20th Century Gamer

In 1998, speculation about Sega’s upcoming game console was rampant. There was a lot of excitement about this unseen new product, code-named Katana. Most agreed that Katana would have advanced 3D graphics, networking, and DVD. Basically, everything but the kitchen sink was on the feature list and fair topic for discussion. By summer, Sega announced their new console as the Dreamcast, and the specs were impressive. Other than not having DVD capabilities, the Dreamcast was remarkably close to the fantasies and rumors that had been floating around for months.

The Dreamcast was released to Japanese gamers in November 1998. Screenshots and descriptions of Japanese Dreamcast games trickled across the globe, teasing US gamers who wouldn’t be able to buy the console until its September 1999 US launch. But it was more than the speculation and hype that got people excited — many gamers, and not just Sega fans, hoped that the Dreamcast would make Sega relevant again. An editorial on page 175 of the January 1999 EGM captured the anticipation felt by many. “Sonic will become a household name again, and everyone will wonder how we ever went so long without Sega in our lives.”

In early 1999, Sega started a $100 million dollar marketing campaign. The catch phrase “It’s thinking,” was accompanied with “9.9.99,” in magazine spreads, TV spots, and event booths to make sure that everyone with a pulse knew about the Dreamcast and when it was arriving. Sega was everywhere. As the launch day approached, a few customers may have been burned out from overexposure — but the marketing blitz was effective enough that there were 300,000 Dreamcast pre-orders, setting a record for the time.

September 9, 1999 was on a Thursday, yet the local Funcoland was filled with kids who had skipped school. My attempt to try out the new console was in vain, because with the crowd it was impossible to get within 15 feet of the Dreamcast kiosk. I was among those who hadn’t pre-orded a Dreamcast and was out of luck on launch day, but within a few weeks shipments caught up and consoles were re-available. The 24 launch titles had gamers talking for months, with several of the games selling out weekly. For many that didn’t already have one, a Dreamcast was on the top of their wishlist for the 1999 holiday season.

Sega was challenging Sony’s majority market share, just as they had challenged Nintendo a decade earlier with the Genesis. The Sega known and loved from the Genesis days was back, along with their “in your face” attitude that pushed the industry to new heights through competition. The Sega magic had returned, albeit briefly.

Before Dreamcast, years of missteps followed by the failure of the Saturn had left Sega with over $267 million in debt. Sega needed to sell 3 million Dreamcasts to break even, and between 4-5 million for the system to establish a sustainable consumer base and become profitable. Even with the successful launch, at the end of the year (and including holiday sales) only a little over a million consoles had been sold.

Months before the Dreamcast launch, Sony announced the final specs for the PlayStation 2. Sony’s PS2 graphics demos were shinier than anything seen on the Dreamcast. The PS2 was backwards compatible with the first PlayStation, it included a DVD player, and it would be sold for $299. At a time when the cheapest stand-alone DVD players were still $400 or more, for most consumers the allure of the $299 DVD-playing-PS2 trumped the $199 Dreamcast. Even without a finished product to show, Sony had convinced many to forgo buying a Dreamcast and hold out for a PS2.

In May 2000, Sony released the PlayStation 2 in Japan. Even with superior technology, the PS2 launch games were generally inferior to their Dreamcast counterparts and massively disappointing when compared to the Sony graphics demonstrations from the previous year. Logically, real-world comparisons between the two systems should have boosted Dreamcast sales — however, Japanese Dreamcast sales almost ceased completely as people bought the PS2 for its DVD features.

The Dreamcast launch had been deceptively impressive. Unfortunately, that first million Dreamcast owners appeared to be early adopters who weren’t enthusiastically followed by the general gaming public. By July 2000, things weren’t looking good for Sega. Dreamcast was dead in Japan, less than 500,000 had been sold in the US that year, and Sega’s losses had increased to $1.12 billion. Over the next six months Sega tried almost everything to sell Dreamcasts, including aggressive price drops and rebates. Just as in Japan several months before, the November US release of the PS2 slowed Dreamcast sales even further. Even a holiday shortage of PS2s didn’t increase Dreamcast sales. The promise of the PS2’s DVD player proved to be too much competition.

In January 2001, less than 2 years after its US release, Sega announced the Dreamcast was no longer in production. Sega left the consumer hardware business and came full circle to where the company had been in the early 1980s – an arcade machine company and a third-pary game developer.

While it lasted, the Dreamcast was something special. In a strange way, it was like a summer romance. The summer ended, someone new came to town, and our crush was soon forgotten. The Dreamcast is remembered as much for as what could have been, for the anticipation and excitement the system created, as for what it actually was.