I always wondered if the better approach would have been to have the 3DO company subsidize the development of the consoles in relation to how many games were sold, and maybe in relation to how many of those specific consoles were sold. e.g. if they dedicated half the licensing proceeds to paying back the consoles, and 80% of the 3DO consoles sold were Panasonic, than they'd give 40% of the licensing fees back to Panasonic.
I'm sure there are issues with this kind of scheme, but I think it's possible that by doing that it could have brought the console price down.
What was the story for the manufacturers though?
Why would you get into the 3DO business knowing that if it took off, you'd end up competing with other, potentially cheaper brands?
I guess the expectation was that it would be like CD players and VCRs, the market would be big enough to maintain a bunch of different brands.