Trip Hawkins interview: typed by 2TUFF

Is TRIP Hawkins still DREAMING?

At 40, Trip Hawkins is one of America's hottest new entrepreneurs. After ten years of building Electronic Art's into the world's largest entertainment software company he went on to convince some of the world's largest investors that a new unproven format would be the future for interactive entertainment.

But already, dark clouds are hanging over 3DO's plans. How will a delayed UK launch and the impending threat of Japanese giants spoil the 3DO campaign? To get some answers, Edge talked at length with Trip at the Spring ECTS.

EDGE .. Do you really think there'll be room for yourselves, as well as Sega, Sony and Nintendo, in the interactive entertainment market?

TRIP .. Well, the market's going to be very big. And there's never been a standard in the interactive industry. It's just that in the long run, the consumer would be better off if the industry evolved into a more standardised approach.

EDGE .. And that standard should be 3DO?

TRIP .. We're throwing our hat in the ring and saying we'd like to become a standard - but you have to earn that. Maybe there's a market that's dominated by one technology, or maybe one that's split up by two, it may have three; it may have ten. the more different formats there are, the more it divides up the efforts of the software industry and the more it creates confusion for the consumer and problems for the retailer trying to stock everything. So in that sense, it's a not a good thing. On the other hand, you don't want to have a standardised market based on a product that's not adequate. So you're gonna have competition until there's a clear winner that has the right technology and all the right business characterisitics.

EDGE .. And 3DO is good enough?

TRIP .. We think we have the right starting point. It's not really fair for anyone to compare our 1993 products against their plans for 1995. We haven't made any announcments for our plans for 1995. But we're fairly comfortable that our next generation hardware will blow everything those guys are doing out of the water! Not only that, since we started earlier and we know our hardware can be backward compatible. From day one our next generation system will run all our exsisting software - so that gives us a head start. None of our competitors have ever made two systems that run the same software.

EDGE .. So you're working on a replacement system rather than an upgradable one?

TRIP .. There's different ways you can approach that. For somebody that buys the current player, there's quite a bit of expansion capability for it: they can add mpeg, they can add more memory, they can add a modem - in the future they can add other peripherals like a disk drive or a printer; they can probably even add a (dvd) opticial disk player in the future. So there's a considerable growth path there.

On the other hand, if you go in and change the fundamental processing characteristics of the machine, if you want to go to much, much higher performance levels you can't. So projects like the (mars) add-on for the megadrive, won't be as powerful as the sega saturn. At some point you've got to reset the hardware.

EDGE .. Do you have a timescale for this new machine?

TRIP .. We don't have anything to announce at this point. we feel that right now we're the only company that's supplying a really advanced (cd) system - and that's going to be true for the next several months.

We want to make as big a market as we can with our current product. We don't think we need a next-generation product until there's more pressure in the marketplace.

EDGE .. How scared do you think Sega and Nintendo are of 3DO?

TRIP .. Companies like that don't get scared.

EDGE .. They must be aware of what you're doing?

TRIP .. They're not scared, but that suits me. The way companies hang on to their marketshare is by being scared.

EDGE .. Are you worried by the advent of consoles like Saturn and the PS-X, which seem so much more powerful than 3DO?

TRIP .. SEGA and SONY are anxious, and they're just trying to mess up our plans as best they can by promising the world everything.

EDGE .. But noone can ignore a company as big as Sony. How do you see PS-X competing with 3DO?

TRIP .. SONY have had a graphic workstation business; they understand polygon rendering and have special customers that demand it. But i think when sony come to market they might discover that they've underestimated how important traditional cell animation is and overated the importance of polygon rendering.

EDGE .. But surely polygons are important?

TRIP .. Polygons are fashionable at the moment - particularly in the arcades. But remember, we designed our system in 1991. None of the microprocessors Sony and Sega are using in their systems were available at the time we designed ours. They've simply picked a higher benchmark in performance.

Besides, games like total eclipse and john madden football combine great texture-mapping and polygon rendering, and that's a pretty satisfactory experience right now. I'm not saying that more performance wouldn't be better - all these technologies are going to get better - that's the difference between first generation and second generation. With our next generation hardware, polygon rendering will probably be an area we'll get more heavily into.

