Editing Dreamcast (section)

== History ==

=== Background ===
In 1988, Sega released the [[Sega Genesis|Genesis]] (known as the Mega Drive in most countries outside North America), in the [[fourth generation of video game consoles]].<ref name="Retroinspection">{{cite magazine |last=Sczepaniak |first=John |date=August 2006 |title=Retroinspection: Mega Drive |url=https://archive.org/details/retro_gamer/RetroGamer_027/page/42/mode/2up |magazine=[[Retro Gamer]] |publisher= |issue=27 |pages=42–47}}</ref> It became the most successful Sega console ever, at 30.75 million units sold.<ref name="Routledge">{{cite book|last=Ernkvist|first=Mirko|title=The Video Game Industry: Formation, Present State, and Future|chapter=Console Hardware: The Development of Nintendo Wii|publisher=[[Routledge]]|year=2012|isbn=978-1138803831|page=[https://www.google.com/books/edition/The_Video_Game_Industry/lgiQNdc-DOwC?hl=en&gbpv=1&bsq=158 158]|quote="&nbsp;... all [figures] from [[Computer Entertainment Supplier's Association|CESA]] [[white paper]]."}}</ref> Its successor, the [[Sega Saturn|Saturn]], was released in Japan in 1994.<ref name="Saturn">{{cite web|title=Sega Saturn|url=http://sega.jp/fb/segahard/ss/|url-status=live|archive-url=https://web.archive.org/web/20140716103105/http://sega.jp/fb/segahard/ss/|archive-date=July 16, 2014|access-date=March 3, 2014|publisher=[[Sega]]|language=ja}}</ref> The Saturn is [[CD-ROM]]-based and has [[2D computer graphics|2D]] and [[3D computer graphics|3D]] graphics, but its complex dual-[[Central processing unit|CPU]] architecture was more difficult to program than its chief competitor, the [[Sony]] [[PlayStation (console)|PlayStation]].<ref name="IGN History of Dreamcast"/> Although the Saturn debuted before the PlayStation in Japan and the United States,<ref name="Finn">{{cite book|author-last=Finn|author-first=Mark|editor-last=Mäyrä|editor-first=Frans|title=Computer Games and Digital Cultures: Conference Proceedings: Proceedings of the Computer Games and Digital Cultures Conference, June 6-8, 2002, Tampere, Finland|chapter=Console Games in the Age of Convergence|publisher=Tampere University Press|year=2002|isbn=9789514453717|pages=45–58}}</ref>{{sfn|Kent|2001|pages=502, 516}} its surprise US launch, four months earlier than scheduled,<ref>{{cite web|last=Cifaldi |first=Frank |url=http://www.1up.com/news/day-history-sega-announces-surprise |archive-url=https://archive.today/20130629122913/http://www.1up.com/news/day-history-sega-announces-surprise |archive-date=June 29, 2013 |title=This Day in History: Sega Announces Surprise Saturn Launch |website=[[1UP.com]] |date=May 11, 2010 |access-date=December 10, 2016 |url-status=dead}}</ref>{{sfn|Kent|2001|pages=516–517}}{{sfn|DeMaria|Wilson|2004|page=282}} distribution was limited to four retailers due to a lack of supply, which "aggravated" other retailers.  Developers also found it easier to program for the Playstation, which caused a loss of support from these game developers.<ref name="Schilling">{{cite journal|last=Schilling|first=Mellissa A.|title=Technological Leapfrogging: Lessons From the U.S. Video Game Console Industry|journal=[[California Management Review]]|volume=45|number=3|date=Spring 2003|page=23|doi=10.2307/41166174|jstor=41166174|s2cid=114838931}}</ref> Losses on the Saturn{{sfn|Kent|2001|page=532}} contributed to financial problems for Sega, whose revenue had declined between 1992 and 1995 as part of an industry-wide slowdown.<ref name="Finn" /><ref name="Innovation and competition">{{cite journal |last1=Gallagher |first1=Scott |last2=Park |first2=Seung Ho |date=February 2002 |title=Innovation and Competition in Standard-Based Industries: A Historical Analysis of the U.S. Home Video Game Market |journal=[[Institute of Electrical and Electronics Engineers|IEEE Transactions on Engineering Management]] |volume=49 |pages=67–82 |doi=10.1109/17.985749 |number=1}}</ref>{{sfn|Kent|2001|pages=500, 508, 531}}

Sega announced that [[Shoichiro Irimajiri]] would replace [[Tom Kalinske]] as chairman and CEO of Sega of America,{{sfn|Kent|2001|page=535}}<ref name="M2 Press" /><ref name="Kalinske out">{{cite web |date=July 16, 1996 |title=Kalinske Out - WORLD EXCLUSIVE |url=http://www.next-generation.com/news/071696a.html |url-status=dead |archive-url=https://web.archive.org/web/19961220200643/http://www.next-generation.com/news/071696a.html |archive-date=December 20, 1996 |access-date=May 6, 2014 |website=[[Next Generation (magazine)|Next Generation]] |publisher=}}</ref> while [[Bernie Stolar]], a former executive at [[Sony Computer Entertainment]] of America,<ref name="Newsflash">{{cite web |date=July 13, 1996 |title=NEWSFLASH: Sega Planning Drastic Management Reshuffle - World Exclusive |url=http://www.next-generation.com/news/071396a.html |url-status=dead |archive-url=https://web.archive.org/web/19961220200717/http://www.next-generation.com/news/071396a.html |archive-date=December 20, 1996 |access-date=May 6, 2014 |website=[[Next Generation (magazine)|Next Generation]] |publisher=}}</ref>{{sfn|Kent|2001|page=558}} became Sega of America's executive vice president in charge of product development and third-party relations.<ref name="M2 Press">{{cite news|title=Sega of America appoints Shoichiro Irimajiri chairman/chief executive officer |work=M2PressWIRE |publisher=M2 Communications, Ltd. |date=July 16, 1996 |url=http://www.m2.com/m2/web/story.php/1996852568440080DDE88025683B005E7A3F |quote=Sega of America Inc. (SOA) Monday announced that [[Shoichiro Irimajiri]] has been appointed chairman and chief executive officer. In addition, Sega announced that Bernard Stolar, previously of Sony Computer Entertainment America, has joined the company as executive vice president, responsible for product development and third-party business&nbsp;... Sega also announced that Hayao Nakayama and David Rosen have resigned as chairman and co-chairman of Sega of America, respectively. |url-status=live |archive-url=https://web.archive.org/web/20141018032603/http://www.m2.com/m2/web/story.php/1996852568440080DDE88025683B005E7A3F |archive-date=October 18, 2014 |url-access=subscription}}</ref><ref name="Kalinske out" /> After the 1996 launch of the [[Nintendo 64]], sales of the Saturn and its software fell sharply. As of August 1997, Sony controlled 47 percent of the console market, [[Nintendo]] controlled 40 percent, and Sega controlled only 12 percent; neither price cuts nor high-profile games helped the Saturn.{{sfn|Kent|2001|page=558}} {{Quote box
| quote = I thought the Saturn was a mistake as far as hardware was concerned. The games were obviously terrific, but the hardware just wasn't there.
| source = —Bernie Stolar, former president of Sega of America, in 2009<ref name="IGN's History of Sega">{{cite web |author=Fahs, Travis |date=April 21, 2009 |title=IGN Presents the History of Sega |url=https://ign.com/articles/2009/04/21/ign-presents-the-history-of-sega?page=1 |url-status=live |archive-url=https://web.archive.org/web/20141031060740/http://www.ign.com/articles/2009/04/21/ign-presents-the-history-of-sega?page=1 |archive-date=October 31, 2014 |access-date=October 31, 2014 |website=[[IGN]]}}</ref>
| width = 30em
}}
[[Hayao Nakayama]] resigned as president of Sega in January 1998 in favor of Irimajiri,<ref name="NYT">{{cite news |last=Strom |first=Stephanie |date=March 14, 1998 |title=Sega Enterprises Pulls Its Saturn Video Console From the U.S. Market |work=[[The New York Times]] |url=https://www.nytimes.com/1998/03/14/business/international-business-sega-enterprises-pulls-its-saturn-video-console-us-market.html?pagewanted=1 |url-status=live |access-date=January 2, 2010 |archive-url=https://web.archive.org/web/20130430012902/http://www.nytimes.com/1998/03/14/business/international-business-sega-enterprises-pulls-its-saturn-video-console-us-market.html?pagewanted=1 |archive-date=April 30, 2013}}</ref> and Stolar acceded to become CEO and president of Sega of America.{{sfn|Kent|2001|page=558}}<ref>{{cite web|last=Feldman|first=Curt|url=http://www.gamespot.com/articles/katana-strategy-still-on-back-burner/1100-2463564/|title=Katana Strategy Still on Back Burner|website=[[GameSpot]]|date=April 22, 1998|url-status=live|access-date=December 9, 2014|archive-url=https://web.archive.org/web/20170705034437/https://www.gamespot.com/articles/katana-strategy-still-on-back-burner/1100-2463564/|archive-date=July 5, 2017}}</ref> Following five years of generally declining profits,<ref name="1998 report"/> in the fiscal year ending March 31, 1998, Sega suffered its first parent and consolidated financial losses since its 1988 listing on the [[Tokyo Stock Exchange]],<ref>{{cite web |date=March 18, 1998 |title=Sega News From Japan |url=http://www.gamespot.com/articles/sega-news-from-japan/1100-2462352/ |url-status=live |archive-url=https://web.archive.org/web/20170705034437/https://www.gamespot.com/articles/sega-news-from-japan/1100-2462352/ |archive-date=July 5, 2017 |access-date=December 7, 2014 |website=[[GameSpot]]}}</ref> reporting a consolidated net loss of {{¥|35.6 billion|link=yes}} ({{US$|269.8 million}}).<ref name="1998 report">{{cite web |title=Sega Enterprises Annual Report 1998 |url=http://sega.jp/IR/en/ar/ar1998/ar98.pdf |url-status=dead |archive-url=https://web.archive.org/web/20040504003308/http://sega.jp/IR/en/ar/ar1998/ar98.pdf |archive-date=May 4, 2004 |access-date=December 7, 2014 |publisher=[[Sega]] |pages=1, 7–8}}</ref> Shortly before announcing its financial losses, Sega announced the discontinuation of the Saturn in North America to prepare for the launch of its successor.{{sfn|Kent|2001|page=558}}<ref name="NYT" /> This effectively left the Western market without Sega games for more than a year.<ref name="IGN History of Dreamcast">{{cite web |last=Fahs |first=Travis |date=September 9, 2010 |title=IGN Presents the History of Dreamcast |url=https://ign.com/articles/2010/09/10/ign-presents-the-history-of-dreamcast |url-status=live |archive-url=https://web.archive.org/web/20140928201508/http://www.ign.com/articles/2010/09/10/ign-presents-the-history-of-dreamcast |archive-date=September 28, 2014 |access-date=October 31, 2014 |website=[[IGN]]}}</ref> Rumors about the upcoming Dreamcast—spread mainly by Sega—leaked to the public before the last Saturn games were released.{{sfn|Kent|2001|page=559}}

