3DO Auction Yields Disappointing Financials 19
Thanks to Yahoo!/Daily Deal for revealing the final bidding prices for 3DO's assets, totalling a mere $4.6 million, following the company's bankruptcy auction last week. The article indicates the main winning bidders were "...UbiSoft Holdings Inc. for the fantasy games 'Might and Magic' and 'Heroes of Might and Magic,' for $1.3 million; Namco Hometek Inc. for 'Street Racing Syndicate' at $1.515 million; JoWooD Productions Software AG for the 'Jacked' motorcycle game for $90,000; Crave Entertainment Inc. for 'Army Men' for $750,000; and Microsoft Corp. which paid $450,000 for the intellectual property for 'High Heat Baseball'." 3DO founder Trip Hawkins also bought an Internet patent and much of 3DO's back-catalog for $400,000. 3DO's lawyers claimed that the SEC investigation of games companies launched last month made possible suitors back off, saying: "It probably cost us $10 million easily."
Please, no more Army Men games! (Score:4, Funny)
Damn... just when I thought we'd finally gotten rid of this crappy franchise...
Re:Please, no more Army Men games! (Score:3, Funny)
Crunching the numbers (Score:5, Interesting)
According to the report I mentioned and a couple of other reports, the break-even point (a point where 3DO would not show any losses) is $85 million. As a consequence, they'd either have to sell 85 such games or jack up the sales of their exising titles. At $50 million in 2002, however, their costs were almost twice as high. So we can safely assume that developing an average game costs 3DO around $2 million.
UBI Soft paid $1.3 million for something that generates $1 million in sales and $1 million in net losses per game (not counting expansions). Considering UBI's public relations department, they probably expect to loose most of their fan base, which was the driving force behind the sales. As a result, them buying the Might and Magic franchise actually sounds like a really bad deal. I'm not surprised 3DO has gotten so little for its assets; in fact, I expected less.
Re:Crunching the numbers (Score:5, Insightful)
I think everyone got very good deals out of this, actually, considering the average game costs $3-5 million dollars, especially Microsoft, who got a respected and fully-developed baseball franchise for under $500,000 - crazy.
Re:Crunching the numbers (Score:2)
Re:Crunching the numbers (Score:2)
Nintendo has done this a lot in the past. It seems to work for them.
Re:Crunching the numbers (Score:2)
They haven't progressed much since then, while Black Isle et al have far surpassed them, without any real fancy technology, just solid adventures and stories.
Re:Crunching the numbers (Score:1)
I'm just glad they got the franchise out of limbo. It's always frustrating when game series go extinct (for whatever reason....bad sequels, bad management...both) and no one is able to pick them up and try to solve the problems and repair
Re:Crunching the numbers (Score:3, Insightful)
The problem with that assumption is that it assumes most 3DO titles sold roughly comparable numbers. But computer games is a hit-drive industry, and it's likely that 3DO is typical there, with a lot of games selling very poorly, and a few hits selling far, far more. So their better selling titles would be well above 40,000 units sold.
Since they also got the rights to all the Might and Magic games, as well as Heroes of
Re:Crunching the numbers (Score:1)
It's not that he didn't succeed, he tried to the wrong way. EA was always a publisher. 3DO was a hardware vendor (of some very expensive hardware I might add) before they turned to the soft stuff. Frankly, he could have made 3DO bigger or better, but EA did come 1st and when you're not the 1st out of the gate you're at a disadvantage and Trip and Co had to play catchup
No Trip'D? (Score:1)
Some questions (Score:3, Interesting)
First off, why would SEC investigations make companies back off from the auction? To the best of my understanding the investigation is mainly focused on accounting issues, so why should that affect decisions to purchase new properties? That seems only slightly more likely than claiming that the investigated companies have decided to stop working on games because of the SEC. It's not like they're going to stop everything and wait in breathless anticipation until the investigations are over. Is there some correlating factor i'm missing?
Second of all, doesn't it seem like Trip Hawkins got a good deal out of this? Especially if they're right about the investigation lowering the prices. He drove the company into the ground, and then managed to grab most of the non "A" titles and a pantent at bargain basement prices. I bet he'll evntually be able to sell the pieces at a much higher price once they're not part of a bankruptcy "everything must go now!" type auction.
Using the intelectual property as leverage he might even be able to get the venture capital to found a new, smaller game company. Wash, rinse, repeat.
Re:Some questions (Score:2)
Re:Some questions (Score:1)
Four Horsement (Score:1)