EDGE .. But there's still a danger that people will hold off on 3DO now simply because they know the Sony machine's coming out?

TRIP .. There's a basic principle about consumer electronics: it gets more powerful all the time and it gets cheaper all the time. that's true of all types of consumer electronics.

If you always wanted to wait for something better, you'd never buy anything, right? We're all going to be dead in 100 years, so in the meantime if you want to use the most advanced system this year, then you have to buy a 3DO.

But if you brought a machine last year, you're not going to buy another system this year - no matter how good it is. So the guy that we're really targeting our system at this year is one of the guys who brought a 16bit system three or four years ago and has pretty much had it with that, and he's ready to buy something new. Maybe in three years time he'll buy something else.

EDGE .. What happened to 3DO's plans to enter the arcades?

TRIP .. Well, there are three companies right now working on arcade machines based on 3DO's. American Laser Games are infact very close to releasing their first 3do product. Atari games are also working on a couple. Electronic Arts are also exploring this area.

EDGE .. What's happening with the UK launch of 3DO?

TRIP .. Well, we're still in the planning stages, and we're going to release the product in early september. There had been some discussion about doing it sooner, but based on the success we've had already, and the launch of the product in Japan, everyone concluded we should take our time and make sure we have all the right elements in place to do a really successful launch. We don't think it would really accomplish anything to go out sooner than that.

EDGE .. You mentioned Japan. What about companies like Konami and Capcom? When are they going to start delivering some `killer' software on the 3DO?

TRIP .. Well, some of those companies are having pretty good discussions with us right now. I shouldn't speculate a lot about what their plans are because every company feels differently about when to announce what they're doing with 3DO. But as far as videogames are concerned, i think we've got very strong support in general there are a lot of software companies and nobody's been able to get all the programmers to devote themselves to a new machine; you have to earn that kind of loyalty over time.

But we also think that we've got more quite alot more support than any new format has ever had. Obviously the guys that have been the most loyal and the biggest supporters of nintendo, moved pretty slowly to sega, and they'll move slowly to a format like 3DO. The same is true of guys that are coming from a dominant experience on other formats like the PC.

EDGE .. Are you happy with the software support you've received so far?

TRIP .. The only problem we've had is the amount of time it's taking people to develop titles. We started supplying development systems about 18 months ago, so i think thats a pretty good indication of what the sega and sony launch schedules really are.

It takes about that long because your normal development cycle is going to be lengthened - you have to take time to learn how the machine works and what you can do with it. And initially, a lot of companies avoid trying to make a really radical new kind of title for a new system, because that would involve learning a new machine and learning how to make the new title at the same time.

So most developers say to themselves; `let's take an existing title and let's learn this new machine with it'. What that means initially is that you have alot of products that are only slightly better games in the same genre on another machine - and the titles that really take advantage of the machine come along later.

With 3DO, it's been about 18 months, and now we're starting to see, instead of a trickle, a flood of really good products. Every week or two something new is coming out.

EDGE .. You said that the Japanese launch was a success. Why wasn't it as successful in the US?

TRIP .. In japan, we had the right price, which was around $500. We also had good software in the key categories and more focus on the gameplaying capability, so more of the marketing effort was targeted at game customers.

The distribution was also geared towards stores that could distribute both software and hardware, so there was much broader distribution initially and more effective promotional and merchandising execution. It was just better preparation by everybody who was involved with 3DO.

EDGE .. So can we expect the UK launch to be as successful as the Japanese one?

TRIP .. We'll look at the japanese launch as a model and aspire to have things go as well as they did over there. And that's part of what we're trying to do right now in the us - to just straighten out the problems we've had.

EDGE .. How many 3DO units are there now in households worldwide?

TRIP .. It's approaching 100,000

EDGE .. How many do you expect to sell by this time next year?

TRIP .. Certainly over a million.

EDGE .. How many units will Panasonic have to sell to be in profit?

TRIP .. I don't really know about that one. The way we look at it is to spend what needs to be spent initially to build a longterm business, and then make profits in several years. So i don't think panasonic have a specific profit in mind. They've said that their fiscal year ends next march, and they want to sell more than a million machines in that 12-month period.

