Retro Active: Dream On – The All Too Short Life of Sega’s Dreamcast

It was the late 90s. Sony’s Playstation had revolutionized gaming consoles. Sure, Nintendo was trying to compete with the Nintendo 64, but mostly to no avail. Sega was definitely on the outside looking in, with commercial failures of the 32X, Sega CD and Saturn. In 1997, Sega decided it was time to try something new, and thus was born the Sega Dreamcast.

Sega’s last stand in console gaming was a truly revolutionary console. For the couple of years that it was out, there was nothing that could really compare to it as far as quality gaming experience. And yet, merely 18 months after the console made it’s North American release, Sega pulled the plug on its “savior” and dropped out of the console business entirely.

So how is it that a console that was only around for a couple of years is considered by many, myself included, to be their favorite console of all time?

Sega’s Lost Reputation

Sega had made a huge splash in North America with the Sega Genesis, providing a true rival for Nintendo. Though the Super Nintendo did better overall in the US, the Genesis still managed to carve its mark into console gaming stateside, due at least in part to it being released before the SNES.

But then Sega started making reactionary decisions that began to turn gamers against them. Decisions like releasing the Sega CD, 32X and Saturn in rapid succession. Gamers were suddenly faced with the fact that, in order to keep up, they were going to have to fork out a ton of new money for consoles from Sega, and that coupled with the rising popularity of the Playstation really began to tarnish the name Sega in gaming console realms.

The Sega CD, 32x and Saturn all but ruined Sega’s reputation.

With this in mind, it was not surprising that gamers did not react well to the news in 1997 that Sega was killing the Saturn. It really looked like Sega was just about ready to leave the console business entirely, except for one thing: rumors of a new system in the works that was supposed to blow the competition away. Even as the details of this system were released, many critics questioned whether Sega’s reputation had been hurt too much by its recent failures to compete in the console market, no matter how good the system would turn out to be.

9/9/99 – Enter the Dreamcast

As the North American release of the Dreamcast approached, word started to get out that Sega may just have created the console that could win gamers back. Sega pushed the 9/9/99 release date and the tag line “It’s thinking” into the minds of gamers, while in store displays featuring launch titles Soul Caliber, Sonic Adventure, Powerstone and Hydro Thunder stunned critics. As the date drew near, gamers as a whole seemed to decide the newest Sega offering was worth picking up, with a record setting 300,000 units preordered. In the first two weeks after its launch in the US, Sega sold 500,000 Dreamcasts. It looked for all intents and purposes like Sega was back.

The Dreamcast was revolutionary in many ways. It was the first console to run Windows as an operating system, allowing programmers to create games without having to learn a completely new way of programming. The Virtual Memory Card had a built in screen, allowing for data swapping and play calling in sports games without giving other players in the room any idea what was called. It was the first gaming console to come with a modem included, allowing both for the system to be used as a web browser and for online gaming.

The Dreamcast seemed to have a lot of things going for it. Excellent launch titles, the introduction of online play and a phenomenal list of launch titles with more great games appearing consistently began to win over even the toughest of critics. Sega had even managed to turn what should have been its biggest handicap into a major asset.

The Dreamcastgained a lot of momentum, thanks to release titles like Soul Calibur and NFL 2k

EA Sports Meets Its Rival

When Sega announced it was pulling the plug on the Saturn, EA Decided it had had enough. The company announced it would not produce any sports titles for any new Sega consoles, including this Saturn. This meant that there was not going to be an NBA Live or Madden game for the Dreamcast, something that was not well received by gamers. Sega seemed to be out of options, since there were not many serious competitors to the EA Sports titles, especially when it comes to basketball and football. So Sega decided to do the unthinkable and make its own sports games.

While people may have been laughing when Sega first announced the 2K Sports Series, they were not laughing long. NFL 2K blew people away with its gameplay, graphics and online functionality. Not only did many people come to like the game better than Madden, but it outsold the EA powerhouse by 49,000 units in the first two weeks of release. NBA 2K surprised people as well, and it was not long before people began to realize that that 2K Sports was not just some quick fix Sega hoped would fill the void left by EA, but that Sega had truly worked to create a competitor in console sports gaming.

So with all of this going for the system, why did the Dreamcast Fail?

There were many factors, but in the end one thing more than any other lead to its downfall.

Sony Scores the Knockout

In March of 99, Sony announced plans for the Playstation 2. The system would not be out for another year, but Sony hoped announcing it would be enough to help hold in interest in the Sony branded console. The new console would have twice the graphical power of the PS1, and it would be able to play DVDs, a technology that was just getting started at the time. This was one of the key features of the system, especially since it would be introduced at a price that would make it one of the most affordable DVD players on the market.

Buzz about the PS2 built quickly. The only problem was Sony could not keep up with demand, and the company announced it would be cutting back its quantity for US release. Going into Christmas of 2000, people could not get a hold of PS2s, and Sega figured it could could capitalize on Sony’s misfortune buy convincing gamers to buy the Dreamcast instead. Thing is, it became apparent that people were more willing to wait for the PS2 than they were to buy the Dreamcast. Even a drastic price cut and offering to give the system to gamers for free for signing up for SegaNet could not stir up enough interest to keep the console going.

Despite offering huge discounts on the system and having amazing games like Jet Grind Radio, Marvel VS Capcom 2 and Shenmue, the Dreamcast could not compete with the PS2

January of 2001, Sega announced it would no longer be making Dreamcasts come March. The lack of DVD player and the poor reputation carried over from its previous failures was more than the company could overcome. Though Japanese games would still be made for the system as late as 2004, the last US release for the system was NHL 2K2 in 2002.

In the end, Sega was a victim of its own misfortune. Despite the fact the Dreamcast was ahead of its time, the lack of DVD support and gamers’ distrust thanks to the companies previous console mistakes doomed it to an early end.

So now you know why the Dreamcast failed. Why do we like it so much?

Well, that’s a whole different discussion. We’ll save that for the Retro Active podcast.