The Sega Dreamcast released on 09 September 1999 (9.9.99), and was an instant smash success. It released for $199.99, which was an absolute STEAL for a video game console at the time.
Every September 09, however, every video game website has an article about the wonderful legacy of the Dreamcast. So I need to do something different.
So let’s talk about why this little white box with a spiral logo did and didn’t succeed.
In January of 1989, Sega released the 16-bit Genesis console, known as the Mega Drive outside of North America (since I live in the USA, I’ll be referring to it as the Genesis). It took a little while for the Genesis to pick up steam in the North American market, as the Nintendo Entertainment System was still the dominant gaming console in the region. But by later in 1990 and definitely after the 1991 release of Sonic the Hedgehog, Sega’s marketshare was growing, by catering to the teens who had grown up playing their Atari and Nintendo systems, and now wanted something bigger and better. And, as the marketing slogan went, “Genesis Does What Nintendon’t.”
On September 9, 1991, (hey, that’s today’s date, too!) Nintendo would release the Super Nintendo Entertainment System (SNES) in North America, just a month before Sega would release their Sega CD add-on to the Genesis (called the Mega-CD outside of North America). It’s easy to forget now, but the early 1990s saw HUGE developments in hardware and storage technology. The cartridges that gaming had used since the 1970s were expensive to produce, but by switching over to an optical disc format, the mass production of games could be done much cheaper and easier. Plus, CDs had a higher storage capacity than any chipsets that could be put into cartridges, at the time.
So the Sega CD came out, retailing for $299.99 plus the cost of a Genesis, and it was a modest success. It didn’t sell the number of units that the Genesis did, but it did decently enough for itself. However, because it was an add-on to the Genesis, it wasn’t like a new generation of consoles, it just gave greater storage capacity to game developers, so they could make games with better audio and more frames of animation, but the Sega CD was otherwise still limited by the Genesis’ internal processors. Additionally, after the first year or so of release, there weren’t a TON of Sega CD-exclusive games that enticed gamers to pick one up. So it was okay, but it definitely felt like an afterthought.
And 1991 thru 93 were the heyday of the “console wars” between Nintendo and Sega’s two 16-bit machines. History shows that Nintendo won by selling more Super NES consoles than Sega sold Genesis units, but the fact that Sega was even able to compete with the juggernaut that was late 80s/early 90s Nintendo should never be underplayed.
1994 is where things start to get weird for Sega of America. Rather than focusing on releasing more games, they decided to focus on releasing more hardware. Somebody thought ANOTHER add-on that could turn the Genesis from a 16-bit console into a 32-bit console would be a good idea. So the Sega 32X was developed and released in time for Christmas 1994. But the problem was, by the time the 32X was announced, Sega of Japan had already announced that the Sega Saturn would be launching in Japan in late 1994, and summer/fall 1995 in the US.
So Sega of America said “hey we’re going to release this thing to make your Genesis bigger and badder,” at the same time Sega of JAPAN said “We’re releasing a 32-bit CD-based console that will usher in the next generation of gaming.” See the problem here? The 32X would have been fine if it had come out a year earlier, or if the Saturn was coming
out a year later. But as it was, the thing was dead in the water. A $150 waste of time and money, Sega killed support for the 32X after just 14 months.
Meanwhile, behind the scenes, after the initial success of the Sega CD, Nintendo announced that they would also be developing a CD add-on for the SNES, and it would be created by Sony. Well, after Sony had done all the research and development work and were just about to announce the thing, Nintendo publicly revealed they would instead be partnering with Sony’s electronics rival, Phillips. Sony didn’t know their relationship with Nintendo was killed until the announcement. But Sony is a huge company and wasn’t going to let all that R&D go to waste. A combined SNES/CD console was amongst their plans, which would be called the “Play Station,” so Sony took what they’d learned in this project and announced they would be releasing the 32-bit, CD-based Sony “PlayStation” (no space) in the fall of 1995, around the same time as Sega’s 32-bit, CD-based Saturn.
And then came the Electronics Entertainment Expo (E3) in May of 1995.
