Jonathan, Reporter

This is about a system that was so amazing but unfortunately, it failed. It was made by Sega and this was their last console. It’s the Dreamcast. It is 128-bit, came with a modem out of the box, and was way ahead of it’s time. It is also the first sixth generation console and is considered one of Sega’s best consoles. It initially seemed successful but then declined and failed. It has an interesting story.


Many of Sega’s consoles failed. When the 32x and Sega CD add-ons for the Genesis failed, Sega did not lose hope. After the Saturn’s failure, however, Sega lost most of it’s hope. After this, Sega decided to create the Dreamcast to get away from the Sega Saturn fiasco. However, the Saturn was successful in Japan and they didn’t need a new console. The Dreamcast was released in Japan on November 27, 1998. There were many pre-orders before it’s release and Sega had to stop pre-orders. By the end of the day it was released, the Dreamcast sold out. Due to a shortage of graphics chips, Sega was not able to ship the number of units it wanted to. Sonic Adventure and Sega Rally Championship 2 were delayed and not launch titles for the Dreamcast in Japan, while they were supposed to be. Sega would be given fear on March 1, 1999, when Sony announced the Playstation 2. The Playstation 2 was more powerful than the Dreamcast. About two months before the U.S. launch of the Dreamcast, on July 15, 1999, Sega collaborated with Hollywood Video to allow gamers to rent the Dreamcast before launch as well as a special pre-release version of Sonic Adventure titled Sonic Adventure: Limited Edition. Today, Sonic Adventure: Limited Edition is considered one of the rarest Dreamcast games as well as the rarest U.S. Dreamcast Game (I actually have a copy of it. I got lucky and won it on an eBay bid and only had to pay $37. You can easily get lucky when trying to find a copy of the game. Usually rare games would cost over $100). When the Dreamcast launched in the U.S. on September 9, 1999 (for $199), it was a huge success! Sales exceeded 1.5 million units by the end of 1999. The launch however had one problem, defective GD-ROMs of Sonic Adventure, Blue Stinger, and Ready 2 Rumble Boxing. The Dreamcast was supposed to launch in Europe on the same day as the American launch date, September 9, 1999, but it was then pushed back to September 23, 1999, and then at the last minute, was pushed back to October 14, 1999. It only sold about 1 million units total in Europe. In Australia and New Zealand, the Dreamcast launched on November 30, 1999. No first party titles were available at launch in Australia (including Sonic Adventure) and it did not sell well there. New Zealand never got the chance to play games online. The Playstation 2 launched on March 4, 2000 in Japan and was a huge success. About 600,000 Playstation 2’s were sold that day. Sega focused on the U.S. market since Dreamcast sales there were bigger and since the Playstation 2 had not launched in the U.S. yet. There were many plans to try to boost Dreamcast sales such as an online service called Seganet, which launched in September 2000. The European counterpart was Dreamarena. To increase system sales, if you signed up for an 18-month subscription to Seganet, you would receive a rebate for the full price of a Dreamcast (which had been cut down to $149) and a free Dreamcast keyboard. The announcements for the Xbox and Gamecube gave Sega more fear. When the Playstation 2 launched in the U.S. on October 26, 2000, Sony was not able to ship as much of them to the U.S. Only 500,000 were shipped while Sony wanted to ship 1 million. Unfortunately, it did not help the Dreamcast as much as Sega thought it would. The PSone (a redesigned model of the Playstation) was the best selling console in the U.S. during the 2000 holiday season. Sega needed to sell 5 million units by the end of 2000 so the Dreamcast can remain a viable platform, but only 3 million were sold by then. Every time Sega kept dropping the price of the Dreamcast in combination with poor system sales, they kept losing money. In March 2001, Sega posted a $417.5 million loss! On January 31, 2001, Sega announced that the Dreamcast would be discontinued after March 31, 2001 and that they would withdraw from the console business and become a third party developer and publisher. To sell off remaining stock, the price of the Dreamcast was reduced to $99.95 on February 4, 2001, then to $79, and then to $49.95. Games were still being released for the Dreamcast. Releases continued in the U.S. until the first half of 2002. Dreamcasts were still being repaired in Japan until 2007. It is estimated that between 8.2 million and 10.6 million units were sold worldwide.


Some reasons for the Dreamcast’s failure:


  1. Playstation 2
  2. Poor market timing
  3. Lack of third party support (mostly from EA (Electronic Arts) and Squaresoft (now known as Square Enix)
  4. Game Piracy (was very common on the Dreamcast)
  5. Controller (It was large which was mostly a problem in Japan as Japanese people have smaller hands and the controller also lacked a second analog stick)
  6. Poor reputation from the Saturn, 32x, and Sega CD
  7. Late U.S. launch
  8. Lack of DVD playback
  9. The use of the GD-ROM format instead of the DVD-ROM format (Sega used the GD-ROM format due to production costs, but that didn’t allow DVD playback and also had less storage)

The Dreamcast is remembered a lot today as one of the best consoles. Sega withdrawing from the console business was a bad decision. The Dreamcast shows Sega can still do well in the video game console market. Despite releases for the Dreamcast in the U.S. ending in the first half of 2002, games are actually still being released for the Dreamcast. I recommend that you get a Dreamcast. It is amazing.