[Pac-man sounds] Throughout history, empires have come and gone. The Mongols. The Romans. The Franks. They were all once-great empires of the known world. Even in the video game world, once-great companies eventually fall. Look at Atari. The once-powerful company that brought gaming into households, now publishes "Dragon Ball Z" fighting games. One company that will never be the same is Sega. What was once the number one rival to Nintendo's hardware machine, now makes software for various companies, including Nintendo. Sega's final days were with the Dreamcast, the first 128-bit home console and the first home console to come with a modem out of the box. Although the Dreamcast is essentially dead, it is still considered one of the greatest gaming systems ever put out by Sega. This is our two-part episode on the history of the Dreamcast. Its rise to greatness and its eventual downfall. The Dreamcast on "The Gaming Historian." Well, it's finally happened. I've been accused of being a Nintendo fanboy. Now the truth is, the last three of my four videos have been primarily Nintendo-based, but come on, guys. Well, it doesn't help that I have this "World of Nintendo" sign hanging right here. But, I like Nintendo, but the truth is, my first 16-bit system was a Sega Genesis. And, look, I even have this "Sonic The Hedgehog" cartoon on VHS. I love this stuff. Yeah, anyways. Thanks to you guys sending in all these requests, I've got a ton of non-Nintendo-related stuff I can look at. So, today we're going to look at something Sega-related. "Justin" wanted to know more about the Dreamcast and why it failed in the United States. Well, it's a long story. And this'll be a two-part episode, so... let's get started! Our story begins with the Sega Saturn. After Sega's repeated attempts to keep the Sega Genesis alive with the Sega CD and the Sega 32X add-ons, they finally decided to release an actual new 32-bit console. It was supposed to be launched in September of 1995, but Sega wanted to jump ahead of the new Sony PlayStation. So they pushed the release date forward to May 11, 1995. This move irritated many developers for games of the Saturn who suddenly did not have time to take advantage of the Saturn launch day. Despite this, Sega launched their new console May 11, 1995, about four months before the release of the Sony PlayStation. However, Sega was about to get a rude awakening. Let me explain this pretty clearly. The Sony PlayStation launched September 9, 1995. That gave the Sega Saturn a four month lead in the console race. They had sold 80,000 units by then. On the first day alone, however, Sony PlayStation sold 100,000 units. Now, talk about an epic fail on Sega. And to make matters worse, the Nintendo 64 launched September 29, 1996, and they had sold 400,000 units in just four months. Suddenly, the Sega Saturn was in third place and dying quickly. By 1997, Sega controlled only 12 percent of the console market. It was obvious that this once-prominent company was slipping away. Sega realized their situation and decided on their last-ditch effort, a brand new 128-bit system. Code-named "Katana" in development, Sega officially announced the Dreamcast on May 21, 1998. It would include a 56K modem for online play, stereo sound, and a 3D graphics chip made by NEC. The games were made on GD-ROMs, which were double-density CDs that could hold over 1GB of data. The Dreamcast launched on November 27, 1998, in Japan. The launch seemed successful, but due to a shortage of graphics chips from NEC, Sega felt it went horribly wrong. Sega shipped about 450,000 systems in the first few weeks, but felt 200,000 to 300,000 additional units could have been sold, "if we could have had enough supply." Then came the worst news Sega could possibly imagine. On March 2, 1999, Sony officially announced the PlayStation 2 in Tokyo, Japan. The PlayStation 2 was expected to launch in the next year and would have amazing capabilities. It could render 60 million polygons per second, compared to the Dreamcast's 3 million. Games could be made on DVDs which could hold about 8.5GB of data on a dual-layer disc. The Dreamcast could only hold about 1.2GB. The PS2 would also support broadband Internet while the Dreamcast would have to wait for a broadband adapter to be made. The final nail in the coffin and probably the number one reason why Sega was so nervous was the ability for the PS2 to play DVD movies. Even before the Sega Dreamcast launched in the United States, the system was obsolete. And with the PlayStation 2 slated to arrive in the next year, Sega's plan was this: install a huge fanbase and provide a lot of great software before the PlayStation 2 hit store shelves. Sega's Bernard Stolar responsed to the PS2 with: Due to internal conflict, Sega ousted Stolar and replaced him with Peter Moore. Yes. Peter Moore. Many know Peter Moore today as the President of EA Sports and as the former Vice-President of Microsoft's Interactive Entertainment Business division. Little did you know, Peter Moore began his work for Microsoft based on his experience with the Dreamcast. The Dreamcast was hyped up with ads stating the launch date: 9/9/99 for $199. The North American launch was a huge success for Sega. Retailers were demanding the console after selling out. Sega sold over 500,000 units in just two weeks. Much of the success can be credited towards the great launch titles and online connectivity right out of the box. Titles such as "Soulcalibur," "Sega Sports' NFL 2K," "Ready 2 Rumble Boxing" and, of course, "Sonic Adventure." In total, there were sixteen launch titles with the Sega Dreamcast. By the end of 1999, Sega had sold 1.2 million units. However, the PlayStation 2 was still looming over them like a rain cloud to ruin their day. Let's go ahead and take a look at the Sega Dreamcast. The system itself is quite small with