Sega had previously announced that the Saturn would ship on “Saturnday,” Saturday 02 September 1995. And then, to get a competitive edge over the upcoming PlayStation, they surprised everybody by shipping Saturn units to big-box retailers such as Toys “R” Us, Babbages, Software Etc., and Electronics Boutique four months ahead of schedule. Consumers didn’t have to wait, and during the E3 Saturn Press conference on 11 May 1995, Sega’s reps said consumers could buy a Saturn “right now” for the price of $399.99.
Later that day, at Sony’s press conference announcing the launch of the Playstation was highlighted by one of the Sony reps simply saying, “$299” and walking off the stage.
Sega had literally fucked themselves. The console was available in SOME stores way ahead of schedule, which upset the OTHER retailers — For example, Kay Bee Toys, the second-biggest national toy retailer at the time, refused to carry Saturn products at all because they weren’t included in the early release. Units were out there, and they were 400 dollars. But Sony had just announced a comparable console for 100 dollars less, AND Sony didn’t have the reputation of the Sega CD add-on and 32X being under-supported. For all we knew, Sega was going to release the Saturn and then just not put out a lot of games.
Just TWO DAYS after the PlayStation’s North American launch on 09 September 1995 (I swear I didn’t know the SNES and PlayStation were also released on September 9th when I sat down to write this), it had outsold the previous FOUR MONTHS of Saturn sales. However, all was not lost. By basically all accounts, the Saturn’s November 1994 release in Japan gave them enough of a head-start over the PlayStation’s Japanese launch that, while the Saturn would eventually lose that war too, it was actually competitive.
Sega of America, meanwhile, kept making very strange decisions, such as a 1997 mandate that no 2D-based games would be released for the Saturn. This meant that some excellent games never saw the light of the day in North America, including Capcom’s X-Men vs. Street Fighter and Konami’s CastleVania: Symphony of the Night, the latter of which ended up being a huge hit on the PlayStation.
Additionally, in 1991, Sega had released the biggest video game mascot character in years, Sonic the Hedgehog. For SOME reason, there was not a Sonic game available for the Saturn at launch, and the games that eventually DID get released were a terrible racing game, a compilation disc with all of the Genesis Sonic games, and an upscaled version of Sonic 3D Blast, which was ALSO released on the Genesis and Sega’s handheld platform, the Game Gear. Why wouldn’t Sega capitalize on their mascot character?
In 1996, the Nintendo 64 was released, and that was basically the end of the Saturn. The “console war” of that generation was the N64 vs the PlayStation, and the Saturn was an afterthought.
So by the time that the 1999 launch of the Dreamcast rolled around, Sega had a lot to get right. And do you know, they DID get correct everything that they could. The Dreamcast was released in white, distancing itself from all of Sega’s previously-black consoles (though black “special edition” versions were eventually released). The console touted four controller ports for multiplayer action. A Sonic game, Sonic Adventure, was available at launch. The Dreamcast was the first gaming console with built-in Internet connectivity features. Sega had lined up some great 3rd-party gaming developer partners to release hit games for the console. And the price of $199.99 was practically a steal!
As far as anybody can tell, they did just about everything right.
So why, then, did Sega kill support for the Dreamcast on 31 March 2001, after just a year and a half?
In short, it was timing. The Playstation 2 released on 26 October 2000 for $299.99, 13 months and change after the Dreamcast, ironically for $100 more. It had a lot of the same features as Sega’s new baby, but it had two BIG things going for it.
First of all, Sega still hadn’t wiped the negative reputations of the Sega CD, 32X, and Saturn away. That hurt them a lot. Sony had a massively positive reputation based on the five successful years of the original PlayStation. But that could be overcome over time. Mostly, it was one simple fact:
The Playstation 2 had a built-in DVD player.
In 2000, DVDs were the new hotness in entertainment. And at the time, a DVD player cost between 100-200 dollars. So if you were going to be buying a new game console and a DVD player, why not just get the two in one unit? And many people did.
So the plug was pulled on the Dreamcast in less than two years. But, 21 years later, it’s still remembered fondly. As I said before, every year on September 9th, all the gaming websites do features extolling the virtues of the Dreamcast.
It was a good little machine that, I believe, deserved better than it got.