In a sad conclusion to one of the more interesting companies in the game business, 3DO files for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Northern District of California, and will try to sell off the company and/or its assets. CEO Trip Hawkins said the company is expected to continue to operate as it works through the bankruptcy process. “This filing gives us more time to complete transactions in the interest of our stockholders,” Hawkins said. “While we hope that this news will generate additional new opportunities, at this point we are focused on pursuing either the sale of the entire company or the sale of its assets.”
This must have been a particularly difficult statement for Hawkins, who left EA to found 3DO in 1993 and has repeatedly bolstered the company’s coffers with personal loans when funds ran low – to a total of about $US 12 million. You can read about 3DO’s early hardware history here. But it’s never really been smooth sailing for 3DO, a company originally founded to create its own game console and eventually forced by a harsh market (and a $US 700 price tag) to write software for other’s consoles. The company was recently in danger of getting delisted from NASDAQ but issued a 1 for 8 reverse stock split earlier this year and secured a $US 10 million credit line, but poor sales left it unable to fully use the credit and apparently even Hawkins own steadfast fidelity to 3DO reached its Rubicon. On May 8 the company warned employees that there would be a mass layoff in July. (Large companies are required by law to give at least 60 days notice when mass layoffs are impending.) May 13 3DO announced that it was exploring its options, including a merger or selling publishing rights to its games in progress, but to no avail and 3DO filed for Chapter 11 on May 29th.