=== Development ===
As early as 1995, reports surfaced that Sega would collaborate with [[Lockheed Martin]], [[The 3DO Company]], [[Panasonic|Matsushita]] or [[Alliance Semiconductor]] to create a new [[graphics processing unit]], which conflicting accounts said would be used for a 64-bit "Saturn 2" or an add-on peripheral.<ref>{{cite magazine |date=November 1995 |title=US Defense Corp Holds Key to Sega Plans |url=https://archive.org/stream/nextgen-issue-011/Next_Generation_Issue_011_November_1995#page/n13 |url-status=live |magazine=[[Next Generation (magazine)|Next Generation]] |publisher= |volume=1 |issue=11 |pages=12–14 |archive-url=https://web.archive.org/web/20181206005849/https://archive.org/stream/nextgen-issue-011/Next_Generation_Issue_011_November_1995#page/n13 |archive-date=December 6, 2018 |access-date=July 22, 2018}}</ref><ref name="Peep Show">{{cite web |date=May 1, 1997 |title=Peep Show: Sega's New Console Creeps Out of the Shadows |url=http://www.gamespot.com/articles/peep-show-segas-new-console-creeps-out-of-the-shadows/1100-2466384/ |url-status=live |archive-url=https://web.archive.org/web/20170705034437/https://www.gamespot.com/articles/peep-show-segas-new-console-creeps-out-of-the-shadows/1100-2466384/ |archive-date=July 5, 2017 |access-date=December 9, 2014 |website=[[GameSpot]]}}</ref><ref>* {{cite web |date=April 29, 1997 |title=Black Belt from a Lockheed Perspective |url=http://www.next-generation.com/news/042997b.chtml |url-status=dead |archive-url=https://web.archive.org/web/19970605161903/http://www.next-generation.com/news/042997b.chtml |archive-date=June 5, 1997 |access-date=January 20, 2015 |work=[[Next Generation (magazine)|Next Generation]]}}

* {{cite web |date=February 22, 2008 |title=Interview: Toshiyasu Morita |url=http://www.sega-16.com/2008/02/interview-toshiyasu-morita/ |url-status=live |archive-url=https://web.archive.org/web/20141129014052/http://www.sega-16.com/2008/02/interview-toshiyasu-morita/ |archive-date=November 29, 2014 |access-date=January 20, 2015 |website=Sega-16 |publisher= |quote=}}</ref> Dreamcast development was unrelated.<ref name="Peep Show"/><ref name="RetroinspectionD"/> Considering the Saturn's poor performance, Irimajiri looked beyond Sega's internal hardware development division to create a new console.<ref name="RetroinspectionD"/> In 1997, he enlisted [[IBM]]'s Tatsuo Yamamoto to lead an eleven-person team to work on a secret project in the United States with the codename Blackbelt. Accounts vary on how an internal team led by [[Hideki Sato]] also began development on Dreamcast hardware; one account specifies that Sega tasked both teams,<ref name="gamasutra1"/> and another suggests that Sato was bothered by Irimajiri's choice to begin development externally and had his team start work. <ref name="RetroinspectionD"/><ref name="EdgeHistory">{{cite magazine|url=http://www.edge-online.com/features/a-history-of-videogame-hardware-sega-dreamcast/ |title=A history of videogame hardware: Sega Dreamcast |author=Parkin, Simon |date=June 24, 2014 |access-date=March 5, 2015 |magazine=[[Edge (magazine)|Edge]] |url-status=dead |archive-url=https://web.archive.org/web/20141121024302/http://www.edge-online.com/features/a-history-of-videogame-hardware-sega-dreamcast/ |archive-date=November 21, 2014}}</ref> Sato and his group chose the [[Hitachi]] [[SuperH|SH-4]] processor architecture and the [[Imagination Technologies|VideoLogic]] [[PowerVR#Series2 (NEC)|PowerVR2]] graphics processor, manufactured by [[NEC]], in the production of the [[mainboard]]. Initially known as Whitebelt,<ref name="RetroinspectionD">{{cite magazine |last=McFerran |first=Damien |date=May 2008 |title=Retroinspection: Dreamcast |url=http://www.nintendolife.com/news/2015/04/hardware_classics_sega_dreamcast |url-status=live |magazine=[[Retro Gamer]] |publisher= |issue=50 |pages=66–72 |archive-url=https://web.archive.org/web/20160304110322/http://www.nintendolife.com/news/2015/04/hardware_classics_sega_dreamcast |archive-date=March 4, 2016}}</ref> the project was later codenamed Dural, after the [[Dural (Virtua Fighter)|metallic female fighter]] from Sega's ''[[Virtua Fighter]]'' series.{{sfn|Kent|2001|page=559}}<ref name="gamasutra1">{{cite web |last=Perry |first=Douglass |date=September 9, 2009 |title=Features - The Rise And Fall Of The Dreamcast |url=https://www.gamedeveloper.com/business/the-rise-and-fall-of-the-dreamcast |url-status=live |archive-url=https://web.archive.org/web/20141027132503/http://www.gamasutra.com/view/feature/4128/the_rise_and_fall_of_the_dreamcast.php?print=1 |archive-date=October 27, 2014 |access-date=October 29, 2014 |website=[[Game Developer (website)|Gamasutra]]}}</ref>

Yamamoto's group opted to use [[3dfx]] [[Voodoo 2]] and [[Voodoo Banshee]] graphics processors alongside a [[PowerPC 600|Motorola PowerPC 603e]] [[central processing unit]] (CPU),<ref name="RetroinspectionD"/> but Sega management later asked them to also use the SH-4 chip.<ref name="gamasutra1"/> Both processors have been described as "[[Commercial off-the-shelf|off-the-shelf]]" components.<ref name="RetroinspectionD"/> According to Charles Bellfield, the former Sega of America vice president of communications and former NEC brand manager, presentations of games using the NEC solution showcased the performance and low cost delivered by the SH-4 and PowerVR architecture. He said that Sega's relationship with NEC, a Japanese company, likely also influenced the decision to use its hardware rather than the architecture developed in America.<ref name="gamasutra1"/> Stolar felt the US 3dfx version should have been used, but that "Japan wanted the Japanese version, and Japan won".<ref name="gamasutra1"/> As a result, 3dfx filed a lawsuit against Sega and NEC claiming breach of contract, which was settled out of court.<ref name="RetroinspectionD"/>

The choice to use the PowerVR architecture concerned [[Electronic Arts]] (EA), a longtime developer for Sega consoles. EA had invested in 3dfx but was unfamiliar with the selected architecture, which was reportedly less powerful.<ref name="gamasutra1" /> According to Shiro Hagiwara (a general manager at Sega's hardware division) and Ian Oliver (the managing director of the Sega subsidiary Cross Products), the SH-4 was chosen while still in development, following lengthy deliberation, as the only processor that "could adapt to deliver the 3D geometry calculation performance necessary".<ref name="Unified" /> By February 1998, Sega had renamed the project Katana, after the [[Katana|Japanese sword]],{{sfn|Kent|2001|page=559}} although certain hardware specifications such as [[random access memory]] (RAM) were not finalized.<ref name="NG38">{{cite magazine|title=Good-bye Dural, hello Katana|magazine=[[Next Generation (magazine)|Next Generation]]|publisher=[[Future plc|Imagine Media]]|date=February 1998|issue=38|page=24}}</ref>

Knowing the Saturn had been set back by its high production costs and complex hardware, Sega took a different approach with the Dreamcast. Like previous Sega consoles, the Dreamcast was designed around intelligent [[System|subsystems]] working in parallel,<ref name="Unified">{{cite journal |last1=Hagiwara |first1=Shiro |last2=Oliver |first2=Ian |date=November–December 1999 |title=Sega Dreamcast: Creating a Unified Entertainment World |journal=[[IEEE Micro]] |volume=19 |pages=29–35 |doi=10.1109/40.809375 |number=6}}</ref> but the selections of hardware were closer to personal computers than video game consoles, reducing cost.<ref name="RetroinspectionD"/> It also enabled software development to begin before any development kits had been completed, as Sega informed developers that any game developed with a [[Pentium II]] 200 in mind would run on the console.<ref>{{cite magazine |date=December 1997 |title=Dural Team Gets to Work |magazine=[[Next Generation (magazine)|Next Generation]] |publisher= |issue=36 |page=22}}</ref> According to Damien McFerran, "the [[motherboard]] was a masterpiece of clean, uncluttered design and compatibility".<ref name="RetroinspectionD"/>