two simple buttons on the top. Power, which turns the system on and Open, which opens up the CD drive. The front of the Dreamcast has four controller ports. This is pretty awesome. Now back then, wireless controllers were not the norm like they are today. If a console had four controller ports, there was no need to buy any extra adapters to play certain multiplayer games. The back of the Dreamcast has a serial port, an audio/video port, a line-in for online connectivity, and an AC-in plug. This may not seem like a big deal, but this power plug is really nice. Why? Because it's not proprietary. You see, some consoles have power adapters that require certain voltage or a certain plug. If for some reason you lost or broke your power cord for the Dreamcast, finding a replacement would be extremely easy. The controller is also pretty cool. It has two trigger buttons on the back, a D-pad, an analog stick, and four buttons on the right. It has a Start button in the center, but lacks a Select button. The memory card for the Dreamcast had a small LCD screen and even a D-pad with A and B buttons. This is because some games offered mini-games that could be put on the memory card. It was plugged into the controller and during gameplay, custom animations from the game would be displayed on the screen. You could also connect two cards together through the ports on the top and exchange game data. Several other peripherals such as the fishing rod, the keyboard and mouse, and a microphone were also released. This really is an amazing little system. But now, it's time to find out what went wrong with the Sega Dreamcast. The launch of the PlayStation 2 on March 4, 2000, was a huge success for Sony. On launch day in Japan, 600,000 PlayStation 2's were sold. Since there only one million Dreamcasts sold in Japan, and about two million sold in the United States, Sega concentrated their efforts in the U.S. market. Peter Moore stated, Sega also split up their in-house development. Rather than keep top designers such as Yuji Naka, who programmed "Sonic The Hedgehog," and Yu Suzuki, creator "Shenmue" under Sega's roof, they split them up into independent developers for the Dreamcast. This was actually a smart move, as these new independent developers could experiment and vastly expand the Dreamcast's library. However, the power of the PlayStation 2 was obvious. Many developers of Dreamcast games hoped to see their creations on the PlayStation 2 one day. On March 10, 2000, Microsoft announced the Xbox. Microsoft noticed the PlayStation 2 taking over living rooms and having the ability to do more than just play games. Their new console was being made to compete against the PlayStation 2. Sega was now on a clock. Either they build up their user base now or fall. Sega of America soon announced SegaNet, For $21.95 a month, you could take advantage of Sega's Internet service. Which would allow for fast online gameplay, web browsing and more. If you signed up for a two-year subscription, you would receive a Dreamcast and a keyboard for free. However, things were not looking good. Many executives at Sega were openly advocating ending the Sega hardware business. The PlayStation 2 was on its way and the Gamecube was announced. However, there was a small gleam of hope for Sega in September of 2000. Due to part shortages in Japan, Sony could not ship as many consoles to the U.S. as it had hoped. Not only that, but the launch titles for the PlayStation 2 were not impressive. It also cost twice as much as the Dreamcast. Dreamcast sales surged during the 2000 holidays, but it was shortlived. On January 24, Sega announced that they would discontinue the Dreamcast. They had plenty of inventory stocked up, and with bad sales, there was no need to produce any more consoles. Sega officially announced they were pulling out of the hardware business and now making games for multiple platforms. Many new games were still being released for the Dreamcast and even some accessories, such as a broadband adapter that replaced the 56K dial-up connection. But basically, the system was ending and consumers were losing interest. It took Sega 22 months to sell 6.5 million Dreamcasts. It took Sony only 15 months to sell 10 million PlayStation 2's. So here's the ultimate question: What happened? Here are a few reasons why the Dreamcast failed. Number 1: The PlayStation 2. It was simply much more powerful than the Dreamcast and the inclusion of a DVD drive really hurt. Believe it or not, DVDs were not very popular in Japan before the PlayStation 2. After the PS2's release, the DVD market exploded. The Xbox and Gamecube announcements were like a nail in the coffin for Sega. Number 2: The Dreamcast lacked third-party support. Most of the Dreamcast's games were made by Sega. and some third-party developers, such as EA Sports, refused to make games on the Dreamcast after the Saturn's failures. Number 3: Game piracy. During the release of the Dreamcast, another new technology was gaining popularity on PCs: the CD burner. Hacker groups online soon began ripping the images off of the GD-ROMs via the serial port or the broadband adapter and creating images that could be put on a CD-R. Because the Dreamcast requires no hardware modifications to read CD-R discs, pirated Dreamcast games were extremely popular. As of now, 10.6 million Dreamcasts have been sold. So, why do people love the Dreamcast? Maybe it's because it felt like a real gaming system. After Sega's previous flops, the Dreamcast was a breath of fresh air and a reminder that Sega could still make an awesome system. Even today, independent developers make games for the Dreamcast. The Dreamcast is just a great console and an amazing finale for the company. Sega, you will never be forgotten. Your name will forever be immortalized in history. See you next time on "The Gaming Historian."
