EXHIBIT 10.52


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                                                                    CONFIDENTIAL

                                                                   EXHIBIT 10.52

Confidential  information  omitted where indicated by "[*]" and filed separately
with the Securities  Exchange  Commission pursuant to a request for confidential
treatment under Rule 406 of the Securities Act of 1933.


                            MICROSOFT LICENSING, INC.
                      XBOX(TM) PUBLISHER LICENSE AGREEMENT

This License  Agreement  (the  "Agreement")  is entered into and effective as of
July 22, 2002 (the "Effective Date") by and between MICROSOFT LICENSING, INC., a
Nevada corporation ("Microsoft"),  and THE 3DO COMPANY, a California corporation
("Licensee").


                                    RECITALS

         A. Whereas,  Microsoft and its affiliated companies develop and license
a computer game system, known as the Xbox(TM) game system; and

         B. Whereas,  Licensee is an experienced  publisher of software products
that wishes to develop and/or publish one or more software  products  running on
the Xbox game system, and to license  proprietary  materials from Microsoft,  on
the terms and conditions set forth herein.

         C.  Accordingly,  for and in  consideration of the mutual covenants and
conditions  contained  herein,  and for other good and  valuable  consideration,
receipt of which each party hereby acknowledges, Microsoft and Licensee agree as
follows:

1. DEFINITIONS

For the purposes of this Agreement, the following terms will have the respective
indicated meanings:

         1.1 "Authorized  Replicator" shall mean a software replicator certified
and approved by Microsoft for replication of Finished  Product Units that run on
Xbox.

         1.2 "Branding  Specifications"  shall mean the  specifications and such
other design  specifications  as Microsoft  may  hereafter  provide from time to
time, for using the Licensed  Trademarks on a Software Title and/or on Marketing
Materials as set forth in the Xbox Guide.

         1.3 "Break The Seal" or "BTS" shall mean a Microsoft  designed  sticker
that will be issued to the Authorized  Replicator for placement on the Packaging
Materials  as  specified  in the Xbox  Guide.  A BTS shall be  assigned  to each
Finished Product Unit that has been manufactured by an Authorized Replicator.

         1.4 "Certification"  shall mean the final stage of the approval process
following  Pre-Certification  wherein  Licensee shall deliver its proposed final
version of the Software Title and Microsoft  shall approve or disapprove of such
Software  Title for  distribution.  Certification  is  further  defined  in this
Agreement and the Xbox Guide.

         1.5 "Commercial Release" shall mean (a) with respect to Xbox, the first
distribution of an Xbox in the United States to the public for payment,  and (b)
with respect to a Software Title,  the earlier of the first  distribution of the
Software Title for payment or  distribution  of Finished  Product Units that are
not designated as beta or prerelease versions.

         1.6 "Concept"  shall mean the details of Licensee's  proposed  Software
Title including content and technical  characteristics,  target market, proposed
release  date and  development  schedule.  Concept  is  further  defined in this
Agreement and the Xbox Guide.

         1.7  "Demo  Versions"  shall  mean a  small  portion  of an  applicable
Software  Title that is provided to end users to advertise or promote a Software
Title.  Subject  to the  terms  of the  Xbox  Guide,  a Demo  Version(s)  may be
distributed on FPU for other Software Titles. Additionally a Demo Version may be
placed on a single FPU either as a  stand-alone  or with

* Confidential portion omitted and filed separately with the Commission.

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other Demo Versions for distribution to end users, provided that Microsoft shall
have prior approval over the number of units  manufactured and the price of such
units shall be free or at a suggested retail price not to exceed [*].

         1.8  "Finished  Product  Unit" or "FPU" shall mean a Software  Title in
object code form that has been affixed to a DVD disk, has passed  Certification,
and has been  approved  for  distribution  by  Microsoft.  Once the BTS has been
assigned or affixed to a FPU or its  packaging,  the FPU shall also  include its
accompanying BTS.

         1.9  "Licensed   Trademarks"   shall  mean  the  Microsoft   trademarks
identified in the Xbox Guide (that Microsoft  unilaterally  may modify from time
to time during the Term of this Agreement upon written notice to Licensee).

         1.10  "Marketing  Materials"  shall  collectively  mean  the  Packaging
Materials and the Promotional Materials.

         1.11 "Packaging  Materials" shall mean art and mechanical formats for a
Software Title including the retail packaging,  end user instruction manual with
end user license agreement and warranties,  end user warnings,  Finished Product
Unit media label, and any promotional inserts and other materials that are to be
included in the retail packaging.

         1.12  "Promotional  Materials"  shall mean press  releases,  marketing,
advertising  or  promotional  materials  related to the  Software  Title  and/or
Finished  Product  Units  (including  without  limitation  web  advertising  and
Licensee's  web pages to the extent they refer to the  Software  Title(s) or the
Finished  Product  Units) that will be used by Licensee in the  marketing of the
Software Titles or FPU.

         1.13  "Pre-Certification"  shall mean the first  required  stage of the
approval process wherein Microsoft  conducts gameplay and technical screen tests
to provide  feedback  and/or  identify  any issues that may prevent the Software
Title from being approved during the Certification  phase.  Pre-Certification is
further defined in this Agreement and the Xbox Guide.

         1.14  "Software  Title"  shall  mean the  single  software  product  as
described in the applicable  Concept  submission form that Licensee  proposes to
publish for use on Xbox. A Software  Title shall  include the  improvements  and
patches  thereto  (if and to the extent  approved by  Microsoft),  but shall not
include any "prequel" or "sequel." If Microsoft  approves one or more additional
Concept(s) for another single  software  product  proposed by Licensee to run on
Xbox,  this  Agreement,  and the  term  "Software  Title,"  shall  be  broadened
automatically  to cover the  respective  new software  product as an  additional
Software Title under this Agreement.

         1.15  "Territory"  shall be determined on a Software  Title-by-Software
Title  basis,  and shall mean such  geographic  region(s) as may be specified in
writing by  Microsoft  when the  Concept  of the  applicable  Software  Title is
approved.

         1.16 "Xbox" shall mean the first version (as of the Commercial Release)
of  Microsoft's  Xbox game  system,  including  operating  system  software  and
hardware design specifications.

         1.17 "Xbox  Guide" shall mean a document (in  physical,  electronic  or
website form) created by Microsoft that  supplements this Agreement and provides
detailed requirements regarding: the approval process,  Branding Specifications,
replication  requirements,   royalty  payment  process,   marketing  guidelines,
technical specifications,  Demo Version requirements and packaging requirements.
Microsoft may  supplement,  update and amend the Xbox Guide from time to time in
its reasonable discretion as set forth in this Agreement.

2. DEVELOPMENT; DELIVERY; APPROVAL

         2.1 Xbox Development Kit License. Contemporaneous with the execution of
this Agreement, Licensee shall enter into one or more development kit license(s)
(each an "XDK License") pursuant to which Microsoft or its affiliate may license
to Licensee  software  development  tools and hardware to assist Licensee in the
development of Software  Titles,  including  redistributable  code that Licensee
shall  incorporate  into Software  Titles,  on such terms and  conditions as are
contained  in the XDK  License.  The terms of the XDK License  are  incorporated
herein by reference.

         2.2 Xbox Guide. Licensee agrees to be bound by all provisions contained
in the then-applicable version of the "Xbox Guide," the current version of which
Microsoft  or its  affiliate  will  deliver  to  Licensee  upon its  completion.
Licensee   understands  and  agrees  that  Microsoft  may,  in  its  discretion,
supplement,  revise  and  update  the Xbox Guide from time to time and that upon
Licensee's  receipt of the applicable  supplement,  revision or updated version,
and  subject  to Section  2.4.4,  Licensee  automatically  shall be bound by all
provisions of the then-current  Xbox Guide;  Microsoft will specify in each such

* Confidential portion omitted and filed separately with the Commission.

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                                                                    CONFIDENTIAL

supplement,  revision or updated  version a  reasonable  effective  date of each
change if such change or revision is not required to be effective immediately.

         2.3 Approval Process.  The approval process is divided into four phases
comprised of Concept  approval,  Pre-Certification,  Certification and Marketing
Materials  approval.  Licensee  is  required  to submit  its  Software  Title to
Microsoft for evaluation of all four phases.  Each phase is identified below and
further defined in the Xbox Guide.

                  2.3.1 Concept. Licensee shall deliver to Microsoft a completed
Concept  submission  form (in the form  provided by Microsoft to Licensee)  that
describes the Software Title.  Evaluation of the proposed  Software Title design
will be based on criteria  including,  but not limited  to, the  following:  (i)
originality;  (ii) play breadth and depth; (iii) playability; (iv) replayability
and long-term interest; (v) theme, characters, storyline (vi) suitability to the
target  demographic;  (vii) release date;  and (viii)  overall fit with the Xbox
product portfolio.