The Chinese economist and future Sega.com CEO Brad Huang convinced the Sega chairman, [[Isao Okawa]], to include a [[modem]] with every Dreamcast under opposition from Okawa's staff over the additional {{US$|15}} cost per unit.{{sfn|Kent|2001|page=577}}<ref name="Superhero">{{cite web |last=Burrows |first=Peter |date=May 21, 2000 |title=Sega's Superhero Vs. The Big Guys |url=http://www.businessweek.com/stories/2000-05-21/segas-superhero-vs-dot-the-big-guys |archive-url=https://archive.today/20141029005403/http://www.businessweek.com/stories/2000-05-21/segas-superhero-vs-dot-the-big-guys |url-status=dead |archive-date=October 29, 2014 |access-date=October 29, 2014 |work=[[Bloomberg Businessweek|BusinessWeek]] }}</ref><ref>{{cite web |last=Stepanek |first=Marcia |date=June 5, 2000 |title=How to Jump-Start Your E-Strategy |url=https://www.bloomberg.com/news/articles/2000-06-04/how-to-jump-start-your-e-strategy |url-status=live |archive-url=https://web.archive.org/web/20180728101113/https://www.bloomberg.com/news/articles/2000-06-04/how-to-jump-start-your-e-strategy |archive-date=July 28, 2018 |access-date=October 29, 2014 |work=[[Bloomberg Businessweek|BusinessWeek]] |quote=}}</ref> To account for rapid changes in home data delivery, Sega designed the modem to be [[Modularity|modular]].<ref name="Unified"/>

Sega selected the [[GD-ROM]] media format.<ref name="EGM115">{{cite magazine |author=Johnston, Chris |date=February 1999 |title=Hands On: Dreamcast |magazine=[[Electronic Gaming Monthly]] |publisher= |issue=115 |pages=26–27}}</ref> Jointly developed by Sega and [[Yamaha Corporation|Yamaha]], the GD-ROM could be mass-produced at a similar price to a normal CD-ROM,<ref name="Unified"/> avoiding the greater expense of newer [[DVD-ROM]] technology.<ref name="RetroinspectionD"/><ref name="Hackers">{{cite web |last=Borland |first=John |date=June 30, 2000 |title=Hackers break Dreamcast safeguards, distribute games online |url=http://news.cnet.com/2100-1023-242686.html |url-status=live |archive-url=https://web.archive.org/web/20141029093337/http://news.cnet.com/2100-1023-242686.html |archive-date=October 29, 2014 |access-date=October 28, 2014 |website=[[CNET|CNET News]] |publisher=}}</ref><ref name="IGNGreat"/>

[[File:Sega-Dreamcast-Console-FL (cropped) Windows CE logo.png|thumb|Logo on the Dreamcast: "Compatible with Windows CE"]]
[[Microsoft]] developed a custom Dreamcast version of [[Windows CE]] with [[DirectX]] [[Application programming interface|API]] and [[Dynamic-link library|dynamic-link libraries]], making it easy to [[Porting|port]] PC games to the platform,<ref name="Unified"/> although programmers would ultimately favor Sega's development tools over those from Microsoft.<ref name="RetroinspectionD"/> A member of the Project Katana team speaking anonymously predicted this would be the case, speculating developers would prefer the greater performance possibilities offered by the Sega OS to the more user-friendly interface of the Microsoft OS.<ref name=NG38/> In late 1997, there were reports about the rumored system, then codenamed Dural, and that it had been demonstrated to a number of game developers.<ref>{{Cite web |title=CNN - CYBERPLAY: Sega readies for battle - November 13, 1997 |url=http://edition.cnn.com/SHOWBIZ/9711/13/cyberplay.lat/ |access-date=2023-05-20 |website=CNN |archive-date=May 20, 2023 |archive-url=https://web.archive.org/web/20230520155658/http://edition.cnn.com/SHOWBIZ/9711/13/cyberplay.lat/ |url-status=dead }}</ref>

The Dreamcast was finally revealed on May 21, 1998 in Tokyo.<ref>{{Cite web |title=CNN - Sega unveils new Dreamcast game console - May. 21, 1998 |url=http://edition.cnn.com/TECH/computing/9805/21/sega_dreamcast/index.html |access-date=2023-05-20 |website=CNN |archive-date=May 20, 2023 |archive-url=https://web.archive.org/web/20230520155656/http://edition.cnn.com/TECH/computing/9805/21/sega_dreamcast/index.html |url-status=dead }}</ref> Sega held a public competition to name its new system and considered over 5,000 different entries before choosing "Dreamcast"—a portmanteau of "dream" and "broadcast".<ref name="RetroinspectionD"/> According to Katsutoshi Eguchi, Japanese game developer [[Kenji Eno]] submitted the name and created the Dreamcast's spiral logo, but this has not been officially confirmed by Sega.<ref>{{cite book |last=Szczepaniak |first=John |title=The Untold History of Japanese Game Developers: Volume 1 |publisher=SMG Szczepaniak |year=2014 |isbn=978-0992926007 |page=35}}</ref> Former Sega executive Kunihisa Ueno confirmed in his biography that a [[branding agency]] called Interbrand created the logo for the console, with Kenji Eno volunteering to name the console. Eno was paid for his involvement and signed a [[Non-disclosure agreement|NDA]] to prevent his involvement from going public.<ref>{{Cite web |last=Extension |first=Time |date=2024-01-15 |title=Who Created Dreamcast's Logo? We Spent A Year Trying To Find Out |url=https://www.timeextension.com/features/who-created-dreamcasts-logo-we-spent-a-year-trying-to-find-out |url-status=live |archive-url=https://web.archive.org/web/20240115161948/https://www.timeextension.com/features/who-created-dreamcasts-logo-we-spent-a-year-trying-to-find-out |archive-date=15 January 2024 |access-date=2024-01-17 |website=Time Extension |language=en-GB}}</ref><ref>{{Cite web |date=2015-03-09 |title=プジョーの社長、セガを語る（３） |url=https://kaisendon.seesaa.net/article/415303951.html |url-status=live |archive-url=https://web.archive.org/web/20240116001713/https://kaisendon.seesaa.net/article/415303951.html |archive-date=16 January 2024 |access-date=2024-01-17 |website=あなたの知らない方が良かった世界 |language=ja}}</ref>

The Dreamcast's startup sound was composed by the Japanese musician [[Ryuichi Sakamoto]].<ref>{{cite web |last1=Sato |first1=Yukiyoshi Ike |last2=Kennedy |first2=Sam |date=January 6, 2000 |title=Interview with Kenji Eno |url=http://uk.gamespot.com/news/interview-with-kenji-eno-2446022 |url-status=dead |archive-url=https://web.archive.org/web/20121018192858/http://uk.gamespot.com/news/interview-with-kenji-eno-2446022 |archive-date=October 18, 2012 |access-date=March 4, 2015 |work=[[GameSpot]]}}</ref> Because the Saturn had tarnished its reputation, Sega planned to remove its name from the console and establish a new gaming brand similar to Sony's [[PlayStation]], but Irimajiri's management team decided to retain it.<ref name="RetroinspectionD" /> Sega spent {{val|p={{US$}}|50|–|80 |u=million}} on hardware development, {{val|p=$|150|–|200 |u=million}} on software development, and {{US$|300 million}} on worldwide promotion—a sum which Irimajiri, a former [[Honda]] executive, humorously likened to the investments required to design new automobiles.<ref name="RetroinspectionD" /><ref>{{cite web |date=August 26, 1998 |title=Interview with Sega's Boss: Shoichiro Irimajiri |url=https://ign.com/articles/1998/08/27/interview-with-segas-boss-shoichiro-irimajiri |url-status=live |archive-url=https://web.archive.org/web/20141024121907/http://www.ign.com/articles/1998/08/27/interview-with-segas-boss-shoichiro-irimajiri |archive-date=October 24, 2014 |access-date=October 24, 2014 |website=[[IGN]]}}</ref>

=== Launch ===

==== Japan ====
Despite a 75 percent drop in half-year profits just before the Japanese launch, Sega was confident about the Dreamcast. It drew significant interest and many pre-orders.<ref name="RetroinspectionD"/> However, Sega could not achieve its shipping goals for the Japanese Dreamcast launch due to a shortage of [[PowerVR]] chipsets caused by a high failure rate in the manufacturing process.<ref name="RetroinspectionD"/><ref name="G4 GM">{{cite episode |title=Sega Dreamcast |url=http://www.g4tv.com/gamemakers/episodes/1259/Sega_Dreamcast.html |series=Game Makers |series-link=Game Makers |network=G4 |location=Los Angeles |airdate=August 20, 2008 |number=302 |url-status=dead |archive-url=https://web.archive.org/web/20081121040744/http://www.g4tv.com/gamemakers/episodes/1259/Sega_Dreamcast.html |archive-date=November 21, 2008}}</ref> As more than half of its limited stock had been pre-ordered, Sega stopped pre-orders in Japan. On November 27, 1998, the Dreamcast launched in Japan at a price of {{JPY|link=yes|29000}}, and the stock sold out by the end of the day. However, of the four games available at launch, only one—a port of ''[[Virtua Fighter 3]]'', the most successful arcade game Sega ever released in Japan—sold well.{{sfn|Kent|2001|page=563}} Sega estimated that an additional {{val|200000|–|300000|fmt=commas}} Dreamcast units could have been sold with sufficient supply.{{sfn|Kent|2001|page=563}}

