SNK ruled arcade fighting — the Neo Geo's price and 3D killed it

SNK was founded as Shin Nihon Kikaku in 1973 and reorganized as a stock company in 1978 by Eikichi Kawasaki. Throughout the 1980s it built a reputation for high-quality arcade games. In 1990 it launched the Neo Geo MVS arcade system and the Neo Geo AES home console — the AES debuted at $649.99 with games costing $200 each. By 1997 the MVS had sold 1 million arcade units but the AES had sold only 410,000 homes. The console was a prestige product for a tiny audience.

In 1994 SNK released the Neo Geo CD, which undercut the AES price but suffered from a painfully slow CD-ROM drive. It sold poorly. In 1997 SNK launched the Hyper Neo Geo 64, a 3D arcade board meant to compete with Sega's Model 3 and Namco's System 12 — it received only seven games and flopped. The monochrome Neo Geo Pocket (1998) never left Japan. The Neo Geo Pocket Color (1999) reached just 2% of the North American handheld market before being discontinued in 2000. In 1999 SNK opened the Neo Geo World Tokyo Bayside amusement park, another money-losing venture.

The arcade market that SNK had bet everything on was shrinking rapidly as players moved to home consoles and 3D games. SNK's 2D fighting games — King of Fighters, Fatal Fury, Samurai Shodown — were still beloved but the industry had moved on. In January 2000 pachinko maker Aruze acquired SNK. Aruze focused on using SNK's characters for pachinko machines rather than developing new games, accelerating the decline.

On April 2, 2001 SNK filed for Civil Rehabilitation in Osaka with 38 billion yen in debt. The court abolished the proceedings on October 1 and declared bankruptcy on October 30. Founder Kawasaki had anticipated the outcome — he established Playmore Corporation on August 1, 2001, which acquired SNK's intellectual property in the bankruptcy auction. Playmore later bought back the SNK trademark from Aruze and renamed itself SNK Playmore in 2003, then SNK Corporation in 2016. The company survived, but the original SNK was destroyed by its own hardware strategy.