                  2.3.1.1 If  acceptable  to  Microsoft,  following  evaluation,
         Microsoft  shall  provide  Licensee  with  a  "Concept   Summary"  that
         describes the approved  Concept.  The parties shall execute the Concept
         Summary to signify  agreement with the description of the Concept.  The
         Concept Summary shall be incorporated herein by reference and adherence
         to its terms shall be one of the bases for the grant of Certification.

                  2.3.2  Pre-Certification  Version.  At  the  Pre-Certification
submission, Licensee shall deliver to Microsoft a version of the Software Title,
that includes all current  features of the Software Title and such other content
as may be required under the Xbox Guide.  Upon receipt,  Microsoft shall conduct
technical  screen and/or other testing  consistent  with the Xbox Guide and will
subsequently  provide  Licensee with advisory  feedback  regarding such testing.
Licensee acknowledges that the  Pre-Certification and Certification  submissions
evaluate  different  aspects of the Software  Title and  therefore  satisfactory
feedback  regarding  Pre-Certification  is not an  indication  that the Software
Title will be approved following the Certification submission.

                  2.3.3  Certification.  Licensee  shall  deliver  to  Microsoft
Licensee's  proposed final release version of the applicable Software Title that
is complete and ready for manufacture and commercial distribution.  Such version
shall provide the final content rating  certification  (e.g.  ESRB,  ELSPA) with
identified  program errors  corrected,  and with any and all changes  previously
requested  by  Microsoft   implemented.   Microsoft  shall  conduct  compliance,
compatibility,  functional  and other  testing  consistent  with the Xbox  Guide
("Certification  Testing")  and shall  subsequently  provide  Licensee  with the
results of such testing.

                  2.3.3.1  Certification  for a  Software  Title may be  granted
         based upon (1) successful completion of the Certification  Testing; (2)
         conformance  with the  approved  Concept as  identified  in the Concept
         Summary;  (3)  consistency  with the goals and  objectives  of the Xbox
         console  platform;  and (4) compliance  with other  requirements as set
         forth in this Agreement.

                  2.3.3.2 Resubmissions. If warranted on the basis of its tests,
         Microsoft  shall  make  reasonable  efforts to  provide  Licensee  with
         feedback  regarding the Software Title and  modifications  that must be
         made prior to approval of the Certification  submission.  Provided that
         Licensee  has made good  faith  efforts  to  address  issues  raised by
         Microsoft, Licensee shall be given the opportunity to resubmit Software
         Titles that fail the  Certification  approval  process.  In Microsoft's
         discretion, Licensee may be charged a reasonable fee designed to offset
         the  costs   associated  with  the  testing  of  Software  Titles  upon
         resubmission.  In the event of a second submission,  Microsoft reserves
         the right to assign a new release date for the Software Title.

                  2.3.3.3  Licensee shall not distribute the Software Title, nor
         manufacture  any  FPU  intended  for  distribution,  unless  and  until
         Microsoft shall have given its approval of the Certification version of
         the Software  Title and both  parties  have  approved of the FPU as set
         forth in Section 5 of this Agreement.

                  2.3.4 Marketing Materials Approval.  Licensee shall submit all
Packaging Materials and Marketing Materials to Microsoft, and Licensee shall not
distribute  such  Marketing  Materials  (as a component of the  Software  Title,
Finished Product Unit or otherwise) unless and until Microsoft has approved them
in writing. Prior to publication of any Marketing Materials,  Licensee agrees to
incorporate  all  changes  relating  to  use  of the  Licensed  Trademarks  that
Microsoft  may  reasonably  request,  and will use its  commercially  reasonable
efforts  to  incorporate  other  changes   reasonably   suggested  by  Microsoft
(provided,   however,   that  Licensee  shall  at  all  times  comply  with  the
requirements set forth in the Xbox Guide).

* Confidential portion omitted and filed separately with the Commission.

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         2.4 Other Approval Considerations.

                  2.4.1 Other  Versions.  The parties  may  mutually  agree that
Licensee  submit  versions of the Software Title at stages of development  other
than as identified above for review and feedback by Microsoft. Such review shall
be within the  discretion of Microsoft and may require the payment of processing
fees by Licensee to offset the costs associated with the review of such Software
Titles.

                  2.4.2 Content  Rating.  For those  Territories  that utilize a
content rating system,  Microsoft will not grant final Certification approval to
a Software Title unless and until  Licensee  shall have obtained,  at Licensee's
sole cost, a rating not higher than "Mature  (17+)" or its  equivalent  from the
appropriate  rating bodies for the applicable  Territory (such as, ESRB,  ELSPA,
etc.) and/or any and all other independent content rating  authority/authorities
reasonably  designated  by  Microsoft.  Licensee  shall make any  changes to the
Software  Title  required to obtain a rating not higher than "Mature  (17+)" (or
its equivalent).  In no event shall Licensee distribute any Software Title under
an "Adults Only" or higher (or  equivalent)  rating.  Licensee shall include the
applicable  rating(s)  prominently on Finished Product Units, in accordance with
the applicable rating body guidelines. For those Territories that do not utilize
a content rating system (e.g.  Japan),  Microsoft shall not approve any Software
Title that,  in its  opinion,  contains  excessive  sexual  content or violence,
inappropriate  language or other elements deemed unsuitable for the Xbox console
platform.

                  2.4.3 Demo Versions.  Unless separately  addressed in the Xbox
Guide,  all rights,  obligations  and approvals  set forth in this  Agreement as
applying to Software  Titles shall  separately  apply to its Demo Version.  Demo
Versions may not be distributed by Licensee until granted Certification approval
by Microsoft.

                  2.4.4  Changes  of   Requirements   by   Microsoft.   Licensee
acknowledges  that the Xbox Guide is an evolving  document and subject to change
during the Term of this Agreement.  Notwithstanding the prospect of such change,
Microsoft  agrees that except in  circumstances  where (a) such change is deemed
vitally  important  to the  success of the Xbox  platform  (e.g.  changes due to
piracy,  technical failure) or (b) such change will not add significant  expense
to  the  Software  Title's  development,   then  (i)  after  completion  of  the
Pre-Certification  by Microsoft,  Licensee will not be obligated to comply, with
respect  to such  Software  Title  only,  with any  subsequent  changes  made by
Microsoft to the technical or content  requirements  for Software  Titles in the
Xbox Guide;  and (ii) subject to the  immediately  preceding  clause any changes
made by  Microsoft  in  Branding  Specifications  or other  Marketing  Materials
requirements after final  Certification of a Software Title by Microsoft will be
effective as to such Software Title only on a "going forward" basis (i.e.,  only
to such Marketing  Materials  and/or Finished  Product Units as are manufactured
after Microsoft notifies Licensee of the change).

                  2.4.4.1  Notwithstanding  the foregoing (i) and (ii), Licensee
         shall comply with such changes to the Xbox Guide in the event Microsoft
         agrees to pay for Licensee's direct, out-of-pocket expenses necessarily
         incurred as a result of its retrospective compliance with the change.

                  2.4.5 Notwithstanding  Microsoft's Certification of a Software
Title,  nothing herein shall be deemed to relieve  Licensee of its obligation to
correct  material  program bugs and errors in  conformance  with the Xbox Guide,
whenever discovered (including without limitation after Commercial Release), and
Licensee  agrees to correct  such  material  bugs and errors as soon as possible
after discovery  (provided that, with respect to bugs or errors discovered after
Commercial  Release  of  the  applicable  Software  Title,   Licensee  will  use
commercially reasonable efforts to correct the bug/error in all Finished Product
Units manufactured  after discovery).  Licensee shall perform its own testing of
the  Software  Title  and  Finished  Product  Units and shall  keep  written  or
electronic  records of such testing during the Term of this Agreement and for no
less than two (2) years thereafter ("Test Records").  Upon Microsoft's  request,
Licensee shall provide  Microsoft with copies of or reasonable access to inspect
the  Test  Records,  Finished  Product  Units  and  Software  Title  (either  in
pre-release or commercial release versions, as Microsoft may request).

                  2.4.6  Compliance With Xbox Guide. In the event that Microsoft
determines,  at any time prior to the  Commercial  Release of a Software  Title,
that such Software Title does not materially  comply with the  requirements  set
forth in the Xbox Guide,  then  Microsoft  will have the right to terminate this
Agreement (subject to any applicable cure provisions contained herein),  without
cost or penalty,  upon  written  notice to Licensee  solely with respect to such
Software Title, in Microsoft's  sole  discretion and  notwithstanding  any prior
approvals given by Microsoft pursuant to this Section.