Sega had announced that ''[[Sonic Adventure]]'', the next game starring its mascot, [[Sonic the Hedgehog (character)|Sonic the Hedgehog]], would launch with the Dreamcast and promoted it with a large-scale public demonstration at the [[Tokyo International Forum|Tokyo Kokusai Forum Hall]],<ref>{{cite web |last=Obuchi |first=Yutaka |date=July 16, 1998 |title=Sonic Onboard Dreamcast |url=http://www.gamespot.com/articles/sonic-onboard-dreamcast/1100-2464382/ |url-status=live |archive-url=https://web.archive.org/web/20170705034437/https://www.gamespot.com/articles/sonic-onboard-dreamcast/1100-2464382/ |archive-date=July 5, 2017 |access-date=December 9, 2014 |website=[[GameSpot]]}}</ref><ref>{{cite magazine |date=November 1998 |title=International News: Sonic Rocks Tokyo |magazine=[[Electronic Gaming Monthly]] |publisher= |volume=10 |issue=112 |page=50 |quote=}}</ref><ref>{{cite magazine |date=October 1998 |title=News: Sonic's Back! |magazine=[[Sega Saturn Magazine]] |volume=4 |issue=36 |pages=6–8 |quote=}}</ref> but it and ''[[Sega Rally Championship 2]]'' were delayed.<ref name="RetroinspectionD" /> They arrived within the following weeks, but sales continued to be slower than expected.{{sfn|Kent|2001|page=563-564}} Irimajiri hoped to sell over one million Dreamcast units in Japan by February 1999, but sold fewer than 900,000, undermining Sega's attempts to build an [[installed base]] sufficient to protect the Dreamcast after the arrival of competition from other manufacturers.{{sfn|Kent|2001|page=564}} There were reports of disappointed Japanese consumers returning their Dreamcasts and using the refund to purchase additional PlayStation software.<ref name="Toy Story and Japanese launch blues">{{cite magazine |last1=Croal |first1=N'Gai |last2=Totilo |first2=Stephen |date=September 6, 1999 |title=Who's Got Game? Beleaguered Sega Hopes to Get Back on Top in the Video Game Wars with Dreamcast, the First of a New Generation of Superfast, Supercool Fun Machines |volume=134 |issue=10 |pages=58–60 |magazine=[[Newsweek]] |id={{ProQuest|214302223}}}}</ref> ''[[Seaman (video game)|Seaman]]'', released in July 1999, became the Dreamcast's first major hit in Japan.<ref name="IGN History of Dreamcast" />{{sfn|Kent|2001|page=577}}<ref>{{cite web |last=Langan |first=Matthew |date=July 26, 1999 |title=''Famitsu Weekly'' Reviews Latest Dreamcast Games |url=https://ign.com/articles/1999/07/27/famitsu-weekly-reviews-latest-dreamcast-games |url-status=live |archive-url=https://web.archive.org/web/20141030102441/http://www.ign.com/articles/1999/07/27/famitsu-weekly-reviews-latest-dreamcast-games |archive-date=October 30, 2014 |access-date=October 30, 2014 |website=[[IGN]]}}</ref> Prior to the Western launch, Sega reduced the price of the Dreamcast to {{JPY|19900}}, effectively making it unprofitable but increasing sales. The reduction and the release of [[Namco]]'s ''[[Soulcalibur (video game)|Soulcalibur]]'' helped Sega gain 17 percent on its shares.<ref name="RetroinspectionD" />

==== North America ====
Before the Dreamcast's release, Sega was dealt a blow when [[Electronic Arts]], the largest third-party video game publisher at the time, announced it would not develop games for the system. EA's chief creative officer [[Bing Gordon]] said that Sega had "flip-flopped" on the hardware configuration, that EA developers did not want to work on it, and that Sega "was not acting like a competent hardware company". Gordon also said that Sega could not afford to give them the "kind of license that EA has had over the last five years".<ref name="gamasutra1" /> According to Stolar, president of EA at the time, Larry Probst, wanted exclusive rights as the only sports brand on Dreamcast, which Stolar could not accept due to Sega's recent {{US$|10 million}} purchase of the [[sports game]] developer [[Visual Concepts]]. While EA's ''[[Madden NFL]]'' series had established brand power, Stolar regarded Visual Concepts' ''[[NFL 2K]]'' as superior and would provide "a breakthrough experience" to launch the Dreamcast.<ref name="IGN's History of Sega" /><ref name="gamasutra1" /> While none of EA's popular sports games were released for the Dreamcast, "Sega Sports" titles developed mainly by Visual Concepts{{sfn|Kent|2001|page=581}} helped to fill that void.<ref name="gamasutra1" />

{{Quote box
| quote = Let's take the conservative estimate of 250,000 Dreamcast units at presage—that's a quarter of a million units at {{US$|long=no|200}}. We'll have a ratio of 1.5 or two games for every Dreamcast unit sold. That's half a million units of software. We think we'll be .5 to one on [[VMU]]s and peripheral items such as extra controllers and what have you. This could be a {{val|p=$|60 |to| 80 |u=million}} 24-hour period. What has ever sold {{val|p=$|60 |to| 80 |u=million}} in the first 24 hours?
| source = —Peter Moore, speaking to ''Electronic Gaming Monthly'' about the upcoming launch of the Dreamcast.<ref name="EGM122">{{cite magazine|title=Dreamcast: It's here...|magazine=Electronic Gaming Monthly|publisher=EGM Media, LLC.|issue=122|date=September 1999|page=168}}</ref>
| width = 30em
}}
Working closely with [[Midway Games]] (which developed four North American launch games for the system) and taking advantage of the ten months following the Dreamcast's release in Japan, Sega of America worked to ensure a more successful US launch with a minimum of 15 launch games.{{sfn|Kent|2001|pages=564–565}} With lingering bitterness over the Saturn's early release, Stolar repaired relations with major US retailers, with whom Sega presold 300,000 Dreamcast units.<ref name="gamasutra1" /> In addition, a pre-launch promotion enabled consumers to rent Dreamcasts from [[Hollywood Video]] starting on July 14.<ref>{{cite news |last1=Graser |first1=Marc |title=H'wood Video plays Dreamcast vidgame |url=https://variety.com/1999/biz/news/h-wood-video-plays-dreamcast-vidgame-1117503595/ |access-date=April 8, 2024 |work=[[Variety (magazine)|Variety]] |date=June 30, 1999 |archive-date=April 9, 2024 |archive-url=https://web.archive.org/web/20240409050951/https://variety.com/1999/biz/news/h-wood-video-plays-dreamcast-vidgame-1117503595/ |url-status=live }}</ref> Sega of America's senior vice president of marketing [[Peter Moore (business)|Peter Moore]],{{sfn|Kent|2001|page=565}} a fan of the attitude previously associated with Sega's brand, worked with [[FCB (advertising agency)|Foote, Cone & Belding]] and Access Communications to develop the "It's Thinking" campaign of 15-second television commercials, which emphasized the Dreamcast's hardware power.<ref name="gamasutra1"/><ref name="Dreamcast memorial">{{cite web |last=Parish |first=Jeremy |date=September 3, 2009 |title=9.9.99, A Dreamcast Memorial |url=http://www.1up.com/features/9999-dreamcast-memorial |url-status=dead |archive-url=https://archive.today/20140201012313/http://www.1up.com/features/9999-dreamcast-memorial |archive-date=February 1, 2014 |access-date=December 10, 2016 |website=[[1Up.com]]}}</ref><ref>{{cite web |date=August 26, 1998 |title=Dreamcast: The European View |url=https://ign.com/articles/1998/08/27/dreamcast-the-european-view |url-status=live |archive-url=https://web.archive.org/web/20141208064810/http://www.ign.com/articles/1998/08/27/dreamcast-the-european-view |archive-date=December 8, 2014 |access-date=December 5, 2014 |website=[[IGN]]}}</ref> According to Moore: "We needed to create something that would really intrigue consumers, somewhat apologize for the past, but invoke{{sic}} all the things we loved about Sega, primarily from the Genesis days."<ref name="gamasutra1"/> On August 11, Sega of America confirmed that Stolar had been fired, leaving Moore to direct the launch.{{sfn|Kent|2001|pages=564–565}}<ref>{{cite web |last=Kennedy |first=Sam |date=August 12, 1999 |title=A Post-Bernie Sega Speaks |url=http://www.gamespot.com/articles/a-post-bernie-sega-speaks/1100-2460797/ |url-status=live |archive-url=https://web.archive.org/web/20170705034437/https://www.gamespot.com/articles/a-post-bernie-sega-speaks/1100-2460797/ |archive-date=July 5, 2017 |access-date=December 17, 2014 |website=[[GameSpot]]}}</ref>

The Dreamcast launched in North America on September 9, 1999, at a price of {{US$|long=no|199}}, which Sega's marketing dubbed "9/9/99 for {{US$|long=no|199}}".<ref name="IGN History of Dreamcast"/>{{sfn|Kent|2001|page=564}}<ref name="Dreamcast memorial"/> Eighteen launch games were available in the US.<ref name="Dreamcast memorial"/><ref>{{cite web |last=Gantayat |first=Anoop |date=September 9, 2008 |title=IGN Classics: Dreamcast Launch Guide |url=https://ign.com/articles/2008/09/09/ign-classics-dreamcast-launch-guide |url-status=live |archive-url=https://web.archive.org/web/20141030003140/http://www.ign.com/articles/2008/09/09/ign-classics-dreamcast-launch-guide |archive-date=October 30, 2014 |access-date=October 29, 2014 |website=[[IGN]]}}</ref><ref>{{cite magazine|last=Kato |first=Matthew |url=https://www.gameinformer.com/b/features/archive/2013/10/30/which-game-console-had-the-best-launch-lineup.aspx?PostPageIndex=4 |title=Which Game Console Had The Best Launch Lineup? |magazine=[[Game Informer]] |page=4 |date=October 30, 2013 |access-date=November 5, 2014 |url-status=live |archive-url=https://web.archive.org/web/20141230142031/http://www.gameinformer.com/b/features/archive/2013/10/30/which-game-console-had-the-best-launch-lineup.aspx?PostPageIndex=4 |archive-date=December 30, 2014}}</ref> Sega set a new sales record by selling more than 225,132 Dreamcast units in 24 hours, earning {{US$|long=no|98.4 million}} in what Moore called "the biggest 24 hours in entertainment retail history".<ref name="gamasutra1"/> Within two weeks, US Dreamcast sales exceeded 500,000 units.<ref name="gamasutra1"/> By Christmas, Sega held 31 percent of the North American video game market share.<ref name="businessweek.com">{{cite magazine |author=Edwards, Cliff |date=December 18, 2000 |title=Sega vs. Sony: Pow! Biff! Whack! |url=http://www.businessweek.com/2000/00_51/b3712200.htm |url-status=dead |magazine=[[Bloomberg Businessweek|BusinessWeek]] |archive-url=https://web.archive.org/web/20131203025342/http://www.businessweek.com/2000/00_51/b3712200.htm |archive-date=December 3, 2013}}</ref> Significant launch games included ''[[Sonic Adventure]]'', the arcade [[fighting game]] ''[[Soulcalibur (video game)|Soulcalibur]]'', and [[Visual Concepts]]' football simulation ''[[NFL 2K (video game)|NFL 2K]]''.<ref name="gamasutra1"/>{{sfn|Kent|2001|page=565}} On November 4, Sega announced it had sold over one million Dreamcast units in North America.<ref name="BBC"/> The launch was marred by a glitch at one of Sega's manufacturing plants, which produced defective GD-ROMs.<ref>{{cite web |date=September 10, 1999 |title=Defective Dreamcast GD-ROMs |url=http://www.gamespot.com/articles/defective-dreamcast-gd-roms/1100-2460952/ |url-status=live |archive-url=https://web.archive.org/web/20150401191004/http://www.gamespot.com/articles/defective-dreamcast-gd-roms/1100-2460952/ |archive-date=April 1, 2015 |access-date=December 9, 2014 |website=[[GameSpot]]}}</ref>

