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[Mysterious]

I wouldn't call 10.6 million units in ~2 years a failure.

It was released on November 27, 1998 in Japan and September 9, 1999 in North America and was discontinued on March 30, 2001 (before the Xbox and Gamecube even entered the market). That would mean it was only in the North American market for ~1.5 years and in the Japanese market for 2.5 years. So why was it discontinued and considered a failure? Wii U, at its current sales rate, seems to track similar to or worse than Dreamcast.

Why couldn't Sega hold out until 2006? Surely it could have sold around Gamecube's and Xbox's market install base of ~20 million, or in other words 10 million additional units in 5 years.

 

[Zombie James]

Retailers started bailing and Sega was running out of money. Simple, really.

 

[Deleted member 47027]

Sony fanboys ruined it and wrote the history books. Dreamcast was the last great console.

ALL HAIL SEGA

 

[Ripclawe]

"Sega intended to launch the console as part of a comeback after its previous efforts with the Sega Saturn. With a strong marketing campaign and reformed studios to develop new creative content, the Dreamcast was initially well received with its launch and sales were positive. However when Sony announced the eagerly awaited PlayStation 2, sales of the Dreamcast plummeted.

The PS2 quickly became very popular upon release and the Dreamcast lost much of its momentum. Sega later came to the realization that it did not have the resources to compete as it was in dire financial straits.

The company discontinued the Dreamcast in North America early in March 2001,[1] withdrawing from the console hardware business altogether and restructuring itself as a third-party developer. Support of the system continued in Europe and Oceania until the end of 2002, while in Japan, consoles were still sold until 2007 and new licensed games continued to be released.[5] 10.6 million units were sold worldwide, as of 2002.[2]

I barely remembered the first part but the second was widely reported

 

[Guess Who]

Selling units doesn't mean making money off of them, that's why.

 

[Hero_of_the_Day]

Hasn't Peter Moore said it was Sega of Japan's call, had it been up to the US branch they wouldn't have called it quits?

 

[televator]

IIRC, they couldn't give them away for free by the end. It was already insanely priced for $50 and you got a $50 rebate for SEGA net or something like that...

 

[IdreamofHIME]

Coz the biggest publisher in the world (EA) refused to put games on it and the PS2 was sucked all the air out the room and left none for the Dreamcast. It had a nice little run in that space between generation cycles, but there was no way it could survive against PS2 and SEGA had thrown too much money at the machine already to keep it on life support.

Why is the WiiU still going? Coz Nintendo are better at planning. You don't see them making a $100 million RPG trilogy for their console.

 

[JerryThePredator]

There were things called the Sega CD, Sega 32X, Sega Nomad, and Sega Saturn. All were considered failures.

I think you can only fail so many times before you need to call it quits.

 

[BLACK AMERICAN PSYCHO]

I wouldn't call 10.6 million units in ~2 years a failure.

It was released on November 27, 1998 in Japan and September 9, 1999 in North America and was discontinued on March 30, 2001 (before the Xbox and Gamecube even entered the market). That would mean it was only in the North American market for ~1.5 years and in the Japanese market for 2.5 years. So why was it discontinued and considered a failure? Wii U, at its current sales rate, seems to track similar to or worse than Dreamcast.

Why couldn't Sega hold out until 2006? Surely it could have sold around Gamecube's and Xbox's market install base of ~20 million, or in other words 10 million additional units in 5 years.

Sega ran out of $$$, plus dreamcast was kinda weak in comparison to PS2/GC/XB. Games like splinter cell, prince of persia, need for speed underground, burnout ect. would have looked like ass.

 

[border]

Dreamcast was discontinued because they didn't have the money to support it, and the rampant piracy on the platform made it poison for 3rd parties. EA refused to support it, and so did most influential 3rd parties.

Dreamcast is considered a failure because it was discontinued after less than 2 years.

 

[Ripclawe]

There were things called the Sega CD, Sega 32X, Sega Nomad, and Sega Saturn. All were considered failures.

I think you can only fail so many times before you need to call it quits.