3. GRANT OF DISTRIBUTION LICENSE, LIMITATIONS

         3.1 Distribution License.

* Confidential portion omitted and filed separately with the Commission.

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                  3.1.1 Upon  Certification  of the Software Title,  approval of
the  Marketing  Materials  and the FPU test  version of the  Software  Title (as
hereafter  described)  by  Microsoft  and  subject  to the terms and  conditions
contained within this Agreement and the XDK License, Microsoft grants Licensee a
non-exclusive,   non-transferable,   license  to  distribute   Software   Titles
containing  Redistributable  and Sample Code (as defined in the XDK License) and
Security  Technology (as hereafter  defined) within the Territory in FPU form to
third parties for distribution to end users and/or directly to end users.

                  3.1.2 The  license  to  distribute  the  Software  Product  is
personal to Licensee and except for transfers of FPU through normal  channels of
distribution  (e.g.  wholesalers,  retailers)  who  will in turn  transfer  such
product to end users, absent the written approval of Microsoft, Licensee may not
sublicense  or assign its rights  under this license to other  parties.  For the
avoidance of doubt, without the written approval of Microsoft,  Licensee may not
sublicense, transfer or assign its right to distribute Software Titles or FPU to
another entity that will brand,  co-brand or otherwise  assume control over such
products as a "publisher" as that concept is typically understood in the console
game industry, except under the following conditions:  (1) the Sub-publisher has
signed a PLA and both Licensee and  Sub-publisher are and remain at all times in
good standing under each of their  respective PLAs; (2) each Software Title over
which  Sub-publisher  acquires  publishing  rights  shall be deemed a  "Software
Title" for purposes of both Licensee's and  Sub-publisher's  PLAs, and Microsoft
shall have full right and  authority  to enforce its rights with  respect to the
Software  Title(s)  against  either  or both  Licensee  and  Sub-publisher;  (3)
Licensee shall be responsible  for making  applicable  royalty  payments for the
FPUs for  which it  places  manufacturing  orders,  and  Sub-publisher  shall be
responsible  for  making  royalty  payments  for the  FPUs for  which it  places
manufacturing  orders;  provided that Licensee  shall be liable to Microsoft for
any failure by  Sub-publisher  to make royalty payments or otherwise comply with
the duties and  obligations  under the PLA;  (4) the royalty  table set forth in
Section 6.1 of the PLA shall apply to FPUs on an aggregate basis,  regardless of
whether  Licensee or  Sub-publisher  is responsible  for the  manufacturing  and
royalty   payments   therefore,   and  Microsoft  shall  be  entitled  to  share
manufacturing  information relating to the Software Title(s) among both Licensee
and  Sub-publisher  in furtherance of this  subsection  (4); and (5) Microsoft's
receipt,  upon the earlier of (i) the effective  date of the  agreement  between
Licensee  and  Sub-publisher,  or (ii)  sixty  (60)  days  prior to  authorizing
Sub-publisher  to manufacture  any Software  Title(s),  of written notice of the
sub-publishing  relationship,  which notice shall also include  confirmation  by
Licensee that the foregoing  conditions  have been met,  along with a summary of
the  scope and  nature of the  sub-publishing  relationship  with  Sub-publisher
including,  without  limitation,  as between Licensee and  Sub-publisher,  which
party will be responsible for Certification of the Software Title(s),  a list of
the Software Title(s) for which  Sub-publisher has acquired  publishing  rights,
the  Territory(ies)  for  which  such  rights  were  granted,  and  the  term of
Licensee's agreement with Sub-publisher.

         3.2 EULA and End User Rights. As set forth in the Xbox Guide, Microsoft
may require that Licensee distribute (directly or indirectly) the Software Title
to end users subject to an end user license  agreement  ("EULA") in a form to be
approved by Microsoft.  Microsoft will have the right to modify its requirements
for the EULA at any time, in its discretion and Licensee shall implement, at its
sole  cost,  all such new  requirements  as soon as  reasonably  possible  after
receiving written notice from Microsoft of such required modifications. Licensee
may only  grant  end users the  right to make  personal,  non-commercial  use of
Software Titles. Provided that Microsoft has approved of private network play in
the  Concept  Summary,  Licensee  may grant end users the right to use  Software
Titles over a private network utilizing a Microsoft licensed "System Link Cable"
that  connects  multiple  Xbox's  provided  that  each  end  user is the  lawful
possessor  of  a  lawfully  made  copy  of  the  Software  Title,   the  use  is
noncommercial in nature and otherwise  complies with  requirements  found in the
Xbox Guide.

         3.3  No  Electronic  Transmission;  No  Online  Activities.  As of  the
Effective Date,  Microsoft is exploring  several options for the use of Xbox for
online gameplay. Until such time as Microsoft grants Licensee online rights by a
separate license agreement, Licensee may not broadcast, transmit, allow users to
access,  or  otherwise  distribute  Software  Titles by any means of  electronic
transmission, including, but not limited to, online gameplay or multiplayer.

         3.4 No Distribution  Outside the Territory.  Licensee shall  distribute
Finished  Product Units only in the  Territory.  Licensee  shall not directly or
indirectly  export  any  Finished  Product  Units from the  Territory  nor shall
Licensee  knowingly  permit or assist  any  third  party in doing so,  nor shall
Licensee  distribute  Finished Product Units to any person or entity that it has
reason to believe may  re-distribute or sell such Finished Product Units outside
the Territory.

         3.5 No  Reproduction  of Finished  Product Units Except by Microsoft or
Authorized Replicators. Licensee acknowledges that this Agreement does not grant
Licensee the right to reproduce or otherwise  manufacture Finished Product Units
itself,  or on  its  behalf,  other  than  through  Microsoft  or an  Authorized
Replicator.  Licensee must use Microsoft or an Authorized  Replicator to produce
Finished Product Units, pursuant to Section 5.

* Confidential portion omitted and filed separately with the Commission.

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         3.6 No Reverse Engineering.  Licensee may utilize and study the design,
performance  and  operation  of Xbox solely for the purposes of  developing  the
Software Title.  Notwithstanding the foregoing,  Licensee shall not, directly or
indirectly,  reverse engineer or aid or assist in the reverse engineering of all
or any  part of Xbox  except  and  only to the  extent  that  such  activity  is
expressly  permitted by applicable law notwithstanding  this limitation.  In the
event  applicable  law grants  Licensee  the right to reverse  engineer the Xbox
notwithstanding  this limitation,  Licensee shall provide Microsoft with written
notice  prior  to such  reverse  engineering  activity,  information  sufficient
regarding Licensee's intended method of reverse engineering, its purpose and the
legal authority for such activity and shall afford Microsoft a reasonable period
of time before initiating such activity in order to evaluate the activity and/or
challenge  the  reverse   engineering   activity  with  the  appropriate   legal
authorities. Licensee shall refrain from such reverse engineering activity until
such time as any legal  challenge  is  resolved  in  Licensee's  favor.  Reverse
engineering includes, without limitation,  decompiling,  disassembly,  sniffing,
peeling semiconductor components, or otherwise deriving source code. In addition
to  any  other  rights  and  remedies   that   Microsoft   may  have  under  the
circumstances,  Licensee  shall be  required  in all cases to pay  royalties  to
Microsoft in accordance  with Section 7 below with respect to any games or other
products that are developed, marketed or distributed by Licensee, and derived in
whole or in part from the reverse  engineering  of Xbox or any  Microsoft  data,
code or other material.

         3.7 Reservation of Rights. Microsoft reserves all rights not explicitly
granted herein.

         3.8  Ownership  of the  Software  Titles.  Except for the  intellectual
property  supplied by Microsoft to Licensee  (including  without  limitation the
licenses  in the  Licensed  Trademarks  hereunder  and the  licenses  in certain
software and hardware granted by an XDK License), ownership of which is retained
by Microsoft, insofar as Microsoft is concerned, Licensee will own all rights in
and to the Software Titles.

         3.9 Use of  Identified  Software.  Licensee's  rights set forth in this
Agreement  are  conditioned  upon  Licensee  (a)  not  incorporating  Identified
Software  (as defined  below) into or  combining  Identified  Software  with the
Software Title; (b) not distributing Identified Software in conjunction with the
Software Title; and (c) not using Identified  Software in the development of the
Software Title.  "Identified Software" means software which is licensed pursuant
to terms that (i) create,  or purport to create,  obligations for Microsoft with
respect to the Software Title or (ii) grant,  or purport to grant,  to any third
party any  rights or  immunities  under  Microsoft's  intellectual  property  or
proprietary rights in the Software Title. Identified Software includes,  without
limitation,  any  software  that  requires as a condition  of use,  modification
and/or  distribution  of such software that other  software  incorporated  into,
derived from or  distributed  with such software be (a) disclosed or distributed
in source code form; (b) be licensed for the purpose of making derivative works;
or (c) be redistributable at no charge.

