Publisher 3DO has announced that it is "evaluating its strategic options" following lower than expected revenues in the first quarter of the year, and has issued a warning notice indicating that workforce cuts may be in store.
Revenues for the three months ended March 31 were around $10 million, significantly lower than was expected (more detailed figures will not be available until the final accounts are published in June). Company chairman and CEO fingered the war in Iraq as the culprit, claiming that it caused a drop in sales - which did not pick up in recent weeks after the fighting ended either.
Excuses aside, the publisher is now taking measures to cut its spending - which may well involve a reduction in workforce. Under US law, companies planning to reduce their headcount by over 50 staff must warn their workers in advance, and 3DO has issued just such a notice.
In its announcement on the subject, 3DO mentioned that it is considering a variety of options - including raising additional capital, licensing overseas and other publishing rights to its games, and merging with other companies. The problem is, 3DO is already in debt - to its own chairman, no less - and its line-up of titles and assets isn't exactly the most compelling in the industry.
If the financial situation at the company is as drastic as it sounds, a buy-out may well be its best hope, but realistically, who's interested right now? Once upon a time a couple of its sports titles could have attracted Microsoft, but given the recent launch of XSN Sports, even that seems unlikely.