==== Europe ====
Sega released the Dreamcast in Europe on October 14, 1999,<ref name="BBC"/> at a price of £200.<ref name="RetroinspectionD"/> By November 24, 400,000 consoles had been sold in Europe.<ref name="BBC">{{cite news |date=November 24, 1999 |title=Dreamcast beats PlayStation record |work=[[BBC News]] |url=http://news.bbc.co.uk/2/hi/business/534957.stm |url-status=live |access-date=October 29, 2014 |archive-url=https://web.archive.org/web/20131016054015/http://news.bbc.co.uk/2/hi/business/534957.stm |archive-date=October 16, 2013}}</ref> By Christmas of 1999, Sega of Europe had sold 500,000 units, six months ahead of schedule.<ref name="RetroinspectionD"/> The price was dropped to £149.99 from September 8, 2000, with sales at around 800,000 in Europe at this point.<ref name=":3" /> Announcing the drop, Jean-François Cecillon, CEO of Sega Europe, commented: "There are 'X' amount of core gamers in Europe; the early adopters. We have reached 80 or 90 per cent of them now and the market is screaming for a price reduction. We have to acknowledge these things and go with the market".<ref>{{Cite magazine |date=September 7, 2000 |title=The price is right! Dreamcast now officially available for less than £150 |magazine=[[Official Dreamcast Magazine (UK)]] |publisher=[[Dennis Publishing]] |issue=12 |pages=25}}</ref> Sales did not continue at this pace, and by October 2000, Sega had sold only about one million units in Europe.<ref name="Dreamarena">{{cite web |author=Gestalt |date=October 17, 2000 |title=Dreamcast - thanks a million |url=http://www.eurogamer.net/articles/article_29487 |url-status=live |archive-url=https://web.archive.org/web/20141022142729/http://www.eurogamer.net/articles/article_29487 |archive-date=October 22, 2014 |access-date=October 16, 2014 |website=[[Eurogamer]] |quote=}}</ref> As part of Sega's promotions of the Dreamcast in Europe, it sponsored four European [[Association football|football]] clubs: [[Arsenal F.C.|Arsenal]] (England),<ref>{{cite news |date=April 22, 1999 |title=Sonic signs for Gunners |work=[[BBC News]] |url=http://news.bbc.co.uk/1/hi/sport/football/326010.stm |access-date=July 19, 2007 |archive-date=September 11, 2019 |archive-url=https://web.archive.org/web/20190911091622/http://news.bbc.co.uk/2/hi/sport/football/326010.stm |url-status=live }}</ref> [[AS Saint-Étienne|Saint-Étienne]] (France),<ref>{{cite web |date=June 15, 1999 |title=SEGA EUROPE strikes third major European sponsorship deal with A.S. SAINT-ETIENNE |url=http://www.prnewswire.co.uk/cgi/news/release?id=50451 |url-status=live |archive-url=https://web.archive.org/web/20110608192940/http://www.prnewswire.co.uk/cgi/news/release?id=50451 |archive-date=June 8, 2011 |access-date=July 19, 2007 |website=PRnewswire.co.uk |publisher=}}</ref> [[U.C. Sampdoria|Sampdoria]] (Italy),<ref>{{cite web |date=June 11, 1999 |title=SEGA EUROPE strikes sponsorship deal with U.C. SAMPDORIA |url=http://www.prnewswire.co.uk/cgi/news/release?id=31106 |url-status=live |archive-url=https://web.archive.org/web/20110608192952/http://www.prnewswire.co.uk/cgi/news/release?id=31106 |archive-date=June 8, 2011 |access-date=July 19, 2007 |website=PRnewswire.co.uk |publisher=}}</ref> and [[Deportivo de La Coruña]] (Spain).<ref name=":3">{{cite web |date=September 1, 2000 |title=SEGA announce new price for Dreamcast |url=http://www.sega.co.jp/corp/release/2000/0901_4/ |archive-url=https://web.archive.org/web/20120819220634/http://www.sega.co.jp/corp/release/2000/0901_4/ |archive-date=August 19, 2012 |access-date=July 19, 2007 |publisher=[[Sega]]}}</ref>

==== Australia and New Zealand ====
Through the regional distributor [[Ozisoft]], the Dreamcast went on sale in Australia and New Zealand on November 30, 1999, at a price of {{A$|499|link=yes}}.<ref name="Telstra-SMH">{{cite news |last1=Crawford |first1=Kate |title=Sega's dream cast for Telstra |url=https://www.newspapers.com/newspage/119733986/ |access-date=June 14, 2021 |work=[[The Sydney Morning Herald]] |date=November 2, 1999 |page=31 |via=[[Newspapers.com]] |archive-date=June 24, 2021 |archive-url=https://web.archive.org/web/20210624195158/https://www.newspapers.com/newspage/119733986/ |url-status=live }}</ref> The launch was planned for September, but was delayed due to problems with Internet compatibility and launch game availability, then delayed again from the revised date of October 25 for various reasons.<ref>{{cite news |last=Langan |first=Matthew |date=August 2, 1999 |title=Dreamcast Delays Down Under |language=en |work=[[IGN]] |url=https://www.ign.com/articles/1999/08/03/dreamcast-delays-down-under |access-date=June 15, 2021 |archive-date=June 24, 2021 |archive-url=https://web.archive.org/web/20210624200239/https://www.ign.com/articles/1999/08/03/dreamcast-delays-down-under |url-status=live }}</ref><ref>{{cite news |last1=Norsa |first1=Gerard |date=August 25, 1999 |title=Dreamcast labelled as no new games wizard |work=[[IDG Communications|ARN]] |publisher= |url=https://www.arnnet.com.au/article/47613/dreamcast_labelled_no_new_games_wizard/ |access-date=June 15, 2021 |archive-date=June 24, 2021 |archive-url=https://web.archive.org/web/20210624195153/https://www.arnnet.com.au/article/47613/dreamcast_labelled_no_new_games_wizard/ |url-status=live }}</ref>{{efn|Representatives from Ozisoft had different answers for the delay from October 25; one responded to ''[[IGN]]'' stating that they were awaiting approval from [[Telecom New Zealand]] for both the console and the Internet access disc.<ref>{{cite news |last=Langan |first=Matthew |title=More On The Dreamcast Delay In Australia And New Zealand |url=https://www.ign.com/articles/1999/10/23/more-on-the-dreamcast-delay-in-australia-and-new-zealand |access-date=June 15, 2021 |work=IGN |date=October 22, 1999 |language=en |archive-date=June 24, 2021 |archive-url=https://web.archive.org/web/20210624201038/https://www.ign.com/articles/1999/10/23/more-on-the-dreamcast-delay-in-australia-and-new-zealand |url-status=live }}</ref> Another said, via ''ARN'', that the delay was caused by high demand for international shipping along with chip manufacturing problems resulting from the [[1999 Jiji earthquake|then-recent earthquake in Taiwan]]; he also noted that Sega reallocated 50,000 Dreamcast units meant for the November 30 launch out of Australia due to heavy demand elsewhere.<ref>{{cite news |last1=Norsa |first1=Gerard |title=Dreamcast delayed as retailers buy up |url=https://www.arnnet.com.au/article/101747/dreamcast_delayed_retailers_buy_up/ |access-date=June 15, 2021 |work=ARN |publisher=IDG Communications |date=November 3, 1999 |archive-date=June 24, 2021 |archive-url=https://web.archive.org/web/20210624195742/https://www.arnnet.com.au/article/101747/dreamcast_delayed_retailers_buy_up/ |url-status=live }}</ref>}} There were severe problems at launch; besides a severe shortage of the consoles, only six of the thirty planned launch games were available for purchase on day one with no [[first-party software]] included, and additional peripherals were not available in stores.<ref>{{cite news |last=Langan |first=Matthew |date=November 30, 1999 |title=Dreamcast Hits Australia |language=en |work=[[IGN]] |url=https://www.ign.com/articles/1999/12/01/dreamcast-hits-australia |access-date=June 15, 2021 |archive-date=June 24, 2021 |archive-url=https://web.archive.org/web/20210624200117/https://www.ign.com/articles/1999/12/01/dreamcast-hits-australia |url-status=live }}</ref>