4. RIGHTS AND RESTRICTIONS

         4.1 Trademarks.

                  4.1.1  License.  In each  Software  Title,  FPU and  Marketing
Materials, Licensee shall incorporate the Licensed Trademarks and include credit
and  acknowledgement  to  Microsoft  as set forth in the Xbox  Guide.  Microsoft
grants to Licensee a  non-exclusive,  non-transferable,  personal license to use
the Licensed  Trademarks  on Software  Title(s),  FPU, and  Marketing  Materials
according  to the  Xbox  Guide  and  other  conditions  herein,  and  solely  in
connection with marketing, sale, and distribution in the Territory.

                  4.1.2 Limitations. Licensee is granted no right, and shall not
purport,  to permit any third party to use the Licensed Trademarks in any manner
without  Microsoft's prior written consent.  Licensee's  license to use Licensed
Trademarks  in  connection  with the Software  Title and Finished  Product Units
shall not extend to the merchandising or sale of related or promotional products
under the Licensed Trademarks.

                  4.1.3 Branding Specifications.  Licensee's use of the Licensed
Trademarks (including without limitation in Finished Product Units and Marketing
Materials) shall comply with the Branding  Specifications  set forth in the Xbox
Guide.  Licensee shall not use Licensed Trademarks in association with any third
party trademarks in a manner that might suggest  co-branding or otherwise create
potential  confusion  as to  source  or  sponsorship  of the  Software  Title or
Finished Product Units or ownership of the Licensed  Trademarks.  Upon notice or
other discovery of any non-conformance  with the requirements or prohibitions of
this section,  Licensee shall promptly  remedy such  non-conformance  and notify
Microsoft of the non-conformance and remedial steps taken.

                  4.1.4  Protection  of  Licensed  Trademarks.   Licensee  shall
cooperate and assist Microsoft,  at Microsoft's reasonable expense in protecting
and  maintaining  Microsoft's  rights  in  the  Licensed  Trademarks,  including
preparation  and  execution  of  documents  necessary  to register  the Licensed
Trademarks or record this Agreement, and giving

* Confidential portion omitted and filed separately with the Commission.

                                       6
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                                                                    CONFIDENTIAL

immediate  notice  to  Microsoft  of  potential  infringement  of  the  Licensed
Trademarks.  Microsoft  shall have the sole right to and in its sole  discretion
may,  commence,  prosecute  or defend,  and  control any action  concerning  the
Licensed  Trademarks.  Licensee  shall  not  during  the Term of this  Agreement
contest  the  validity  of, by act or  omission  jeopardize,  or take any action
inconsistent with,  Microsoft's rights or goodwill in the Licensed Trademarks in
any country,  including attempted registration of any Licensed Trademark, or use
or attempted registration of any mark confusingly similar thereto.

                  4.1.5 Ownership.  Licensee acknowledges  Microsoft's ownership
of all  Licensed  Trademarks,  and all  goodwill  associated  with the  Licensed
Trademarks.  Use of the Licensed Trademarks shall not create any right, title or
interest therein in Licensee's favor.  Licensee's use of the Licensed Trademarks
shall inure solely to the benefit of Microsoft.

                  4.1.6 No Bundling  with  Unapproved  Peripherals,  Products or
Software.  Licensee  shall not market or distribute FPU bundled with any product
or service,  nor shall  Licensee  knowingly  permit or assist any third party in
such bundling,  without  Microsoft's prior written consent.  Notwithstanding the
foregoing,  Licensee  may market or  distribute  a) FPU bundled  with a Software
Title(s) that has been previously certified for distribution by Microsoft; or b)
FPU bundled with a peripheral  product (e.g. game pads) that has been previously
licensed as an "Xbox Licensed  Peripheral" by Microsoft,  without  obtaining the
written permission of Microsoft.

5. MANUFACTURING

         5.1 Approved  Replicators.  Licensee  shall  retain only an  Authorized
Replicator(s) to manufacture all Finished Product Units.

         5.2  Terms  of Use  of  Authorized  Replicator.  Licensee  will  notify
Microsoft in writing of the identity of the applicable Authorized Replicator and
unless    Microsoft    agrees     otherwise,     the    agreement    for    such
manufacturing/replication  services  shall be as  negotiated by Licensee and the
applicable Authorized Replicator, subject to the following requirements:

                  (a)  Microsoft,  and not Licensee,  will provide to the single
applicable Authorized Replicator the final release version of the Software Title
and all specifications required by Microsoft for the manufacture of the Finished
Product Units including, without limitation, the Security Technology (as defined
in Section 5.4 below); Licensee will be responsible for preparing and delivering
to the Authorized Replicator all other items required for manufacturing Finished
Product Units including Packaging Materials associated with the Finished Product
Units;

                  (b) Licensee shall cause the  Authorized  Replicator to create
several test versions of FPU ("Verification  Version(s)") that shall be provided
to both Microsoft and Licensee for evaluation.  Prior to full manufacture of FPU
by  the  Authorized  Replicator,   both  parties  shall  have  approved  of  the
Verification  Version.  Microsoft's  approval shall be a condition  precedent to
manufacture,  however  Licensee  shall grant the final  approval  and shall work
directly with the Authorized  Replicator  regarding the production run. Licensee
agrees that all Finished Product Units must be replicated in conformity with all
of  the  quality  standards  and  manufacturing  specifications,   policies  and
procedures that Microsoft requires of its Authorized  Replicators,  and that all
so-called  "adders"  must be  approved  by  Microsoft  prior  to  packaging  (in
accordance with Section 2.3.4 above);

                  (c) Throughout the manufacturing  process and upon the request
of  Microsoft,  Licensee  shall  cause  the  Authorized  Replicator  to  provide
additional Verification Versions of the FPU for evaluation by Microsoft;

                  (d) Licensee is required to use an Authorized  Replicator  for
manufacture  of FPU but may,  solely  with  respect to  Finished  Product  Units
manufactured  for  publication  in the Territory  comprising  Europe,  utilize a
different process or company for the combination of FPU with Packaging Materials
provided that such packaging process incorporates the BTS and otherwise complies
with the Xbox Guide.  Licensee shall notify Microsoft  regarding its use of such
process or company so that the parties may properly  coordinate their activities
and  approvals.  To the extent  that  Microsoft  is unable to  accommodate  such
processes  or  company,  Licensee  shall  modify its  operations  to comply with
Microsoft's requirements;

                  (e) As soon as possible following its request,  Licensee shall
provide  Microsoft with up to fifty (50) Finished Product Units and accompanying
Marketing Materials at Licensee's cost. Such units may be used in marketing,  as
product samples and for archival purposes;

                  (f) The initial manufacturing order for Finished Product Units
of each Software  Title may not be less than a number  specified by Microsoft in
the Xbox  Guide;  although  such  number may change from time to time during the
Term of this Agreement, initially it will be [*];

* Confidential portion omitted and filed separately with the Commission.

                                       7
<PAGE>

                                                                    CONFIDENTIAL

                  (g)  For   purposes  of  assisting   in  the   scheduling   of
manufacturing resources,  monthly, or as otherwise requested by Microsoft in its
reasonable  discretion,  Licensee  shall  provided  Microsoft with monthly sales
forecasts showing sales projections twelve to eighteen months out for FPU;

                  (h) Microsoft shall have no  responsibility  for ensuring that
Finished Product Units are free of all defects;

                  (i) Licensee will use commercially reasonable efforts to cause
the  Authorized  Replicator  to deliver to Microsoft  true and accurate  monthly
statements of Finished  Product Units  manufactured in each calendar month, on a
Software  Title-by-Software  Title  basis and in  sufficient  detail to  satisfy
Microsoft,  within fifteen (15) days after the end of the applicable  month, and
Microsoft  will have  reasonable  audit  rights to  examine  the  records of the
Authorized   Replicator   regarding   the  number  of  Finished   Product  Units
manufactured;

                  (j)  Subject to the  approval  of  Licensee  that shall not be
unreasonably  withheld,  Microsoft  shall have the right to have included in the
packaging of Finished Product Units such  promotional  materials for Xbox and/or
other Xbox  products or services as Microsoft  may  determine in its  reasonable
discretion.  Microsoft  will be  responsible  for  delivering to the  Authorized
Replicator all such promotional materials as it desires to include with Finished
Product Units,  and any  incremental  insertion costs relating to such marketing
materials will be borne by Microsoft;

