On September 9, 1999, Sega launched the Dreamcast in North America — it’s last, best hope for relevance in the console market. The console, which was intended to put Sega on a more even footing against competitors like Sony, wound up being the company’s hardware swan song. Sega never launched another console — the company’s Genesis Mini, which releases on September 19, is the first Sega-branded hardware to ship in 20 years (not counting the products Tectoy produces in the Brazilian market).
The Dreamcast is a rare example of a platform that failed despite having relatively few weaknesses or flaws relative to other consoles at the time. The N64 wasn’t as popular as Nintendo hoped because the cartridges of the day had limited storage capacity and therefore limited space for detailed textures. Despite these limits, they were also quite expensive compared with CD-based media. The previous Sega console, the Sega Saturn, was difficult to program and had been rushed out the door in an attempt to beat Sony’s PlayStation to market. The original Xbox One was less powerful than the PlayStation 4
The Dreamcast, in contrast, was a solid piece of kit. It used a 32-bit two-way superscalar RISC CPU designed by Hitachi, the SH-4, rated for 360 MIPS and clocked at 200MHz. The CPU offered an 8KB instruction cache and 16KB data cache and interfaced with a GPU designed by NEC, the PowerVR2. While reportedly not as powerful as the 3dfx hardware that Sega had originally planned to use for the Dreamcast, the PowerVR solution was an affordable option and an effective one. The Dreamcast was designed to use off-the-shelf components to make it an easier target for developers, but the platform was ahead of its time in several respects.
The Dreamcast controller, with Video Memory Unit (VMU)
The Dreamcast shipped with a modem at a time when 80 percent of the US population was still using dial-up to get online. It used a GD-ROM format that could hold up to 1GB of data — not as large as DVDs, but more capacity than a typical CD-ROM offered. It offered a memory card that doubled as a miniature gaming device, the Visual Memory Unit. Sega’s overall goal with the Dreamcast was to build excitement around its products in the months before the PlayStation 2 would debut, to give it a leg up on the next-generation competition.
From the beginning, however, the console faced an uphill battle. Retailers who had been burned by short-lived Sega products like the Sega CD or 32X (not to mention the Sega Saturn) were unhappy with the company. Sega had initially intended to use hardware from 3Dfx, but when 3Dfx filed for its own IPO it revealed the Dreamcast before Sega had been prepared to make the announcement. Meanwhile, EA decided not to support the Dreamcast, despite having been a major partner on previous Saturn systems. According to a retrospective on the console, this decision was driven by a host of factors, including the specific component choices Sega made, the company’s indecision over whether to make a modem standard on the entire console range, and Sega’s hardball tactics during licensing may have killed EA’s interest in the platform. A different source in the same article, however, claims that EA walked away from Dreamcast because Sega wouldn’t give it a guaranteed exclusive on all sports’ titles for the console, given that Sega had just purchased a development studio, Visual Concepts, to build these titles.
Sony’s PS2 Marketing Blitz
The other factor that has to be factored into the Dreamcast’s demise is the absolute torrent of marketing Sony unleashed. In September 1999, all eyes were on Sony’s PlayStation 2, still over a year away. In theory, this should have opened a window for the Dreamcast to establish itself. In practice, that didn’t happen. Sony put an all-out marketing blitz behind the PlayStation 2, with its “Emotion Engine.” Sony’s reputation, by this point, was also better. The company had shipped one massive hit, the original PlayStation. Sega, in contrast, had shipped a number of half-baked, expensive flops. The Sega Saturn debacle was only part of the problem. The Sega CD and Sega 32X — both Genesis / Mega Drive add-ons — had failed to impress the market. Handheld products like the Sega Nomad had flopped.
If you were on the fence between Sega and Sony in the late 1990s, Sony looked like the safer bet. Sega’s Dreamcast enjoyed a very strong North American launch, but sales dropped off as the PS2’s launch date approached. Sony had the deep pockets to dramatically outspend Sega in terms of marketing dollars, while Sega was losing money despite brisk hardware sales. It cut Dreamcast prices to boost demand, but that meant taking a loss on the platform. While the attach rate for games was reportedly high, the install base wasn’t large enough for the company to achieve profitability this way. By the time the PS2 actually launched, Sega was hemorrhaging cash. Unable to compete with the PS2, Sega threw in the towel on hardware manufacturing altogether.
Image credit: TheDreamcastJunkyard, which has additional screenshots of comparisons between PS2 and Dreamcast visuals in Ferrari F355 Challenge, for the curious.
Compare Dreamcast and PlayStation 2 games today, and it’s clear that the gap between them wasn’t as large as Sony wanted it to seem. Sega Retro notes:
Compared to the rival PlayStation 2, the Dreamcast is more effective at textures, anti-aliasing, and image quality, while the PS2 is more effective at polygon geometry, physics, particles, and lighting. The PS2 has a more powerful CPU geometry engine, higher translucent fillrate, and more main RAM (32 MB, compared to Dreamcast’s 16 MB), while the DC has more VRAM (8 MB, compared to PS2’s 4 MB), higher opaque fillrate, and more GPU hardware features, with CLX2 capabilities like tiled rendering, super-sample anti-aliasing, Dot3 normal mapping, order-independent transparency, and texture compression, which the PS2’s GPU lacks.
Today, the Dreamcast is remembered for the uniqueness of its game library. In addition to absolutely stunning arcade ports like Soul Calibur, the Dreamcast had Phantasy Star Online, which was the first online console MMORPG. Games like Shenmue are considered to be progenitors of the open-world approach favored by long-running series like Grand Theft Auto (which itself began life as a top-down game, not a 3D, open-world, third-person title). Games like the cel-shaded Jet Set Radio and Crazy Taxi established the Dreamcast at a platform willing to take chances with game design. Titles like Skies of Arcadia offered players the chance to be sky pirates. Games like Seaman were… really weird.
Really, really weird.
Sometimes, the issues that sink a console are technical. Sometimes, the hardware is fine and it’s everything else that goes wrong. Here’s to one of the short-lived champions of a bygone age — and a more daring era in gaming, when developers and AAA publishers took more chances with quirky titles than they do today.
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