Dreamcast - Retro Gamer

Year Released: 1998
Original Price: £200
Buy It Now For: £25+
Associated magazines: DC-UK, Official Dreamcast Magazine
Why The Dreamcast Was Great: Sega’s 128-bit console promised arcade-perfect gaming and the ability to go online for under £200. A flood of Sega classics followed and although Sony’s PS2 was technically superior it took a while for it to catch up in terms of quality games.

Sega’s Dreamcast holds a special place in the history of home videogame entertainment. It was an innovative beast, being the first 128-bit home console to offer online connectivity out of the box and setting the modern trend for sourcing internal components from PC manufacturers. It also proved to be Sega’s last entry in the notoriously difficult hardware development race and brought an end to the days when arcade conversions sold consoles. Released in 1998 the ill-fated machine would be culled just three years later by a Sega undergoing seismic internal restructuring that would ultimately see the company emerge as one of the world’s leading third-party software publishers.

The Dreamcast enjoyed a somewhat convoluted genesis. Back in the late-Nineties, Sega was still smarting from dismal hardware disasters such as the Mega-CD and 32X, and its Saturn console was losing the 32-bit war against Sony’s PlayStation. As is usually the case when companies are against the wall, cracks began to appear inside Sega’s corporate architecture. Newly appointed Sega of Japan president Shoichiro Irimajiri decided that the company’s internal hardware development division was firing blanks and was determined to look elsewhere for the talent to create a new machine. This was not an entirely new stance; as early as 1995 there were rumours that the Japanese company would team up with aerospace firm Lockheed Martin to develop a new graphics processing unit (GPU), and while this proposed union came to nothing it set the wheels in motion for further excursions abroad in search of new hardware partners.

Around 1997 Irimajiri decided to enlist the services of Tatsuo Yamamoto from IBM Austin to work on a new hardware project. The idea was that the team would operate externally and therefore be unhampered by the internal politics that were pervading Sega’s Japanese HQ at the time. Unsurprisingly, when Hideki Sato – head of hardware development at Sega Japan – caught wind of this he was less than happy and made it clear that any technical production should happen within the walls of Sega’s Japanese HQ. This resulted in two different teams working in secrecy on two different prototypes in two different parts of the world.

‘Black Belt’ was the original codename given to the machine being constructed in the US, which was based around 3dfx Interactive’s Voodoo 2 graphics technology. The Japanese counterpart was initially known as ‘White Belt’ (later ‘Katana’) and made use of NEC/VideoLogic’s PowerVR2 chip. Both machines utilised ‘off the shelf’ central processors, with the American team picking the IBM/Motorola PowerPC 603e and their Japanese competitors favouring Hitachi’s SH4. Ironically, despite Irimajiri’s bold move of outsourcing development, it was Sato’s team that ultimately won in the end with the ‘Katana’ prototype being selected as the basis for the new machine (naturally, rumours abound that Irimajiri’s move was merely a bluff in order to give the Japanese hardware division a much-needed kick up the backside).

A disgruntled 3dfx promptly sued for breach of contract, claiming that documents had been signed that stated that Sega would use its technology in the proposed ‘Black Belt’ concept for the new console (the first version of Metropolis Street Racer started development for the ‘Black Belt’ and Bizarre Creations even had a prototype of this hardware). The two projects, which had been kept top secret up until this point, were made known to the world thanks to 3dfx’s lawsuit against both Sega and PowerVR2 manufacturer NEC. The former was reportedly furious about having its dirty washing aired so publicly and the legal impasse would later have to be settled out of court for an undisclosed sum. Needless to say, it marked an inauspicious start for the life of the new super console.

With the technology decided upon, the next step was to give the new project a name. With Sega’s stock pitifully low, the company was well aware that any new machine would have to represent a new beginning and distance itself from the tainted public perception created by the poorly performing Saturn. To the Sega management, this meant one thing – completely remove the Sega name from the console and establish a new gaming ‘brand’ in the same way Sony had done with the successful PlayStation. According to reports, over 5,000 different names were considered, with the positive-sounding ‘Dreamcast’ winning out. A combination of ‘dream’ and ‘cast’ – as in the way a magician would cast a spell – this pleasant moniker hinted at the expanded connectivity the system would eventually bring to the home via its online services. Thankfully for fanboys, Irimajiri’s management team would later wisely relent and permit the Sega logo to be reinstated to the console’s outer casing.