                  (k) Microsoft  does not guarantee any level of  performance by
the Authorized Replicators, and Microsoft will have no liability to Licensee for
any  Authorized  Replicator's  failure  to  perform  its  obligations  under any
applicable  agreement  between  Microsoft and such Authorized  Replicator and/or
between Licensee and such Authorized Replicator;

                  (l) Prior to placing  an order with a  replicator/manufacturer
for Finished  Product  Units,  Licensee  shall confirm with  Microsoft that such
entity  is  an  Authorized  Replicator;  Microsoft  will  endeavor  to  keep  an
up-to-date list of Authorized  Replicators in the Xbox Guide.  Licensee will not
place any order for Finished  Product  Units with any entity that is not at such
time an Authorized Replicator;

                  (m)  Licensee  acknowledges  that  Microsoft  may  charge  the
Authorized Replicator fees for rights,  services or products associated with the
manufacture of FPU and that the agreement with the Authorized  Replicator grants
Microsoft  the  right  to  instruct  the  Authorized  Replicator  to  cease  the
manufacture of FPU and/or  prohibit the release of FPU to Licensee or its agents
in the event  Licensee is in breach of this  Agreement  or any credit  agreement
(the "Credit Agreement") entered into by Licensee and Microsoft.

         5.3 Approval of New Authorized  Replicator.  If Licensee  requests that
Microsoft  certify  and  approve a third  party  replicator  that is not then an
Authorized  Replicator,  Microsoft  will  consider  such  request in good faith.
Licensee acknowledges and agrees that Microsoft may condition  certification and
approval  of  such  third  party  on the  execution  of an  agreement  in a form
satisfactory  to  Microsoft  pursuant to which such third party agrees to strict
quality  standards,   non-disclosure  requirements,  license  fees  for  use  of
Microsoft  intellectual  property and trade  secrets,  and procedures to protect
Microsoft's  intellectual property and trade secrets.  Notwithstanding  anything
contained  herein,  Licensee  acknowledges  that  Microsoft  is not  required to
certify,  maintain the certification or approve any particular third party as an
Authorized  Replicator,  and that the  certification and approval process may be
time-consuming.

         5.4 Security. Microsoft will have the right to add to the final release
version of the Software  Title  delivered by Licensee to  Microsoft,  and to all
Finished  Product Units,  such digital  signature  technology and other security
technology  and  copyright  management  information   (collectively,   "Security
Technology")  as Microsoft may determine to be necessary,  and/or  Microsoft may
modify  the  signature  included  in any  Security  Technology  included  in the
Software Title by Licensee at Microsoft's  discretion.  Additionally,  Microsoft
may add Security  Technology  that prohibits the play of Software Titles on Xbox
units  manufactured  in a region  or  country  different  from the  location  of
manufacture of the respective Finished Product Units.

* Confidential portion omitted and filed separately with the Commission.

                                       8
<PAGE>

                                                                    CONFIDENTIAL

6. MARKETING, SALES AND SUPPORT

         6.1 Licensee Responsible.  As between Microsoft and Licensee,  Licensee
shall be solely  responsible for marketing and sales of the Software Title,  and
for  providing  technical and all other support to the end users of the Finished
Product  Units.  Licensee will provide all end users of Software  Titles contact
information   (including  without  limitation   Licensee's  street  address  and
telephone number, and the applicable  individual/group  responsible for customer
support).  Such end user support  will be  consistent  with the  then-applicable
console game  industry  standards  and  guidelines  set forth in the Xbox Guide.
Licensee   acknowledges   and  agrees  that   Microsoft  will  have  no  support
responsibilities  whatsoever to end users of the Software  Title or with respect
to Finished Product Units.

         6.2  Warranty.  Licensee  shall  provide the  original  end user of any
Finished  Product  Unit a minimum  ninety  (90) day  limited  warranty  that the
Finished Product Unit will perform in accordance with its user  documentation or
Licensee  will  refund  the  purchase  price or provide a  replacement  Finished
Product  Unit at no charge.  Licensee  may offer  additional  warranty  coverage
consistent  with the traditions and practices of console  publishers  within the
Territory or as otherwise required by local law.

         6.3 Recall.  Notwithstanding anything to the contrary contained in this
Agreement,  in the event of a  material  defect in a Software  Title  and/or any
Finished  Product Units,  which defect in the  reasonable  judgment of Microsoft
would  significantly  impair the  ability  of an end user to play such  Software
Title or Finished  Product  Unit or would  adversely  affect the gameplay of the
Xbox,  Microsoft  may require  Licensee  to recall  Finished  Product  Units and
undertake  prompt repair or replacement  of such Software Title and/or  Finished
Product Units.

         6.4 Software  Title  License.  The parties  shall  mutually  agree to a
pre-approval  process  pursuant  to  which  Licensee  shall  grant  Microsoft  a
fully-paid,  royalty-free,  non-exclusive  license (i) to  publicly  perform the
Software Titles at conventions,  events,  trade shows, press briefings,  and the
like;  (ii) to use the title of the  Software  Title,  and screen shots from the
Software Title, in advertising  and  promotional  material  relating to Xbox and
related  Microsoft  products and  services,  as Microsoft  may  reasonably  deem
appropriate;  and (iii) distribute Demo Versions with the official Xbox magazine
or other  marketing  opportunities.  Nothing  herein  shall be deemed to require
Microsoft to obtain approval for uses of Licensee Software Titles when such uses
are "referential" or "fair use" as determined by applicable law.

7. PAYMENTS

         7.1 Royalties. Licensee shall pay Microsoft nonrefundable royalties, on
a  Software  Title-by-Software  Title  basis,  for each  Finished  Product  Unit
manufactured during the term, in accordance with the following table:

                                  [*]    [*]

                                  [*]    [*]

                                  [*]    [*]

                                  [*]    [*]

                                  [*]    [*]

                                  [*]    [*]

Notwithstanding  the  foregoing,  no royalties  will be payable  hereunder  with
respect to any Demo Versions.

         7.2  Royalty  Payments.  Licensee  shall  have the option of paying the
above royalties in US Dollars,  Japanese Yen or Euros, according to the terms of
this Section.  By designating the appropriate box below,  Licensee may choose to
pay royalties on either a  "Worldwide"  or "Regional"  basis.  Such  designation
shall be binding  throughout  the Term of this

* Confidential portion omitted and filed separately with the Commission.

                                       9
<PAGE>

                                                                    CONFIDENTIAL

Agreement for all of Licensee's  Software Titles. If Licensee elects to pay on a
Worldwide  basis,  it shall pay royalties in US Dollars  regardless of where the
Finished  Product Units are distributed or  manufactured.  If Licensee elects to
pay on a Regional basis,  it shall pay royalties in US Dollars,  Japanese Yen or
Euros in  accordance  with the table set forth in Section 7.1 but subject to the
rest of this Section 7.2.

                  7.2.1 If the Authorized Replicator  manufacturing the Finished
Product Units is located in Japan, Singapore, Malaysia or Taiwan, Licensee shall
pay its royalty denominated in Japanese Yen for such Finished Product Units.

                  7.2.2 If the Authorized Replicator  manufacturing the Finished
Product  Units  is  located  within  Europe,  Licensee  shall  pay  its  royalty
denominated in Euros for such Finished Product Units.

                  7.2.3 If the Authorized Replicator  manufacturing the Finished
Product Units is located in any other  country or region of the world,  Licensee
shall pay its royalty denominated in US Dollars for such Finished Product Units.

                  7.2.4   Notwithstanding  the  foregoing,   in  the  event  the
conversion ratio for either Yen or Euros to Dollars, as described by the Reuters
news  service as set forth on  "Reuters.com"  (as of 4:00 p.m.  London,  England
time),  falls  outside the foreign  exchange  trading  range as set forth in the
chart below,  for a period of time greater  than thirty (30)  consecutive  days,
Microsoft  may then  readjust  the royalty  amounts set forth in Section 7.1 for
that  currency.  Such  readjustments  shall be made in  Microsoft's  good  faith
discretion according to its normal practices.

                                       [*]
                                 [*]           [*]
                      [*]        [*]           [*]
                      [*]        [*]           [*]

                             Worldwide _____________ (initials)

                             Regional  _____________ (initials)

                          Choose only one of the above

         7.3  Payment  Process.  Licensee  shall  be  required  to  pre-pay  all
royalties  owed to Microsoft  for the planned  manufacture  of Finished  Product
Units by its Authorized Replicator.  Licensee shall not authorize its Authorized
Replicators to begin  production  until such time as Microsoft has verified with
the  Authorized  Replicator  and Licensee that such funds have been received and
deposited. Depending upon Licensee's credit worthiness, Microsoft may, but shall
not be obligated to, offer Licensee net thirty (30) credit terms for the payment
of  royalties  due under  this  Agreement.  All  payments  shall be made by wire
transfer only, in accordance with the payment instructions set forth in the Xbox
Guide.