The Ozisoft representative Steve O'Leary, in a statement released the day of launch, explained that the [[Australian Customs Service]] had impounded virtually all the supplied launch software, including demo discs, due to insufficient labeling of their [[country of origin]]; Ozisoft had received them only two days before launch, resulting in few games that were catalogued and prepared for shipment in time. O'Leary also said that the Dreamcast's high demand in other markets had reduced the number of peripherals allotted to the region.<ref name="Ozisoft launch explanation - IGN">{{cite news |last1=Langan |first1=Matthew |date=December 1, 1999 |title=Update On Dreamcast Launch In Australia |language=en |work=[[IGN]] |url=https://www.ign.com/articles/1999/12/02/update-on-dreamcast-launch-in-australia |access-date=June 16, 2021 |archive-date=June 24, 2021 |archive-url=https://web.archive.org/web/20210624195719/https://www.ign.com/articles/1999/12/02/update-on-dreamcast-launch-in-australia |url-status=live }}</ref> Further complicating matters was the lack of an internet disc due to localization problems, and delays in securing an ISP contract, which was done through [[Telstra]] the day before launch. The online component was not ready until March 2000, at which point Ozisoft sent the necessary software to users who had sent in a filled-out [[reply paid]] card included with the console.<ref>{{cite news |last1=Schouten |first1=Ryoni |date=March 23, 2000 |title=DC Internet Finally Hits Australia |language=en |work=[[IGN]] |url=https://www.ign.com/articles/2000/03/24/dc-internet-finally-hits-australia |access-date=June 16, 2021 |archive-date=June 24, 2021 |archive-url=https://web.archive.org/web/20210624195619/https://www.ign.com/articles/2000/03/24/dc-internet-finally-hits-australia |url-status=live }}</ref><ref name="Australia launch - Edge">{{Cite magazine |date=January 2000 |title=Dreamcast blunders down under |url= |magazine=[[Edge (magazine)|Edge]] |location= |publisher= |issue=80 |page=7 |issn= |access-date=}}</ref><ref>{{cite news |date=March 16, 2000 |title=Big Pond casts net dreams |language=en-AU |work=[[PC World]] |publisher= |url=https://www.pcworld.idg.com.au/article/105542/big_pond_casts_net_dreams/ |access-date=June 16, 2021 |archive-date=June 24, 2021 |archive-url=https://web.archive.org/web/20210624215842/https://www.pcworld.idg.com.au/article/105542/big_pond_casts_net_dreams/ |url-status=live }}</ref> The poor launch, combined with a lack of advertising and a high price point, produced lackluster sales in Australia; two large retail chains reported a combined total of 13 console sales over the first few days after launch.<ref name="Australia launch - Edge" /><ref>{{cite news |last1=Davis |first1=Cameron |date=April 27, 2000 |title=Dreamcast's Dismal Aussie Outing |work=[[GameSpot]] |url=https://www.gamespot.com/articles/dreamcasts-dismal-aussie-outing/1100-2460893/ |access-date=June 16, 2021 |archive-date=June 24, 2021 |archive-url=https://web.archive.org/web/20210624195151/https://www.gamespot.com/articles/dreamcasts-dismal-aussie-outing/1100-2460893/ |url-status=live }}</ref>

=== Competition ===
[[File:PS2-Fat-Console-Set.jpg|thumb|The [[PlayStation 2|PS2]] provided tough competition for the Dreamcast.]]
Though the Dreamcast launch was successful, Sony held 60 percent of the overall video game market share in North America with the PlayStation at the end of 1999.<ref name="BBC"/> On March 2, 1999, Sony revealed the first details of the [[PlayStation 2]] (PS2), which [[Ken Kutaragi]] said would allow video games to convey unprecedented emotions.{{sfn|Kent|2001|pages=560–561}}<ref>{{cite magazine |last=Parkin |first=Simon |date=June 25, 2014 |title=A history of videogame hardware: Sony PlayStation 2 |url=http://www.edge-online.com/features/a-history-of-videogame-hardware-playstation-2/ |url-status=dead |archive-url=https://web.archive.org/web/20141129031500/http://www.edge-online.com/features/a-history-of-videogame-hardware-playstation-2/ |archive-date=November 29, 2014 |access-date=March 5, 2015 |magazine=[[Edge (magazine)|Edge]]}}</ref> Sony estimated the PS2 could render 7.5 million<ref>{{Cite web |date=2003 |title=Reaching for the Limits of PS2 Performance: How Far Have We Got? |url=http://www.technology.scee.net/sceesite/files/presentations/PSP/HowFarHaveWeGot.pdf#page=32 |url-status=dead |archive-url=https://web.archive.org/web/20031210074645/http://www.technology.scee.net/sceesite/files/presentations/PSP/HowFarHaveWeGot.pdf#page=32 |archive-date=December 10, 2003 |access-date=May 29, 2022 |publisher=[[Sony Interactive Entertainment|Sony Computer Entertainment Europe]]}}</ref> to 16 million polygons per second, whereas independent estimates ranged from 3 million to 20 million,<ref name="Gamecube or PS2?">{{cite web |last=Casamassina |first=Matt |date=November 3, 2000 |title=Gamecube Versus PlayStation 2 |url=https://ign.com/articles/2000/11/04/gamecube-versus-playstation-2 |url-status=live |archive-url=https://web.archive.org/web/20141104021340/http://www.ign.com/articles/2000/11/04/gamecube-versus-playstation-2 |archive-date=November 4, 2014 |access-date=November 14, 2014 |website=[[IGN]] |quote=}}</ref>{{sfn|Kent|2001|page=560}} compared to Sega's estimates of more than 3 million to 6 million for the Dreamcast.<ref name="EGM115"/><ref name="Unified"/> The PS2 would also use the [[DVD-ROM]] format, which could hold substantially more data than the Dreamcast's GD-ROM,{{sfn|Kent|2001|page=561}} and would be backwards-compatible with hundreds of popular PlayStation games.<ref name="Finn"/>{{sfn|Kent|2001|page=561}} Sony's specifications appeared to render the Dreamcast obsolete months before its US launch, although reports later emerged that the PS2 was not as powerful as expected and difficult to develop on.<ref name="Innovation and competition"/><ref name="Gamecube or PS2?"/>{{sfn|Kent|2001|pages=561, 568–569}} The same year, Nintendo announced that its next console, the [[GameCube]], would meet or exceed anything on the market, and Microsoft began development of its own console, the [[Xbox (console)|Xbox]].{{sfn|Kent|2001|pages=563, 574}}{{sfn|DeMaria|Wilson|2004|page=313}}<ref>{{cite magazine |last=Parkin |first=Simon |date=June 27, 2014 |title=A history of videogame hardware: Xbox |url=http://www.edge-online.com/features/a-history-of-videogame-hardware-xbox/ |url-status=dead |archive-url=https://web.archive.org/web/20141121024245/http://www.edge-online.com/features/a-history-of-videogame-hardware-xbox/ |archive-date=November 21, 2014 |access-date=March 5, 2015 |magazine=[[Edge (magazine)|Edge]] |quote=}}</ref>

US Dreamcast sales—which exceeded 1.5 million by the end of 1999<ref>{{cite web |last=Davis |first=Jim |date=January 11, 2001 |title=Sega's sales fly despite business woes |url=http://news.cnet.com/Segas-sales-fly-despite-business-woes/2100-1040_3-235509.html |url-status=live |archive-url=https://web.archive.org/web/20141031031716/http://news.cnet.com/Segas-sales-fly-despite-business-woes/2100-1040_3-235509.html |archive-date=October 31, 2014 |access-date=October 30, 2014 |website=[[CNET|CNET News]] |publisher=}}</ref>—began to decline as early as January 2000.{{sfn|Kent|2001|page=566}} Poor Japanese sales contributed to Sega's ¥42.88 billion ($404 million) consolidated net loss in the fiscal year ending March 2000, which followed a loss of ¥42.881 billion the previous year and marked Sega's third consecutive annual loss.<ref name="2000 report">{{cite web |title=Sega Corporation Annual Report 2000 |url=http://www.segasammy.co.jp/english/ir/pdf/ir/kako/sega_AR_all_2000.pdf |url-status=dead |archive-url=https://web.archive.org/web/20070925210504/http://www.segasammy.co.jp/english/ir/pdf/ir/kako/sega_AR_all_2000.pdf |archive-date=September 25, 2007 |access-date=December 9, 2014 |publisher=[[Sega]] |pages=10–12, 18}}</ref><ref>{{cite news|url=http://news.bbc.co.uk/2/hi/business/659554.stm |title=Sega warns of losses |date=February 28, 2000 |work=[[BBC News Online]] |access-date=November 10, 2013 |url-status=live |archive-url=https://web.archive.org/web/20131111081448/http://news.bbc.co.uk/2/hi/business/659554.stm |archive-date=November 11, 2013}}</ref> Although Sega's overall sales for the term increased 27.4%, and Dreamcast sales in North America and Europe greatly exceeded expectations, this coincided with a decrease in profitability due to the investments required to launch the Dreamcast in Western markets and poor software sales in Japan.<ref name="2000 report"/> At the same time, increasingly poor market conditions reduced the profitability of Sega's Japanese arcade business, prompting Sega to close 246 locations.<ref name="2000 report"/>{{sfn|Kent|2001|page=582}}