This too. Sega Genesis and then a whole bunch of crap in between put Sega in a hole

 

[tombstone]

Short version: Nintendo, Sony, and Microsoft were (and are) sitting on piles of cash that Sega simply didn't have. Sega's precarious financial position at the time required the Dreamcast to be a much bigger success than it was in order for Sega to continue operating in the manner it was accustomed to. When it became clear that the Dreamcast wasn't going to break out in the manner Sega needed, and with the PS2 launch destroying any kind of traction that might have been accumulating, Sega decided to cut bait.

 

[Xbudz]

Sega CD and 32X + Stubborn Sega of Japan.

Saturn would have fared better if it was the only console to follow up the Genesis.

 

[TheDarkKnight774]

I always thought it was Sega ran out money. In some way the DC having the quick death heightened its popularity. Like an artist dying young or whatever. You didn't have to watch it painfully fade away. Because although it was a huge jump from the PSX/N64 era, I don't think it would have held up well against the GC/PS2/Xbox

 

[Anticitizen One]

kinda dumb that the second Sega went third party we started getting the games that fans were wanting like VF 4, Panzer Dragoon orta, Gunvalkyrie, etc. Had these games been announced and released on Dreamcast they may had a fighting chance

 

[Ocaso]

If Sega had been in better financial shape then who knows? Perhaps they could have ridden that generation through to the end. However, the hype for the PS2 was colossal, with rumors about technological prowess that so rotundly dwarfed the Dreamcast that doing anything BUT holding out seemed irrational, even when early PS2 games displayed no such advantage. It was a PR triumph of the highest order which landed the final blow on a weakened competitor. What's amazing is that the console still had a veritable treasure trove of great games in such a short period of time.

 

[catmincer]

Still wish that Microsoft included Dreamcast compatiblity in the original Xbox like was rumoured.

 

[Aquamarine]

Quoting myself from a couple of months ago:

Ehh, not really.


Sega financials:

--------Sega Genesis introduced
FY 1989: (7.5 billion yen in operating income)
FY 1990: (13.0 billion yen in operating income)
FY 1991: (17.2 billion yen in operating income)
--------Sega CD introduced
FY 1992: (42.0 billion yen in operating income)
FY 1993: 28.017 billion yen in net income (62.540 billion yen in operating income)
FY 1994: 23.223 billion yen in net income (46.595 billion yen in operating income)
---------Sega Saturn introduced
---------Sega 32X introduced
FY 1995: 14.085 billion yen in net income (31.208 billion yen in operating income)
FY 1996: 5.304 billion yen in net income (29.636 billion yen in operating income)
FY 1997: 5.572 billion yen in net income (31.229 billion yen in operating income)
FY 1998: -35.635 billion yen in net LOSS (13.967 billion yen in operating income)
-------- Dreamcast introduced
FY 1999: -42.881 billion yen in net LOSS (2.088 billion yen in operating income)
FY 2000: -42.880 billion yen in net LOSS (-40.354 billion yen in operating LOSS)
FY 2001: -51.370 billion yen in net LOSS (-52.019 billion yen in operating LOSS)
-------- Sega ends production of Dreamcast and exits the console industry
FY 2002: -17.829 billion yen in net LOSS (14.201 billion yen in operating income)


As you can see here, it wasn't the Sega Saturn or the Sega CD or the 32X that caused Sega to be buried in debt...the Dreamcast's massive failure essentially wiped away all profit that Sega had with the previous systems and put their future as a company in grave peril.

^ Basically, the Dreamcast ran Sega into ruin, so they needed to discontinue it to stave off bankruptcy.

 

[Mysterious]

Hasn't Peter Moore said it was Sega of Japan's call, had it been up to the US branch they wouldn't have called it quits?

From Wikipedia:

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. So on 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. Somehow I got to make that call, not the Japanese. I had to fire a lot of people; it was not a pleasant day.