                  7.3.1  Billing   Address.   Licensee's   billing  address  (or
Territory-specific addresses, as the case may be) is as follows:

Territory comprising United States:

Name:             The 3DO Company
Address:          200 Cardinal Way
                  Redwood City, CA  94063

Attention:        John Kemmerer
Email address:    john.kemmerer@3do.com
Fax:              650 385 3182
Phone:            650 385 2459

Territory comprising Europe (if different):

Name:             ______________________

* Confidential portion omitted and filed separately with the Commission.


                                       10
<PAGE>

                                                                    CONFIDENTIAL

Address:          ______________________
                  ______________________
                  ______________________

Attention:        _______________________
Email address:    _______________________
Fax:              _______________________
Phone:            _______________________

Territory comprising Japan (if different):

Name:             ______________________
Address:          ______________________
                  ______________________
                  ______________________

Attention:        _______________________
Email address:    _______________________
Fax:              _______________________
Phone:            _______________________

         7.4  Audit.  During  the Term of this  Agreement  and for  three  years
thereafter  Licensee  shall  keep all usual and  proper  records  related to its
performance (and any Authorized  Replicators/subcontractor's  performance) under
this Agreement,  including but not limited to audited  financial  statements and
support for all  transactions  related to the ordering,  production,  inventory,
distribution and billing/invoicing  information. Such records, books of account,
and entries  shall be kept in  accordance  with  generally  accepted  accounting
principles.  Microsoft  may audit  and/or  inspect  the  Licensee's  records and
facilities  in order to  verify  Licensee's  compliance  with the  terms of this
Agreement. Microsoft reserves the right, upon twenty-four (24) hours' notice, to
audit Licensee's records and consult with Licensee's accountants for the purpose
of verifying  Licensee's  compliance  with the terms of this Agreement and for a
period of two (2) years thereafter.  Any such audit shall be made by Microsoft's
internal  audit team or any Microsoft  designee,  and shall be conducted  during
regular  business  hours  at  the  Licensee's  (or  any  applicable   Authorized
Replicator's/subcontractor's)  offices with notice. Any such audit shall be paid
for by Microsoft unless material  discrepancies are disclosed.  "Material" shall
mean the lesser of [*] or [*]  percent  [*] of the  royalties  due to  Microsoft
within the audit  period.  If material  discrepancies  are  disclosed,  Licensee
agrees to pay Microsoft for the reasonable  costs  associated with the audit, as
well as reimburse Microsoft for all under-reported  amounts,  plus interest at a
rate of [*] per annum.

         7.5 Taxes.

                  7.5.1 The royalties to be paid by Licensee to Microsoft herein
do not include any  foreign,  U.S.  federal,  state,  local,  municipal or other
governmental taxes, customs and other duties,  levies, fees, excises or tariffs,
arising as a result of or in connection with the transactions contemplated under
this Agreement  including,  without limitation,  any state or local sales or use
taxes or consumption tax or any value added tax or business  transfer tax now or
hereafter  imposed  on the  provision  of goods  and  services  to  Licensee  by
Microsoft  under this  Agreement,  regardless of whether the same are separately
stated by Microsoft  (all such taxes and other charges being  referred to herein
as "Taxes").  All Taxes (and any penalties,  interest, or other additions to any
Taxes),  with the exception of taxes imposed on  Microsoft's  net income or with
respect to Microsoft's property ownership, shall be the financial responsibility
of Licensee.  Licensee agrees to indemnify,  defend and hold Microsoft  harmless
from any such  Taxes or  claims,  causes of action,  costs  (including,  without
limitation,  reasonable attorneys' fees) and any other liabilities of any nature
whatsoever related to such Taxes.

                  7.5.2 Licensee will pay all applicable value added,  sales and
use taxes and other  taxes  levied on it by a duly  constituted  and  authorized
taxing authority  payments made to Microsoft by Licensee under this Agreement or
any  transaction  related  thereto in each country in which the services  and/or
property are being provided or in which the transactions  contemplated hereunder
are otherwise  subject to tax,  regardless of the method of delivery.  Any taxes
that are owed by Licensee,  (i) as a result of entering into this  Agreement and
the  payment  of the  fees  hereunder,  (ii) are  required  or  permitted  to be
collected from Licensee by Microsoft  under  applicable law, and (iii) are based
upon the amounts  payable  under this  Agreement  (such taxes  described in (i),
(ii), and (iii) above the "Collected  Taxes"),  shall be remitted by Licensee to
Microsoft,  whereupon,  upon  request,  Microsoft  shall provide to Licensee tax
receipts  or other  evidence  indicating  that such  Collected  Taxes  have been
collected  by  Microsoft  and  remitted  to the  appropriate  taxing  authority.
Licensee  may  provide to

* Confidential portion omitted and filed separately with the Commission.

                                       11
<PAGE>

                                                                    CONFIDENTIAL

Microsoft an exemption  certificate  acceptable to Microsoft and to the relevant
taxing authority  (including without  limitation a resale  certificate) in which
case,  after the date upon which such  certificate  is received in proper  form,
Microsoft shall not collect the taxes covered by such certificate.

                  7.5.3 If, after a  determination  by foreign tax  authorities,
any  taxes  are  required  to be  withheld,  on  payments  made by  Licensee  to
Microsoft, Licensee may deduct such taxes from the amount owed Microsoft and pay
them to the appropriate taxing authority;  provided however, that Licensee shall
promptly secure and deliver to Microsoft an official  receipt for any such taxes
withheld  or other  documents  necessary  to  enable  Microsoft  to claim a U.S.
Foreign Tax Credit.  Licensee  will make  certain  that any taxes  withheld  are
minimized to the extent possible under applicable law.

                  7.5.4 This Section 7.5 shall govern the treatment of all taxes
arising as a result of or in connection with this Agreement  notwithstanding any
other section of this Agreement.

8. NON-DISCLOSURE; ANNOUNCEMENTS

         8.1 Non-Disclosure  Agreement. The information,  materials and software
exchanged by the parties hereunder or under an XDK License,  including the terms
and  conditions  hereof  and  of  the  XDK  License,  shall  be  subject  to the
Non-Disclosure  Agreement dated March 20, 2002 (the "Non-Disclosure  Agreement")
between  the  parties,  which is  incorporated  herein by  reference;  provided,
however,   that  for  purposes  of  the   foregoing   Section   2(a)(i)  of  the
Non-Disclosure  Agreement shall  hereinafter  read, "[The Receiving Party shall;
(i)] Refrain from disclosing Confidential Information of the Disclosing Party to
any third  parties  for as long as such  remains  undisclosed  under  1(b) above
except as expressly provided in Sections 2(b) and 2(c) of this  [Non-Disclosure]
Agreement." In this way, all Confidential  Information  provided hereunder or by
way of the XDK  License in whatever  form (e.g.  information,  materials,  tools
and/or  software  exchanged by the parties  hereunder or under an XDK  License),
including  the  terms  and  conditions  hereof  and of the XDK  License,  unless
otherwise specifically stated, shall be protected from disclosure for as long as
it remains Confidential.

         8.2  Public  Announcements.  The  parties  contemplate  that  they will
coordinate  the issuance of initial press  releases,  or a joint press  release,
announcing  the  relationship  established  by the execution of this  Agreement.
However,  neither  party  shall  issue any such  press  release or make any such
public  announcement(s)  without the express  prior  consent of the other party,
which consent will not be  unreasonably  withheld or delayed.  Furthermore,  the
parties agree to use their commercially  reasonable efforts to coordinate in the
same manner any subsequent press releases and public  announcements  relating to
their  relationship  hereunder  prior  to  the  issuance  of the  same.  Nothing
contained in this Section 8.2 will relieve Licensee of any other  obligations it
may have under this Agreement,  including without  limitation its obligations to
seek and obtain Microsoft approval of the Marketing Materials.

         8.3 Required Public Filings.  Notwithstanding Sections 8.1 and 8.2, the
parties  acknowledge that this Agreement,  or portions thereof,  may be required
under  applicable  law to be  disclosed,  as part of or an  exhibit to a party's
required public  disclosure  documents.  If either party is advised by its legal
counsel that such  disclosure  is required,  it will notify the other in writing
and the parties will jointly seek  confidential  treatment of this  Agreement to
the maximum extent reasonably  possible,  in documents  approved by both parties
and filed with the applicable governmental or regulatory authorities.

