MKL:
Shito:
Correct spelling for Neo-Geo actually is like 'ne-ow jee-ow' ('ne' si prononced as in never, and NOT as in 'new').
"correct" you say? When it comes to linguistic matters being normative often leads to misguided conclusions...
Considering it's a name of Indo-European origin (ultimately going back to Old Greek), I fail to see how some cats belonging to a totally different linguistic family and with a manifestly poor command of English (or any other I.-E. languages for that matter) are supposed to establish the 'correct' pronunciation of those I.-E. words for us native Indo-European speakers.
The obvious truth is that since the lexemes "Neo" and "Geo" are independently found in a variety of Indo-European languages (Italian, German, English, French, etc.) their pronunciation will be language-specific, i.e. different in the different languages. Therefore, the upshot is that there can be no universal pronunciation of "Neo Geo": the Italian, German, English, French (etc.) ones all have reason to exist.
On the other hand, one might ask whether the alleged Japanese pronunciation has real linguistic grounds or simply originated from the ignorance of the speakers (e.g. note how Italians pronounce "X-Files"). For instance, one should check whether or not the lexemes "Neo" and "Geo" are present, as borrowings, in Japanese (I mean quite apart from the SNK system) and whether or not they have the pronunciation you suggested above. This means that you'd also have to adduce a phonetic rationale underlying the different pronunciation of "-e-" in the two words by Japanese speakers.
Needless to say, if you come up with a motivation like "they made it, hence their pronuciation must be the correct one" don't expect me to find it satisfactory...