3DO Closes in on 500,000 Unit Milestone; Company Names New Executives, Restructures to Focus on 1995 Growth.

REDWOOD CITY, Calif.--(BUSINESS WIRE)--Dec. 19, 1994--The 3DO Company (NASDAQ:THDO) today announced that sales of the 3DO Interactive Multiplayer(TM) system have increased significantly, with the number of 3DO systems approaching a worldwide installed base of 500,000. In conjunction with this key achievement, 3DO also announced the appointments of two new executives, and organizational changes to meet the company's growth goals for 1995.

"Reaching an installed base of 500,000 is a key milestone for every successful format," said Trip Hawkins, 3DO's president and CEO. "This number signifies that the 3DO format is now an important business for software companies and retailers. And we're reaching this threshold quickly, after just 15 months on the market. Only a handful of other formats have been able to reach the 500,000 mark any faster than 3DO."

3DO products have experienced significant quarter-to-quarter unit sales growth since the October 1993 launch. "Of course we're benefiting from seasonal sales right now," Hawkins added. "But that's not enough to explain why the sales rate is more than 20 times what is was at this time a year ago. We believe that customers are telling us that we have a successful product."

The company also noted two other significant sales trends affecting 3DO's growth: the recent launch of competitive systems, and the accelerated growth of the installed base in North America.

"With the launch of the Sega Saturn and Sony PlayStation in Japan, we have our first serious competition in the market for advanced CD-based consumer systems," said Hawkins. "We're happy to report that our sales have continued to be strong in the face of this new competition. They appear to be expanding the market rather than taking sales away from 3DO.

"In addition, the sales rate of 3DO systems in North America has increased steadily to the point where it is now comparable with the success that 3DO is enjoying in Japan. With our strong position in Japan and the North America installed base approaching 200,000, we have reached critical milestones in two major territories," Hawkins added.

3DO also announced today that it has reorganized to emphasize key growth goals for 1995. "For the last few years, we have been a development stage company, launching new products, exploring many possible strategies, and growing very rapidly," Hawkins said. "We are now making the transition to an operating company. We now want to focus the majority of our efforts on expanding the success we are having with our CD-based 3DO system and our key manufacturing partners, Matsushita and GoldStar."

In conjunction with this focus on its core business, 3DO also announced the addition of John A. Orcutt as Senior Vice President of Business Operations, and Robert Lindsey as Senior Vice President of Marketing and General Manager of Studio 3DO.

Orcutt, 42, joins 3DO from Nomadic Systems Inc. where he was president and CEO. In his new position managing Business Operations at 3DO, Orcutt will report to 3DO's Chief Operating Officer, Hugh Martin. The new department will consolidate the former technology, advanced development, product management, licensing, and business development groups. Engineering departments will be consolidated under Toby Farrand, 3DO's Senior Vice President of Hardware Engineering and Operations. "John is a seasoned business leader with a strong background in business operations, and a welcomed addition to the 3DO management staff," Hawkins said.

Lindsey, previously was Senior Director of Marketing at Sega of America. He will manage 3DO's software publishing business and corporate marketing activities. "Bob has over 12 years of video game industry experience and we're delighted to have him on our team," said Hawkins.

3DO today also announced the promotions of Don Jaworski to Senior Vice President of Software; Janet Strauss to Vice President of Marketing; Dean Drako to Vice President of Product Engineering; and Paul Milley to Vice President of Finance. Other promotions announced today included Greg Richardson to Director of Software Business Development, and David Maynard to Director of Software Engineering.

With these changes, 3DO will be able to streamline its organization and reduce expenses through the elimination of redundant positions and the reduction of its use of outside contractors. "We believe these adjustments will make us an even stronger competitor and help us to meet our key business goals in 1995," Hawkins said.

While the company will reduce and postpone expenses in the development of vertical or niche markets, 3DO will maintain its commitment to being a key participant on US WEST's interactive television trials in Omaha, Neb.

Based in Redwood City, Calif., The 3DO Company (NASDAQ:THDO) develops and licenses advanced interactive technology to hardware and software companies worldwide. The company's initial product design, the 3DO(TM) Interactive Multiplayer(TM) system, was created to deliver a breakthrough in interactive entertainment at an affordable price. 3DO also develops, publishes, and distributes CD-ROM software for the 3DO system.

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Notes to Editors: 3DO, the 3DO logo, and Interactive Multiplayer are trademarks of The 3DO Company. All other brand or product names are trademarks or registered trademarks of their respective owners.

CONTACT: The 3DO Company, Redwood City

              Cindy McCaffrey, 415/261-3236
              Diane Hunt, 415/261-3214