9. TERM AND TERMINATION

         9.1 Term.  The Term of this  Agreement  shall commence on the Effective
Date and unless terminated earlier as provided herein, shall continue until [*].

         9.2 Termination for Breach.  In the event either party shall materially
fail to perform or comply with this Agreement or any provision thereof, and fail
to remedy the default  within  fifteen  (15) days after the receipt of notice to
that effect,  then the other party shall have the right,  at its sole option and
upon written  notice to the defaulting  party,  to terminate this Agreement upon
written notice.  Any notice of default  hereunder  shall be prominently  labeled
"NOTICE OF DEFAULT"; provided, however, that if the default is of Sections 3, 4,
7.1, 7.2 or 7.3 above, the Non-Disclosure Agreement, or an XDK License, then the
non-defaulting  party may  terminate  this  Agreement  immediately  upon written
notice,  without being obligated to provide a fifteen (15) day cure period.  The
rights and remedies  provided in this Section  shall not be exclusive and are in
addition to any other rights and remedies provided by law or this Agreement.  If
the uncured default is related to a particular  Software  Title,  then the party
not in  default  will have the  right,  in its  discretion,  to  terminate  this
Agreement in its entirety or with respect to the applicable Software Title.

* Confidential portion omitted and filed separately with the Commission.

                                       12
<PAGE>

                                                                    CONFIDENTIAL

         9.3  Effect  of  Termination;  Sell-off  Rights.  Upon  termination  or
expiration of this  Agreement,  Licensee shall have no further right to exercise
the rights licensed hereunder or within the XDK License and shall promptly cease
all  manufacturing of FPU through its Authorized  Replicators and, other than as
provided  below,  cease use of the Licensed  Trademarks.  Licensee  shall have a
period of [*]  following  expiration of this  Agreement,  or  termination  for a
reason  other than  Licensee's  breach,  to sell-off  its  inventory of Finished
Product Units existing as of the date of termination or expiration,  after which
sell-off  period  Licensee  shall  immediately  return all FPU to an  Authorized
Replicator for  destruction.  Licensee shall cause the Authorized  Replicator to
destroy all FPU and issue a Certificate  of  Destruction  to  Microsoft.  All of
Licensee's  obligations under this Agreement shall continue to apply during such
six-month  sell-off  period.  If this  Agreement is terminated due to Licensee's
breach,  Licensee shall  immediately  destroy all Finished Product Units not yet
distributed  to  Licensee's  distributors,  dealers  and/or  end users and shall
require  all  those  distributing  the FPU over  which it has  control  to cease
distribution.  If requested by  Microsoft in writing,  Licensee  will deliver to
Microsoft the written  certification  by an officer of Licensee  confirming  the
destruction of Finished Product Units required hereunder.

         9.4 Survival.  The  following  provisions  shall survive  expiration or
termination  of this  Agreement:  1, 3.6, 6.1, 6.2, 6.3, 7, 9.3, 9.4, 10, 11 and
13.

10. WARRANTIES

         10.1 Licensee. Licensee warrants and represents that:

                  10.1.1 It has the full power to enter into this Agreement;

                  10.1.2 It has not  previously and will not grant any rights to
any third  party  that are  inconsistent  with the rights  granted to  Microsoft
herein; and

                  10.1.3 The Software Title,  Finished Product Units,  Marketing
Materials  (excluding  those  portions that consist of the Licensed  Trademarks,
Security Technology and redistributable components of the so-called "XDK" in the
form as delivered  to Licensee by  Microsoft  pursuant to an XDK License) do not
and will not  infringe  upon or  misappropriate  any third party trade  secrets,
copyrights, trademarks, patents, publicity, privacy or other proprietary rights.

                  10.1.4  Licensee  warrants that it shall  maintain  sufficient
insurance  coverage  to  enable  it to  meet  its  obligations  created  by this
Agreement and by law. During the Term of this Agreement,  and unless the parties
mutually agree otherwise, Licensee agrees to maintain no less insurance coverage
than Licensee's insurance coverage as of the Effective Date of this Agreement.

                  10.1.5 It shall not (a)  incorporate  Identified  Software (as
defined in 3.9) into or combine Identified Software with the Software Title; (b)
distribute  Identified  Software in conjunction with the Software Title; and (c)
use Identified Software in the development of the Software Title.

         10.2 Microsoft. Microsoft warrants and represents that:

                  10.2.1 It has the full power to enter into this Agreement; and

                  10.2.2 It has not  previously and will not grant any rights to
any third  party  that are  inconsistent  with the rights  granted  to  Licensee
herein.

         10.3  DISCLAIMER.  EXCEPT  AS  EXPRESSLY  STATED  IN THIS  SECTION  10,
MICROSOFT  PROVIDES ALL MATERIALS  (INCLUDING  WITHOUT  LIMITATION  THE SECURITY
TECHNOLOGY) AND SERVICES HEREUNDER ON AN "AS IS" BASIS, AND MICROSOFT  DISCLAIMS
ALL OTHER  WARRANTIES  UNDER THE  APPLICABLE  LAWS OF ANY  COUNTRY,  EXPRESS  OR
IMPLIED,  REGARDING THE MATERIALS AND SERVICES IT PROVIDES HEREUNDER,  INCLUDING
ANY IMPLIED WARRANTIES OF MERCHANTABILITY,  FITNESS FOR A PARTICULAR PURPOSE, OR
WARRANTY  OF  FREEDOM  FROM  COMPUTER  VIRUSES.  WITHOUT  LIMITATION,  MICROSOFT
PROVIDES NO WARRANTY OF NON-INFRINGEMENT.

         10.4 EXCLUSION OF INCIDENTAL,  CONSEQUENTIAL AND CERTAIN OTHER DAMAGES.
TO THE MAXIMUM EXTENT  PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL MICROSOFT,
ITS  AFFILIATES,   LICENSORS  OR  ITS  SUPPLIERS  BE  LIABLE  FOR  ANY  SPECIAL,
INCIDENTAL,  PUNITIVE OR

* Confidential portion omitted and filed separately with the Commission.

                                       13
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                                                                    CONFIDENTIAL

CONSEQUENTIAL  DAMAGES  OF ANY  KIND  OR  NATURE  WHATSOEVER,  RELATING  TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING WITHOUT LIMITATION,
LOST  PROFITS OR LOST  GOODWILL  AND  WHETHER  BASED ON BREACH OF ANY EXPRESS OR
IMPLIED  WARRANTY,  BREACH OF CONTRACT,  TORT  (INCLUDING  NEGLIGENCE) OR STRICT
LIABILITY,  REGARDLESS OF WHETHER SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGE OR IF SUCH DAMAGE COULD HAVE BEEN REASONABLY FORESEEN.

         10.5  LIMITATION  OF  LIABILITY.  THE MAXIMUM  LIABILTY OF MICROSOFT TO
LICENSEE OR ANY THIRD PARTY ARISING OUT OF THIS AGREEMENT SHALL BE THE LESSER OF
TOTAL THE AMOUNTS  RECEIVED  BY  MICROSOFT  HEREUNDER  OR FIVE  MILLION  DOLLARS
($5,000,000).  FURTHERMORE,  UNDER NO CIRCUMSTANCES SHALL MICROSOFT BE LIABLE TO
LICENSEE FOR ANY DAMAGES  WHATSOEVER  WITH RESPECT TO ANY CLAIMS RELATING TO THE
SECURITY TECHNOLOGY AND/OR ITS AFFECT ON ANY SOFTWARE TITLE.

11. INDEMNITY

         11.1  Indemnification.  A  claim  for  which  indemnity  may be  sought
hereunder shall be referred to as a "Claim."

                  11.1.1 Mutual Indemnification.  Subject to Sections 10.3, 10.4
and 10.5,  each party hereby  agrees to  indemnify,  defend,  and hold the other
party harmless from any and all claims,  demands,  costs,  liabilities,  losses,
expenses and damages  (including  reasonable  attorneys' fees, costs, and expert
witnesses' fees) arising out of or in connection with any claim that, taking the
claimant's  allegations to be true, would result in a breach by the indemnifying
party of any of its warranties and covenants set forth in Section 10.

                  11.1.2   Additional   Licensee   Indemnification   Obligation.
Licensee further agrees to indemnify,  defend,  and hold Microsoft harmless from
any and all claims,  demands, costs,  liabilities,  losses, expenses and damages
(including  reasonable  attorneys'  fees,  costs,  and expert  witnesses'  fees)
arising out of or in connection  with any claim  regarding any Software Title or
Finished  Product  Unit,  including  without  limitation  any claim  relating to
quality,  performance,  safety or  conformance  with the software title approval
process,  or arising out of Licensee's use of the Licensed  Trademarks in breach
of this Agreement.

