Power Play (C): 3DO in 32-bit Video Games

Case Solution

Adam Brandenburger
Harvard Business School ()

The 1980s were “Nintendo’s” decade for video games, while Sega became famous in the early 1990s for its next-generation 16-bit technology. In early 1994, Nintendo and Sega divided the world’s installed base of 16-bit home video game systems roughly evenly. Although 16-bit systems offered superior graphics, sound, and playability compared to previous 8-bit systems, many observers saw them as a transitional technology that will likely be replaced in the next two to five years. The case centers on the efforts of 3DO, a high-profile American startup, to promote a new 32-bit platform. It also describes the new technologies being developed by Nintendo, Sega, Sony, Philips, and Atari. By expanding the scope of the game, 3DO has created a window of time for established Nintendo and Sega players. It focuses on how 3DO seized this opportunity. It specifically illustrates the strategy of bringing new players into a game. To earn money by licensing the software technology, 3DO has made the hardware technology available for free.

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