3DO Co, Redwood City, California has finally landed the big investment it has been looking for – but it comes from the company that is already its closest ally, Matsushita Electrical Industrial Co Ltd, and 3DO is effectively selling its 64-bit technology on to Matsushita. The Japanese consumer electronics giant, first compant to launch a machine to the 3DO Interactive Multiplayer design, has signed a memorandum of understanding to pay 3DO $100m plus royalties to seal a deal under which the two become partners in the development and exploitation of 3DO’s 64-bit M2 graphics technology. Matsushita gets exclusive rights to use the M2 technology to power next-generation consumer and commercial products including 64-bit video games players, Digital Video Disk players, and interactive television set-top boxes. It will also get sublicence rights from 3DO that will allow it to license M2 technology on to hardware companies and software developers. It is already in discussions with several potential partner companies and says it is likely to expand the M2 alliance over the the next two years. The exclusive licensed rights will include consumer compact disk, digital video disk, interactive television set-top box, portable, car navigation, and kiosk hardware, and Matsushita will grant back to 3DO a non-exclusive licence for coin-operated arcade games, personal computer applications, general computing, and software development tools. With 3DO’s help, Matsushita will manage a licensing programme for third-party software products and 3DO will get part of the royalties on such products. 3DO has committed to delivering all M2 custom ASIC chips, reference designs for M2 CD and M2 DVD systems, MPEG-1 and MPEG-2 decoders, hardware development systems, operating system software and software development tools. Matsushita says it expects that the first M2 consumer product, a CD-ROM games system, will be available in the second half of 1996.