Internally the new system was a marvel of cost cutting, ‘off the shelf’ componentry – Sega had certainly learnt valuable lessons from the failure of the Saturn. The Dreamcast’s 32-bit predecessor was badly hampered by high production costs and the complex nature of the hardware made it difficult for programmers to get the most out of the system. With Dreamcast, Sega made sure the console was cheap to manufacture by using parts more commonly associated with PCs. The motherboard was a masterpiece of clean, uncluttered design and compatibility, with Microsoft’s Windows CE operating system meaning that development would be a potentially pain-free exercise (although it should be noted that in the long term, programmers favoured Sega’s own development tools over Microsoft’s). In order to keep costs down, the decision was made not to include a DVD drive, as the technology was still quite expensive at the time. Instead, Sega used its own proprietary GD-ROM format, which could store a gigabyte of data. Not including DVD compatibility would later prove to be a costly mistake.

If proof is needed to ascertain how serious Sega was about the new machine, one only has to look at the amount of money involved in designing, creating and marketing the console. Around $500 million was earmarked for the Dreamcast worldwide, with roughly half of that figure being spent on creating the hardware and software. The rest was splashed on promoting the machine all over the globe. Irimajiri, who found fame and fortune in the automotive industry with Honda, jokingly commented a few months before the Japanese release that the figures baffled him – car manufacturers would spend roughly the same amount on creating a new automobile, yet here was Sega throwing millions at the production of a diminutive box that sits under your TV.

Nevertheless, Sega’s Japanese president was well aware that this was the amount of capital it took to get a new machine on the shelves and into the consciousness of the consumer. The company knew that it would take something special to regain market share from the dominant Sony. “We have the strength of a beaten company,” Sega’s PR guru Yasushi Akimoto commented at the time. But for all this bravado, the new hardware launch was undoubtedly a huge gamble. The poor performance of the Saturn had pushed Sega into the red, and even before the Dreamcast hit store shelves in Japan the distressed firm had posted a shocking 75 per cent drop in half-year profits. With such a massive amount of money being devoted to doing battle in the console arena once more, the top brass at Sega knew that this could potentially be the last throw of the dice.

Nevertheless, as the console’s Japanese launch grew ever closer there was a tangible sense of confidence in the Sega camp. Consumer interest was high and retailers reported that strong pre-orders were expected. However, this optimism was knocked slightly when NEC made the shock announcement that it was struggling with the manufacture of the PowerVR2 chipset. Issues were being encountered when the company mass produced the chip at the required 0.25 micron thickness (with one-in-three processors failing to meet production standards) and this invariably resulted in Sega having to halt Japanese pre-orders (which had reached around 80,000 by this stage) and reduce the projected number of units available at launch from 500,000 to 150,000. To make matters worse, several key titles such as Sega Rally Championship 2 and Sonic Adventure were also hit by development delays.

The machine was finally launched in Japan on 27 November 1998 and the 150,000 available units promptly sold out before the day was over. In an eerie precedent to the Saturn launch four years earlier, the only title really worth bothering with on day one was Virtua Fighter 3: Team Battle. Unperturbed by the PowerVR2 production fiasco, Sega confidently predicted that it would sell half-a-million units by March 1999. When this target was missed and the news started to filter through that key software titles were failing to sell in the numbers expected (Capcom’s stunning Power Stone was one high-profile commercial disaster, prompting a public apology from the developer, which wrongfully seemed to assume the end product wasn’t up to scratch), those individuals inside the walls of Sega of Japan’s boardroom started to worry. Prior to the Western launch the price of the Japanese console was reduced from ¥29,000 (£150) to ¥19,900 (£100), effectively removing all profit from hardware sales. The reduction had the desired effect and units started to sell in larger numbers, although this could have had something to do with the release of Namco’s superlative Soul Calibur, which when confirmed as coming to Sega’s 128-bit console caused a 17 per cent jump in the value of Sega’s shares.

As the Dreamcast was struggling to maintain pace in its homeland, Sega’s American and European divisions prepared to launch the console in their respective territories. The North American release occurred on 9 September 1999, with the European debut taking place just over a month later. The US launch was an astonishing success with Sega struggling to meet the initial demand for the product.

Half-a-million Dreamcast consoles found their way into US homes in the first two weeks alone – something the machine had failed to do in several months in Japan. The company proudly boasted that it made $98 million on software and hardware sales thanks to the 9 September launch; by anyone’s standards it was an amazingly successful introduction and ranks as Sega’s most successful hardware launch in the territory. In Europe the figures made for equally encouraging reading; by Christmas 1999 half-a-million units had been sold meaning that Sega Europe was six months ahead of the schedule it had set itself. Sega’s good fortunes weren’t going to last though…