an expansion set coming out this month and a sequel due later this year. Meridian 59 Revelation, an update for 3DO's multiplayer game; Uprising, a first-person war strategy game; and Army Men are also due this year.