Moore became the president and chief operating officer of Sega of America on May 8, 2000.<ref>{{Cite web |last1=Kennedy |first1=Sam |last2=Trueman |first2=Doug |date=May 8, 2000 |title=Sega announced new president, COO Peter Moore |url=https://www.gamespot.com/articles/sega-announced-new-president-coo-peter-moore/1100-2565545/ |access-date=July 3, 2022 |website=[[GameSpot]] |language=en-US |archive-date=July 3, 2022 |archive-url=https://web.archive.org/web/20220703220433/https://www.gamespot.com/articles/sega-announced-new-president-coo-peter-moore/1100-2565545/ |url-status=live }}</ref> He and Sega's developers focused on the US market to prepare for the upcoming launch of the PS2.{{sfn|Kent|2001|pages=578–579}} To that end, Sega of America launched its own internet service provider, Sega.com, led by CEO Brad Huang.<ref name="Superhero" />{{sfn|Kent|2001|page=571}}<ref name="SegaNet launch" /> On September 7, 2000, Sega.com launched [[SegaNet]], the Dreamcast's [[Online games|internet gaming]] service, at a subscription price of $21.95 per month.<ref name="SegaNet launch">{{cite web |last=Satterfield |first=Shane |date=September 7, 2000 |title=SegaNet Launches |url=http://www.gamespot.com/articles/seganet-launches/1100-2625699/ |url-status=live |archive-url=https://web.archive.org/web/20150713030636/http://www.gamespot.com/articles/seganet-launches/1100-2625699/ |archive-date=July 13, 2015 |access-date=October 30, 2014 |website=[[GameSpot]]}}</ref>{{sfn|Kent|2001|page=579}} Although Sega had previously released only one Dreamcast game in the US that featured online multiplayer, ''[[ChuChu Rocket!]]'',{{sfn|Kent|2001|page=579}} the launch of SegaNet combined with the release of ''[[NFL 2K1]]'', with a robust online component, was intended to increase demand for the Dreamcast in the US market.<ref name="SegaNet launch" />{{sfn|Kent|2001|pages=578–579, 581}} The service later supported games including ''[[Bomberman Online]]'', ''[[Quake III Arena]]'', and ''[[Unreal Tournament]]''.<ref name="gamasutra1" /> The September 7 launch coincided with a new advertising campaign to promote SegaNet, including advertising on the [[MTV Video Music Awards]] that day, which Sega sponsored for the second consecutive year.{{sfn|Kent|2001|page=579}}<ref>{{cite web|url=http://www.thefreelibrary.com/Sega.com+Launches+the+World's+First+Online+Console+Gaming+Network%2c...-a065062861|title=Sega.com Launches the World's First Online Console Gaming Network, SegaNet|work=BusinessWire|date=September 7, 2000|access-date=December 3, 2014|url-status=live|archive-url=https://web.archive.org/web/20141209074409/http://www.thefreelibrary.com/Sega.com+Launches+the+World%27s+First+Online+Console+Gaming+Network%2C...-a065062861|archive-date=December 9, 2014}}</ref> Sega employed aggressive pricing strategies around online gaming; in Japan, every Dreamcast sold included a free year of internet access, which Okawa personally paid for.<ref name="Okawa PSO">{{cite web|url=http://www.gamestm.co.uk/uncategorised/behind-the-scenes-phantasy-star-online/ |title=Behind The Scenes: Phantasy Star Online |work=[[GamesTM]] |access-date=October 24, 2014 |url-status=live |archive-url=https://web.archive.org/web/20141021063050/http://www.gamestm.co.uk/uncategorised/behind-the-scenes-phantasy-star-online/ |archive-date=October 21, 2014 |date=February 16, 2011}}</ref> Prior to the launch of SegaNet, Sega had already offered a $200 rebate to any Dreamcast owner who purchased two years of internet access from Sega.com.<ref>{{cite web |last=Thurrot |first=Paul |date=April 4, 2000 |title=Sega unveils plans for free Dreamcast, online gaming |url=http://windowsitpro.com/windows-server/sega-unveils-plans-free-dreamcast-online-gaming |url-status=dead |archive-url=https://web.archive.org/web/20141031032052/http://windowsitpro.com/windows-server/sega-unveils-plans-free-dreamcast-online-gaming |archive-date=October 31, 2014 |access-date=October 30, 2014 |work=Windows IT Pro}}</ref><ref>{{cite web|url=http://www.thefreelibrary.com/Sega+Announces+Formation+of+New+Company%2c+Sega.com%2c+Inc.%3b+Offers...-a061234970|title=Sega Announces Formation of New Company, Sega.com, Inc.; Offers Rebate On Sega Dreamcast Hardware for SegaNet ISP Subscribers|work=BusinessWire|date=April 4, 2000|access-date=December 3, 2014|url-status=live|archive-url=https://web.archive.org/web/20141209052348/http://www.thefreelibrary.com/Sega+Announces+Formation+of+New+Company%2c+Sega.com%2c+Inc.%3b+Offers...-a061234970|archive-date=December 9, 2014}}</ref> To increase SegaNet's appeal in the US, Sega dropped the price of the Dreamcast to {{US$|long=no|149}} (compared to the PS2's US launch price of {{US$|long=no|299}}) and offered a rebate for the full {{US$|long=no|149}} price of a Dreamcast, and a free Dreamcast keyboard, with every 18-month SegaNet subscription.<ref name="RetroinspectionD" /><ref name="SegaNet launch" />{{sfn|Kent|2001|page=579}}

=== Decline ===
Moore said that the Dreamcast would need to sell 5 million units in the US by the end of 2000 to remain a viable platform; Sega fell short of this goal, with some 3 million units sold.<ref name="businessweek.com" />{{sfn|Kent|2001|pages=581, 588}} Moreover, Sega's attempts to spur increased Dreamcast sales through lower prices and cash rebates caused escalating financial losses.<ref>{{cite web|url=http://usatoday30.usatoday.com/tech/techreviews/games/2001-01-23-dreamcast.htm |title=Dreamcast may be discontinued, Sega says |work=[[USA Today]] |date=January 24, 2001 |access-date=December 9, 2014 |url-status=live |archive-url=https://web.archive.org/web/20141225010445/http://usatoday30.usatoday.com/tech/techreviews/games/2001-01-23-dreamcast.htm |archive-date=December 25, 2014}}</ref> Instead of an expected profit, for the six months ending September 2000, Sega posted a {{¥|17.98 billion}} ({{US$|long=no|163.11 million}}) loss, with a projected year-end loss of {{¥|23.6 billion}}.<ref>{{cite news |last=Smith |first=Tony |date=November 24, 2000 |title=Sega full-year loss to widen |work=[[The Register]] |url=https://www.theregister.co.uk/2000/11/24/sega_fullyear_loss_to_widen/ |url-status=live |access-date=November 10, 2013 |archive-url=https://web.archive.org/web/20131111081410/https://www.theregister.co.uk/2000/11/24/sega_fullyear_loss_to_widen/ |archive-date=November 11, 2013}}</ref> This estimate more than doubled to {{¥|58.3 billion}},<ref name="Financial statement">{{cite web |date=February 1, 2001 |title=Sega Issues Financial Statement |url=https://ign.com/articles/2001/02/02/sega-issues-financial-statement |url-status=live |archive-url=https://web.archive.org/web/20141208064813/http://www.ign.com/articles/2001/02/02/sega-issues-financial-statement |archive-date=December 8, 2014 |access-date=December 5, 2014 |website=[[IGN]]}}</ref> and in March 2001, Sega posted a consolidated net loss of {{¥|51.7 billion}} ({{US$|long=no|417.5 million}}).<ref>{{cite web |date=August 2001 |title=Sega Corporation Annual Report 2001 |url=http://www.segasammy.co.jp/english/ir/library/pdf/printing_archive/2001/e_sega_annual_tuuki_2001.pdf |url-status=live |archive-url=https://web.archive.org/web/20150924100120/http://www.segasammy.co.jp/english/ir/library/pdf/printing_archive/2001/e_sega_annual_tuuki_2001.pdf |archive-date=September 24, 2015 |access-date=December 9, 2014 |publisher=[[Sega]] |page=22}}</ref> While the PS2's October 26 US launch was marred by shortages, this did not benefit the Dreamcast as much as expected; many consumers continued to wait for a PS2, while the [[PSOne|PSone]], a remodeled version of the original PlayStation, became the bestselling console in the US at the start of the 2000 holiday season.<ref name="businessweek.com" /><ref>{{cite web |last=Becker |first=David |date=December 5, 2000 |title=Old PlayStation tops holiday game console sales |url=http://news.cnet.com/Old-PlayStation-tops-holiday-game-console-sales/2100-1040_3-249457.html |url-status=live |archive-url=https://web.archive.org/web/20141031031819/http://news.cnet.com/Old-PlayStation-tops-holiday-game-console-sales/2100-1040_3-249457.html |archive-date=October 31, 2014 |access-date=October 30, 2014 |website=[[CNET|CNET News]] |publisher=}}</ref>{{sfn|Kent|2001|pages=585–588}} According to Moore, "The PlayStation 2 effect that we were relying upon did not work for us... People will hang on for as long as possible... What effectively happened is the PlayStation 2 lack of availability froze the marketplace."{{sfn|Kent|2001|page=588}} Eventually, Sony and Nintendo held 50 and 35 percent of the US video game market, while Sega held only 15 percent.<ref name="RetroinspectionD" /> According to Bellfield, Dreamcast software sold at an 8-to-1 ratio with the hardware, but the small install base meant this did not produce enough revenue to keep it viable.{{sfn|Kent|2001|page=585}} During the course of 2000, the PlayStation had sold five times more than Dreamcast despite being five year old hardware.<ref>{{Cite web |date=2001-01-24 |title=Sega console fading fast (12/21/2000) |url=http://www0.mercurycenter.com/business/top/037940.htm |access-date=2024-08-22 |website=Mercury Center|archive-url=https://web.archive.org/web/20010124075700/http://www0.mercurycenter.com/business/top/037940.htm |archive-date=January 24, 2001 }}</ref>{{Quote box
| quote = We had a tremendous 18 months. Dreamcast was on fire - we really thought that we could do it. But then we had a target from Japan that said we had to make x hundreds of millions of dollars by the holiday season and shift x millions of units of hardware, otherwise, we just couldn't sustain the business. Somehow I got to make that call, not the Japanese. I had to fire a lot of people; it was not a pleasant day. So on {{nowrap|January 31st 2001}} we said Sega is leaving hardware. We were selling 50,000 units a day, then 60,000, then 100,000, but it was just not going to be enough to get the critical mass to take on the launch of PS2. It was a big stakes game. Sega had the option of pouring in more money and going bankrupt and they decided they wanted to live to fight another day.
| source = —Peter Moore, on the Dreamcast's discontinuation<ref name="Guardian">{{cite news|last=Stuart |first=Keith |url=https://www.theguardian.com/technology/gamesblog/2008/sep/11/gamesinterviews.microsoft1 |title=Peter Moore Interview: Part One |newspaper=The Guardian |date=September 15, 2008 |access-date=December 3, 2014 |url-status=live |archive-url=https://web.archive.org/web/20141209163957/http://www.theguardian.com/technology/gamesblog/2008/sep/11/gamesinterviews.microsoft1 |archive-date=December 9, 2014}}</ref>
| width = 30em
}}