EDGE .. Which launch do you think will prove most successful for 3DO as a concept?

TRIP .. I can't tell you how important it was for us to be successful in japan. Obviously SEGA'S strongest market is the US, so it's important for us in competing with SEGA to be strong in europe and to be strong in Japan. Those are the markets that we can more easily carve out a meaningful competitive position. And with respect to nintendo, historically they're the only guys who are going to sell anything in japan. So the fact that we've been able to establish a good market gives us a good chance to have a much more diversified international business right away, and that's very attractive to software developers.

EDGE .. Which units can we expect to see in stores and when?

TRIP .. For this fall in the US, you'll see at least two models from matsushita, one low end and one high end one. And machines from Sanyo, Creative Technology and Goldstar, probably.

EDGE .. How important do you see MPEG?

TRIP .. From a competitive standpoint, since Philips has it, we can't choose not to have it. But i don't think it's that important to be quite honest.

I could show you a couple of titles that illustrate this - you can get pretty good software video without it and it's reasonably expensive to have it. It's not going to replace your VCR; you don't get the quality or the playtime for it really to become the next movie format.

EDGE .. What do you think of CD as a format for your software?

TRIP .. I think it's a really good format because its very inexpensive the music industry has driven the cost of cds down to nothing.

Although there's a lot of complaints about the performance of cd systems generally, i think there's a changing aesthetic about gameplaying, and over the next couple of years people will start to appreciate and enjoy the kinds of things they can do with 3DO.

And game designers will get cleverer at integrating video, so it doesn't seem like a totally disembodied seperate feature with nothing to do with the game it's used in.

EDGE .. Do you think that the `killer-app' is a myth?

TRIP .. I think for this kind of machine it could be because there isn't any one thing that every customer universally wants to do. It's like tv or a vcr, there's such a range of things it can do, and theres not one thing that will appeal equally to every customer.

EDGE .. Why did you drop the price?

TRIP .. We wanted to build our market more quickly. we have a certain amount of time before SEGA and SONY are shipping products and we want to make the most of it.

EDGE .. How much potential do you think there is for the price of 3DO to drop in the next six months?

TRIP .. We've already accelerated the price drop to make it happen sonner by doing a business deal with matsushita, so there's a possibility that the price could come down even further by fall - but not by very much.

EDGE .. How do you see the PC and 3DO getting along together?

TRIP .. I think that in around five years from now, a standalone cd system will be so much more powerful than a pc for playing games.

It will be so inexpensive that the idea of playing games on a pc - well, nobody would care about doing that anymore...

I see the pc market as a transition step. Today, from the point of view of the customer, you can have a videogame system that has certain limitations, or you can have a PC. But in truth pc is not really suited for playing games as such. It's just that it's cheaper to develop on a pc than on a cartridge-based machine.

EDGE .. The main critiscm of the 3DO hardware so far has concerned the CD drive. Will you or Matsushita tackle that issue?

TRIP .. You've got to seperate hardware from software. On the hardware side, our cd is twice as fast as philips CD-I and twice as fast a mega cd. It's matched up with a lot more memory in our system and alot higher processing power. When you look at specific software applications. i think developers are just now in the process of learning how to master load times to utilise the cd capability effectively.

Typical videogames today take up about two megabytes of data and we have three megabytes of main memory in the 3DO. So if you don't want to use the CD, 3DO still has a lot more memory than its rivals, in case you just want to load the game up in the systems ram.

The main point about gams development is that you want to use all the capacity that you can in any system, but you dont want to do it in a way that will slow things down to much when the application is actually underway. Doing all that on 3do is a gradually learn how to do better.

On a more general level, consumers have to see more and more examples of good software before they're going to be convinced cd is a better solution to cartridges. They also need to see prices come down, because there's no reason why in the long run that cd's will cost anywhere near what videogame cartridges do.

If you look at the manufacturing cost and licence fees of a cartridge, the total cost is over $20; and that's why retail prices are so high. With a cd system it's just a few dollars for manufacturing and licence. So you've got the opportunity to have much lower average prices to keep reducing the price to keep the product in the retail stores.