         11.2 Notice and Assistance.  The indemnified  party shall:  (i) provide
the  indemnifying  party  reasonably  prompt  notice in writing of any Claim and
permit the  indemnifying  party to answer and defend such Claim through  counsel
chosen  and  paid by the  indemnifying  party;  and  (ii)  provide  information,
assistance and authority to help the  indemnifying  party defend such Claim. The
indemnified  party  may  participate  in the  defense  of any  Claim  at its own
expense.  The indemnifying party will not be responsible for any settlement made
by the indemnified  party without the indemnifying  party's written  permission,
which  will  not  be  unreasonably   withheld  or  delayed.  In  the  event  the
indemnifying  party  and the  indemnified  party  agree to  settle a Claim,  the
indemnified party agrees not to publicize the settlement without first obtaining
the indemnifying party's written permission.

12. PROTECTION OF PROPRIETARY RIGHTS

         12.1 Microsoft  Intellectual  Property. In the event Licensee learns of
any infringement or imitation of the Licensed Trademarks,  the Software Title or
the Finished  Product Units, or the  proprietary  rights in or related to any of
them, it will promptly notify Microsoft thereof.  Microsoft may take such action
as it  deems  advisable  for  the  protection  of its  rights  in  and  to  such
proprietary rights, and Licensee shall, if requested by Microsoft,  cooperate in
all reasonable respects therein at Microsoft's  expense.  In no event,  however,
shall  Microsoft be required to take any action if it deems it inadvisable to do
so.  Microsoft will have the right to retain all proceeds it may derive from any
recovery in connection with such actions.

         12.2  Licensee  Intellectual  Property.  Licensee,  without the express
written permission of Microsoft,  may bring any action or proceeding relating to
this  infringement or potential  infringement,  to the extent such  infringement
involves any  proprietary  rights of Licensee  (provided  that Licensee will not
have the right to bring  any such  action or  proceeding  involving  Microsoft's
intellectual  property).  Licensee  shall  make  reasonable  efforts  to  inform
Microsoft  regarding  such actions in a timely  manner.  Licensee  will have the
right to retain all proceeds it may derive from any recovery in connection  with
such actions.

* Confidential portion omitted and filed separately with the Commission.

                                       14
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                                                                    CONFIDENTIAL

         12.3 Joint Actions.  Licensee and Microsoft may agree to jointly pursue
cases of  infringement  involving the Software  Titles (since such products will
contain  intellectual  property  owned  by each of  them).  Unless  the  parties
otherwise agree, or unless the recovery is expressly  allocated  between them by
the court (in which case the terms of Sections 12.1 and 12.2 will apply), in the
event Licensee and Microsoft  jointly  prosecute an  infringement  lawsuit under
this  provision,  any  recovery  shall be used first to  reimburse  Licensee and
Microsoft for their  respective  reasonable  attorneys'  fees and expenses,  pro
rata,  and any remaining  recovery shall also be given to Licensee and Microsoft
pro rata based upon the fees and expenses incurred in bringing such action.

13. GENERAL

         13.1 Governing Law;  Venue;  Attorneys  Fees.  This Agreement  shall be
construed and  controlled by the laws of the State of  Washington,  U.S.A.,  and
Licensee  consents to  exclusive  jurisdiction  and venue in the federal  courts
sitting in King  County,  Washington,  U.S.A.,  unless no  federal  jurisdiction
exists, in which case Licensee  consents to exclusive  jurisdiction and venue in
the  Superior  Court of King  County,  Washington,  U.S.A.  Licensee  waives all
defenses of lack of personal jurisdiction and forum non conveniens.  Process may
be served on either party in the manner  authorized by  applicable  law or court
rule. If either party employs  attorneys to enforce any rights arising out of or
relating to this  Agreement,  the prevailing  party shall be entitled to recover
its  reasonable  attorneys'  fees,  costs and  other  expenses.  This  choice of
jurisdiction  provision  does not  prevent  either  Licensee or  Microsoft  from
seeking  injunctive relief with respect to a violation of intellectual  property
rights or confidentiality obligations in any appropriate jurisdiction.

         13.2 Notices;  Requests.  All notices and requests in  connection  with
this  Agreement  shall be deemed given on the third day after they are deposited
in the U.S.  mails,  postage  prepaid,  certified or registered,  return receipt
requested; or the day after they are sent by overnight courier, charges prepaid,
with a confirming fax; and addressed as follows:

Licensee:         The 3DO Company
                  200 Cardinal Way
                  Redwood City, CA  94063

Attention:        James Alan Cook

Fax:              650 385 3182
Phone:            650 385 2770
Email:            jamie.cook@3do.com

Microsoft:  MICROSOFT LICENSING INC.

       _____________________________

       _____________________________

Attention: _________________________

with a cc to:     MICROSOFT CORPORATION
                  One Microsoft Way
                  Redmond, WA  98052-6399

Attention:        Law & Corporate Affairs Department
                  Product Development & Marketing
                  Fax: (425) 706-7329

or to such  other  address  as the party to  receive  the  notice or  request so
designates by written notice to the other.

         13.3 Assignment.  Licensee may not assign this Agreement or any portion
thereof,  to any  third  party  unless  Microsoft  expressly  consents  to  such
assignment in writing.  Microsoft  will have the right to assign this  Agreement
and/or any portion thereof as Microsoft may deem  appropriate  and/or  authorize
its  affiliates  or partners to perform  this  Agreement in whole or part on its
behalf. For the purposes of this Agreement,  a merger,  consolidation,  or other
corporate  reorganization,  or a transfer or sale of a controlling interest in a
party's stock, or of all or  substantially  all of its assets shall be deemed to
be an  assignment.  This  Agreement  will inure to the benefit of and be binding
upon  the  parties,  their  successors,  administrators,  heirs,  and  permitted
assigns.

* Confidential portion omitted and filed separately with the Commission.

                                       15
<PAGE>

                                                                    CONFIDENTIAL

         13.4 No Partnership. Microsoft and Licensee are entering into a license
pursuant to this Agreement and nothing in this  Agreement  shall be construed as
creating an employer-employee  relationship,  a partnership,  or a joint venture
between the parties.

         13.5 Severability. In the event that any provision of this Agreement is
found  invalid or  unenforceable  pursuant to judicial  decree or decision,  the
remainder of this Agreement shall remain valid and enforceable  according to its
terms.  The parties  intend that the provisions of this Agreement be enforced to
the fullest extent permitted by applicable law.  Accordingly,  the parties agree
that if any provisions are deemed not enforceable, they shall be deemed modified
to the extent necessary to make them enforceable in a manner consistent with the
stated intentions of the parties (if and to the extent possible).

         13.6 Injunctive Relief. The parties agree that Licensee's threatened or
actual  unauthorized use of the Licensed Trademarks whether in whole or in part,
may result in immediate and  irreparable  damage to Microsoft for which there is
no adequate  remedy at law, and that either party's  threatened or actual breach
of the  confidentiality  provisions  may cause like damage to the  non-breaching
party,  and  in  such  event  the  non-breaching  party  shall  be  entitled  to
appropriate  injunctive  relief,  without the necessity of posting bond or other
security.

         13.7 Entire Agreement; Modification; No Offer. The parties hereto agree
that  this  Agreement   (including  the  Concept  Summary,   the  Non-Disclosure
Agreement,  the Xbox Guide,  and other  incorporated  documents)  constitute the
entire  agreement  between the parties with respect to the subject matter hereof
and  merges  all  prior  and  contemporaneous  communications.  It shall  not be
modified except by a written  agreement dated subsequent hereto signed on behalf
of Licensee and Microsoft by their duly authorized representatives. Neither this
Agreement nor any written or oral statements related hereto constitute an offer,
and this Agreement  shall not be legally  binding until executed by both parties
hereto.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the Effective Date on the dates indicated below.


MICROSOFT LICENSING, INC.                   THE 3DO COMPANY

/s/ Sharon Cochran                           /s/ James Alan Cook
-----------------------------------          -----------------------------------
By (sign)                                    By (sign)

Sharon Cochran                               James Alan Cook
-----------------------------------          -----------------------------------
Name (Print)                                 Name (Print)

OEM Accounting Manager                       Exec. Vice President
-----------------------------------          -----------------------------------
Title                                        Title

July 22, 2002                                July 8, 2002
-----------------------------------          -----------------------------------
Date                                         Date

* Confidential portion omitted and filed separately with the Commission.

                                       16