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PC gamer, WorthPlaying EIC, globe-trotting couch potato, patriot, '80s headbanger, movie watcher, music lover, foodie and man in black -- squirrel!

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'3DO' Says Files For Chapter 11 Bankruptcy

by Rainier on May 28, 2003 @ 7:22 p.m. PDT

Video game publisher 3DO Co. on Wednesday said it has filed for Chapter 11 bankruptcy protection and would seek to either sell the company or its assets. Redwood City, California-based 3DO, which has struggled to gain a foothold in the competitive games business and has relied on Chief Executive Trip Hawkins for funding of late, said it filed for bankruptcy protection in federal court in northern California (thanks HomeLAN).

In a statement, Hawkins said 3DO was pursuing either a sale of the company or its assets.

The company had said two weeks ago it was exploring its options, including a merger or selling publishing rights to its games in progress, after a sales drop in the March quarter left it unable to fully tap its credit facility.

On May 8, in documents filed with securities regulators, 3DO said it had warned its staff of mass layoffs that were expected to be conducted in July. The company never said how many positions were to be cut but in later statements called it a "significant minority."

In a research note in February assessing the state of the industry and the financial prospects of the publicly-traded game companies, Banc of America Securities analyst Gary Cooper said 3DO had no value as an acquisition target.

The company, which has been criticized in the gaming press for its multiple "Army Men" games, has drawn attention for the game "Four Horsemen of the Apocalypse," a violent adventure title. It has also been praised for the high quality of its "High Heat" baseball game franchise.

Shares in 3DO closed up 9 cents at $1.33 on Nasdaq before the bankruptcy filing was announced. The company avoided being delisted from the Nasdaq last year by conducting a one-for-eight reverse split of its stock.

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