3DO's pricing was caused by a broken business model. Various manufacturers would licence the rights to build the consoles from 3DO, and games developers would buy licences to develop from 3DO at a much lower price than the equivalent from Sega, Sony, or Nintendo. That situation was attractive to developers but left the console manufacturers high and dry. The problem then was that because of the lower priced licences the hardware manufacturers didn't get a cut of the software licensing money, or any money from 3DO to put towards advertising. This meant that, unlike the situation with the later consoles, they had to make a profit from the hardware itself hence the outrageous initial price.


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