 

[BigJonsson]

Piracy
PS2

 

[IrishNinja]

man i really wanna play Segagaga one day

Hasn't Peter Moore said it was Sega of Japan's call, had it been up to the US branch they wouldn't have called it quits?

i wanna say i saw an interview say something similar? cant recall

Sega CD and 32X + Stubborn Sega of Japan.

Saturn would have fared better if it was the only console to follow up the Genesis.

also, if it was at all made to capitalize on the huge western base the genesis built, didn't go against Suzuki's advice on simplified hardware & burn retailers to rush in an overpriced system with several half-baked games...dont get me wrong, i love the Saturn but an awful lot coudl've been handled better & managed to keep more of the momentum they'd built.

 

[Carnby]

PS2 having a DVD drive had a huge part in Dreamcast's downfall.

 

[Grinchy]

DC wasn't really that great. People look back on it fondly but at the time it was quite the let down, despite being Sega's best system since the Genesis.

 

[3N16MA]

Picked one up for $50 on clearance.

 

[border]

The Xbox was probably the final nail in the coffin for Dreamcast. Sega probably thought they could compete against one company with deep pockets (Sony), but two competitors with deep pockets was too much. The industry at the time probably could not have supported four different consoles, and it probably still can't today.

IIRC, Sega discontinued the Dreamcast about 3 weeks after the Xbox was announced at CES.

 

[Mysterious]

Coz the biggest publisher in the world (EA) refused to put games on it and the PS2 was sucked all the air out the room and left none for the Dreamcast. It had a nice little run in that space between generation cycles, but there was no way it could survive against PS2 and SEGA had thrown too much money at the machine already to keep it on life support.

Why is the WiiU still going? Coz Nintendo are better at planning. You don't see them making a $100 million RPG trilogy for their console.

Reminds me of something recent...

 

[tsumineko]

From Wikipedia:

PETER MOORE KILLED THE DREAMCAST??

Oh man...

 

[Eusis]

DC wasn't really that great. People look back on it fondly but at the time it was quite the let down, despite being Sega's best system since the Genesis.

Huh? I remember having great times with it, I know the Japanese launch was poor but that one year of serious life in the US was pretty good.

 

[NIGHT-]

I'm so glad I was able to pick up one a few year ago when Amazon started selling brand new ones again

 

[uncledonnie]

I still consider this the biggest tragedy in the history of gaming. Sega was on such an unbelievable creative roll with the DC and we haven't seen anything like that from a publisher before or since.

 

[Aquamarine]

I still consider this the biggest tragedy in the history of gaming. Sega was on such an unbelievable creative roll with the DC and we haven't seen anything like that from a publisher before or since.

Agreed.

It's a real shame that Sega was at their creative peak at the same time that their exorbitant losses were putting the company out of business.

 

[MrCookiepants]

PS2 killed it and Gamecube and Xbox would have killed it even harder had it stuck around. SEGA simply couldn't compete.

 

[Jaded Alyx]

Hasn't Peter Moore said it was Sega of Japan's call, had it been up to the US branch they wouldn't have called it quits?

........I recall him saying the exact opposite.

 

[Barkley's Justice]

No EA = dead man walking at the time

 

[Coreda]

The best article I've ever read on why the Dreamcast failed. Goes into depth about it's history, worth a full read at least once.

 

[catmincer]

No EA = dead man walking at the time

I think it still is now

 

[JordanN]

Reminds me of something recent...

U got to be kidding...

 

[Aquamarine]

U got to be kidding...

Luckily for Nintendo, the Wii U got one wave of EA support.

The Dreamcast never had that liberty.

 

[IrishNinja]

DC wasn't really that great. People look back on it fondly but at the time it was quite the let down, despite being Sega's best system since the Genesis.

The best article I've ever read on why the Dreamcast failed. Goes into depth about it's history, worth a full read at least once.

reading later, thanks man!

 

[Platy]

Quoting myself from a couple of months ago:

FY 2001: -51.370 billion yen in net LOSS (-52.019 billion yen in operating LOSS)

^ Basically, the Dreamcast ran Sega into ruin, so they needed to discontinue it to stave off bankruptcy.

