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In the beginning it was good. Sega released a solid piece of hardware called the Dreamcast that was easy to develop games for and kicked the competition's rear ends in terms of graphics and sound. It entered the market with a strong start, selling quite well upon its release. Although the Dreamcast lacked 3rd party support, Sega's games were aplenty and the very best in quality. Sega seemed to be heading in the right direction, but two years later the company abruptly discontinued the Dreamcast.
There were 3 main causes to the downfall of the Dreamcast.
1. Piracy Issues
The Dreamcast had a serious hardware flaw which gave it the ability to play copied games and downloaded ones from the internet. Many people chose to play the pirated versions of the games rather than shell out $40-$50 at a local gaming store for the real thing. As a result, Sega was losing money on the games that its
had spent hours designing. I call that a sad waste of talent.
2. Loss of Faith in Sega Brand
Before the Dreamcast, there was the Sega Saturn, an absolute failure. At that time, Sega was releasing new add-ons and consoles so often that nobody wanted to buy the Saturn because they feared Sega would
a new console and cut off game development with the current one. They were right. Sega soon released the Dreamcast and rather than gain customers, it gained a bad reputation. The media attacked Sega and denounced the Dreamcast with suspicions and doubts. The trust that Sega had once set up was now broken and people lost faith in Sega’s ability to produce game systems.
3. Overhype of the PS2
The #1 selling game console in 1999 was the Sony PSOne, so naturally people were hyped up about PS2. I definitely was. PS2 was the buzz in the gaming industry. It was said to have more superior graphics, sound, and games than any of the consoles at the time. Meanwhile, the Dreamcast was already out in stores and shared similar hardware specs as the PS2,
which would not be released until one year later. People overlooked the Dreamcast because they were all so overhyped about PS2 when really the two had many
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