On May 22, 2000, Okawa replaced Irimajiri as president of Sega.{{sfn|Kent|2001|pages=581–582}} Okawa had long advocated that Sega abandon the console business.{{sfn|Kent|2001|pages=577, 582}} His sentiments were not unique; Sega co-founder David Rosen had "always felt it was a bit of a folly for them to be limiting their potential to Sega hardware", and Stolar had suggested Sega should have sold their company to Microsoft.<ref name="IGN's History of Sega" /><ref name="Rosen">{{cite magazine |last=Kent |first=Steven L. |author-link= |date=April 2001 |title=A Few Words on Sega, From the Founder |magazine=[[Next Generation (magazine)|Next Generation]] |publisher= |volume=3 |issue=4 |page=9 |ref=none<!--this may be undone, but note that this will cause a harv citation error-->}}</ref> In September 2000, in a meeting with Sega's Japanese executives and the heads of the company's major Japanese game development studios, Moore and Bellfield recommended that Sega abandon its console business and focus on software, prompting the studio heads to walk out.<ref name="gamasutra1" />

Amid speculation and rumors, Sega executives denied to the media that it would leave the console hardware business.<ref>{{Cite web |date=2001-01-25 |title=dreamcast.ign.com: Sega Sinks Console Efforts? |url=http://dreamcast.ign.com/news/30435.html |access-date=2024-08-22 |archive-url=https://web.archive.org/web/20010125051600/http://dreamcast.ign.com/news/30435.html |archive-date=January 25, 2001 }}</ref> Nevertheless, on January 31, 2001, Sega announced the discontinuation of the Dreamcast after March 31 and the restructuring of the company as a "platform-agnostic" third-party developer,{{sfn|Kent|2001|pages=588–589}}<ref>{{cite web |last=Ahmed |first=Shahed |date=January 31, 2001 |title=Sega announces drastic restructuring |url=http://www.gamespot.com/articles/sega-announces-drastic-restructuring/1100-2680518/ |url-status=live |archive-url=https://web.archive.org/web/20150510200945/http://www.gamespot.com/articles/sega-announces-drastic-restructuring/1100-2680518/ |archive-date=May 10, 2015 |access-date=December 9, 2014 |website=[[GameSpot]]}}</ref> although with continued Dreamcast software support for some time.<ref name=":4" /> Sega also announced a price reduction to {{US$|long=no|99}} to eliminate its unsold inventory, which was estimated at 930,000 units as of April 2001.<ref>{{cite web |date=October 23, 2001 |title=Revisions to Annual Results Forecasts |url=https://www.segasammy.co.jp/english/ir/release/pdf/past/sega/2002/20011030.pdf |url-status=dead |archive-url=https://web.archive.org/web/20150726015556/https://www.segasammy.co.jp/english/ir/release/pdf/past/sega/2002/20011030.pdf |archive-date=July 26, 2015 |access-date=November 4, 2015 |publisher=[[Sega]] |page=4}}</ref><ref name="Pulls plug">{{cite magazine |date=April 2001 |title=Sega pulls plug on Dreamcast |magazine=[[Next Generation (magazine)|Next Generation]] |publisher= |volume=3 |issue=4 |pages=7–9}}</ref> After a further reduction to $79, the Dreamcast was cleared out of stores at {{US$|long=no|49.95}}.<ref>{{cite web |last=Ahmed |first=Shahed |date=November 21, 2001 |title=Sega drops Dreamcast price again |url=http://www.gamespot.com/articles/sega-drops-dreamcast-price-again/1100-2826685/ |url-status=live |archive-url=https://web.archive.org/web/20151102005656/http://www.gamespot.com/articles/sega-drops-dreamcast-price-again/1100-2826685/ |archive-date=November 2, 2015 |access-date=December 9, 2014 |website=[[GameSpot]]}}</ref><ref>{{cite magazine|title=Sega Ships the "Dreamlast"|magazine=[[GamePro]]|volume=14|issue=162|date=March 2002|page=30}}</ref> The final Dreamcast unit manufactured was autographed by the heads of all nine of Sega's internal game development studios, plus the heads of Visual Concepts and Sega's sound studio Wave Master, and given away with all 55 first-party Dreamcast games through a competition organized by ''[[GamePro]]''.<ref>{{cite magazine |date=April 2002 |title=Dreamcast Collector's Edition Giveaway |magazine=[[GamePro]] |volume=14 |issue=163 |page=117}}</ref> Okawa, who had previously loaned Sega {{US$|long=no|500 million}} in 1999, died on March 16, 2001; shortly before his death, he forgave Sega's debts to him and returned his {{US$|long=no|695 million}} worth of Sega and CSK stock, helping Sega survive the transition to third-party development.{{sfn|Kent|2001|pages=582, 589}}<ref>{{cite web |last=Stout |first=Kristie Lu |date=March 19, 2001 |title=Late Sega exec leaves legacy, new leadership |url=http://edition.cnn.com/2001/BUSINESS/asia/03/18/tokyo.okawalegacy/index.html |url-status=live |archive-url=https://web.archive.org/web/20140330062832/http://edition.cnn.com/2001/BUSINESS/asia/03/18/tokyo.okawalegacy/index.html |archive-date=March 30, 2014 |access-date=October 31, 2014 |website=[[CNN]] |publisher=}}</ref> As part of this restructuring, nearly one third of Sega's Tokyo workforce was laid off in 2001.<ref>{{cite magazine |date=May 31, 2007 |title=Sega: The Blue Sky Company |url=http://www.edge-online.com/features/sega-blue-sky-company/ |url-status=dead |archive-url=https://web.archive.org/web/20141129025823/http://www.edge-online.com/features/sega-blue-sky-company/ |archive-date=November 29, 2014 |access-date=March 5, 2015 |magazine=[[Edge (magazine)|Edge]]}}</ref>

=== Aftermath and reaction ===
9.13 million<!-- Do NOT change to "10.6 million"; see talk page on the overall sales number --> Dreamcast units were sold worldwide.<ref name="Routledge" /> Despite the discontinuation of Dreamcast hardware, Sega continued to support the system and had stated that more than 30 new titles were confirmed for release for the remainder of 2001.<ref name=":4">{{Cite web |date=2001-02-01 |title=dreamcast.ign.com: The Death of Dreamcast: Sega Confirms Price Drop, Inventory Reduction, and More |url=http://dreamcast.ign.com/news/30854.html |access-date=2024-08-22 |archive-url=https://web.archive.org/web/20010201080800/http://dreamcast.ign.com/news/30854.html |archive-date=February 1, 2001 }}</ref> In the United States, official game releases continued until the end of the first half of 2002.<ref name="IGN's History of Sega" /> Sega continued to repair Dreamcast units until 2007.<ref>{{cite magazine |date=April 2, 2007 |title=Death of the Dreamcast Official |url=http://www.edge-online.com/news/death-dreamcast-official/ |url-status=dead |archive-url=https://web.archive.org/web/20141204232812/http://www.edge-online.com/news/death-dreamcast-official/ |archive-date=December 4, 2014 |access-date=March 5, 2015 |magazine=[[Edge (magazine)|Edge]]}}</ref> Many hardware developers that worked on the Dreamcast also joined [[pachinko]] and [[Slot machine|pachislot]] company [[Sammy Corporation]], who soon merged with Sega. Hideki Sato pushed for leftover Dreamcast parts being used as displays in the machines that Sammy develops, including the very successful ''[[Fist of the North Star#Pachinko|Fist of the North Star]]'' pachinko machines.<ref>{{Cite web |date=2023-11-21 |title=『Beep21』2つのセガサターン最初のモックアップを本邦初公開！ 真・セガハード列伝─セガサターンデザイン秘話【前編】｜Beep21 |url=https://note.com/beep21/n/n0f7ca2dc6f32 |access-date=2023-12-22 |website=note（ノート） |language=ja}}</ref> 

After five consecutive years of financial losses, Sega finally posted a profit for the fiscal year ending March 2003.<ref>{{cite web |title=Sega Corporation Annual Report 2004 |url=http://www.segasammy.co.jp/english/ir/pdf/ir/kako/sega_AR_all_2004.pdf |url-status=dead |archive-url=https://www.webcitation.org/5mHPmG7gs?url=http://www.segasammy.co.jp/english/ir/pdf/ir/kako/sega_AR_all_2004.pdf |archive-date=December 25, 2009 |access-date=December 9, 2014 |publisher=[[Sega]] |page=2}}</ref>

The announcement of Sega's exit from hardware was met with enthusiasm. According to ''IGN''{{'}}s Travis Fahs, "Sega was a creatively fertile company with a rapidly expanding stable of properties to draw from. It seemed like they were in a perfect position to start a new life as a developer/publisher."<ref name="IGN's History of Sega" /> Former [[Working Designs]] president Victor Ireland wrote, "It's actually a good thing&nbsp;... because now Sega will survive, doing what they do best: software."<ref name="Dreamcast memorial" /> The staff of ''[[Newsweek]]'' wrote that "from ''[[Sonic the Hedgehog|Sonic]]'' to ''[[Shenmue]]'', Sega's programmers have produced some of the most engaging experiences in the history of interactive media&nbsp;... Unshackled by a struggling console platform, this platoon of world-class software developers can do what they do best for any machine on the market."<ref>{{cite web |date=January 30, 2001 |title=Sega Gets Hip to Reality |url=http://www.newsweek.com/sega-gets-hip-reality-150639 |url-status=live |archive-url=https://web.archive.org/web/20150218093630/http://www.newsweek.com/sega-gets-hip-reality-150639 |archive-date=February 18, 2015 |access-date=February 16, 2015 |work=[[Newsweek]]}}</ref> ''[[Game Informer]]'', commenting on Sega's tendency to produce under-appreciated [[cult classics]], wrote: "Let us rejoice in the fact that Sega is making games equally among the current console crop, so that history will not repeat itself."<ref>{{cite magazine|title=Classic Reviews: Burning Rangers|magazine=Game Informer|issue=110|volume=12|date=June 2002|page=104}}</ref>