That is ... 500 million dollars of LOSS ???

FUCK

Reminds me of something recent...

Except that Sega didn't had any handheld that sold like water in the desert to cover Dreamcast's loss

 

[Gen X]

I was always under the impression it was poor software to console ratio. The DC had a very high percentage of quality games but piracy was rampant when pirates learnt to compress the sound in order to fit 1gb Roms on 660mb CDs.

DC wasn't really that great. People look back on it fondly but at the time it was quite the let down, despite being Sega's best system since the Genesis.

Shut your filthy whore mouth!

 

[3N16MA]

No need for Madden when you have NFL 2K1.

 

[WolvenOne]

Sega just ran out of resources, plain and simple.

Also, people should take this as a history lesson. Unless a console maker has a diverse business model, that makes money in numerous endeavors, they cannot go from being a console maker to a third party publisher, without going broke in the process.

Microsoft, for example, could bomb in the console field a couple times, exit, and more or less be fine. They make their money from so many different areas, that losing one wouldn't be crippling.

Sega, had console games and arcades, the later of which was starting to decline as well.

So after they were forced out, they were desperate enough for money that they totally went to crap for awhile.

Nintendo would be in the same situation, though they might be marginally better off, since at least they'd have handhelds. Still, they'd be in terrible financial straits if they got out of the console business, and would probably be willing to cash in every obscure property they had, quick and cheaply.

Sega, thankfully seems to be starting to come out of it, slowly. I hope Nintendo never has to go through it. I'd sooner see them bought out by Apple or Sony, than take the same road Sega took.

 

[AniHawk]

The Xbox was probably the final nail in the coffin for Dreamcast. Sega probably thought they could compete against one company with deep pockets (Sony), but two competitors with deep pockets was too much. The industry at the time probably could not have supported four different consoles, and it probably still can't today.

IIRC, Sega discontinued the Dreamcast about 3 weeks after the Xbox was announced at CES.

rumor has it microsoft was simply trying to buy their way into the market with the xbox. they tried nintendo, bungie, sega, and rare. they were mostly successful. only nintendo didn't budge. sega was supposedly in deep talks with microsoft for a while, but backed out last minute. however as part of doing so, they still had to make a certain amount of exclusive games for the xbox, none of which microsoft backed with advertisements and none of which sold. their failure to really find an audience after going third party was partially aided by whatever went down with microsoft.

 

[JordanN]

DC wasn't really that great. People look back on it fondly but at the time it was quite the let down, despite being Sega's best system since the Genesis.

It's hard to find fault in the system.

There was Soul Calibur, Sonic Adventure 2, Power Stone, Skies of Arcadia, Jet Set Radio, Marvel Vs Capcom 2, Ready 2 Rumble Boxing, Crazy Taxi, Dead or Alive 2 etc.

Don't forget the graphics were mind blowing for their time and it kickstarted online gaming.

 

[Platy]

Nintendo would be in the same situation, though they might be marginally better off, since at least they'd have handhelds. Still, they'd be in terrible financial straits if they got out of the console business, and would probably be willing to cash in every obscure property they had, quick and cheaply.

 

[vazel]

Quoting myself from a couple of months ago:



^ Basically, the Dreamcast ran Sega into ruin, so they needed to discontinue it to stave off bankruptcy.

That analysis seems too simplistic. The arcade market dying probably contributed to those losses.

 

[captainraincoat]

In aus it wasnt the ps2 that killed the dreamcast here the dreamcast marketing was non existant and the console was hideously overpriced like all aus sega software and games.....it died here because nobody knew it existed

Hell even the saturn got a few tv adds before
It died

Best hardware and games library does not always equal victory

 

[Darryl]

sega didn't have that microsoft money to lose money for a market share, nor did they have nintendo software which could still remain profitable despite a low console installation base. sega had games, sure, but they weren't games that people were attached to. sega had sonic and that was it. they had a bunch of other games that i doubt were meeting development costs and probably helped sink the ship even faster.