Released on November 27, 1998 in Japan and September 9, 1999 in North America, the Sega Dreamcast was a wonderful little console, and many people have called it a wildly underrated console that was ahead of its time. Unfortunately, it was also an incredible failure that effectively knocked Sega out of the home console market. From this point on, that market belonged entirely to Microsoft, Sony, and Nintendo.
It only sold around nine million units and was officially discontinued in March of 2001, a mere seventeen months after its release in North America. The masses clearly weren't interested. But why? These are 10 reasons why the Sega Dreamcast failed.
10 The PlayStation 2's Impending Release
The PlayStation 2 is the biggest gaming console in history, and it effectively steamrolled the competition. While the Xbox put up a respectable challenge, the PS2 slapped the Dreamcast away like it was a fly. The PlayStation was a successful console, and hype was incredibly high for the PS2.
The Dreamcast had the unfortunate distinction of releasing just 13 months before the PS2 in North America, and many people decided that they would rather save their money for that console than spend it on a Sega Dreamcast. It was dead in the water and discontinued just five months after the PS2's release.
9 The Sega Brand Was Dying
By the late 90s, Sega was quickly being pushed out of the home console market due to a rather lame past. The Master System was obliterated by the NES back in the mid-80s, and while the Sega Genesis did relatively well in North America, its successor, the Sega Saturn, wasn't very well received and fared poorly against the likes of the PlayStation and the Nintendo 64.
By the late 90s, Sega was already on thin ice, but the lackluster launch of the Dreamcast, coinciding with the unbelievable hype surrounding the PS2, all but guaranteed its failure.
8 The Saturn's Lame Roster
This one sort of ties in with the whole "the Sega brand was dying" thing. The Sega Saturn's lineup was considered disappointing by many, leading to its inevitable demise. Aside from games like Virtua Fighter and the Panzer Dragoon series, there was nothing that helped distinguish this console from its competitors.
Meanwhile, Sony was launching many notable brands over on the PlayStation, and the N64 was pumping out some of the most well-regarded video games ever made like Mario Kart 64, GoldenEye, and Ocarina of Time. The Saturn, and the impending Dreamcast, never stood a chance.
7 Poor Marketing
Marketing can make or break a product. Unfortunately, it shattered the Dreamcast. The PS2 was touted as the next great machine, and many people focused on its technological power. In short, it was seen as a far more powerful and robust machine than the puny Dreamcast.
On top of that, the PS2 visibly looked like a slick new machine, complete with a black exterior, rugged edges, and an interesting horizontal landscape. The Dreamcast looked like a children's toy and had the goofiest controller in existence. Everyone wanted the new toy, not the Nintendo knockoff.
6 Terrible Games
Power is good and all, but it is meaningless if there isn't a quality lineup of games to back it up. Fortunately, the PS2 had that in spades. In the initial years of the PS2, it released games like Metal Gear Solid 2, Grand Theft Auto III, Silent Hill 2, Final Fantasy X, Jak and Daxter, and Ratchet & Clank.
It's an unbelievable lineup in such a short amount of time, and it gave the PS2 a boost it didn't really need in the first place. The Dreamcast had... another Sonic game. Yeah, it had a few good titles, but come on. Look at that PS2 lineup!
5 Bad Launch Games
Even those who bought the Dreamcast were left feeling disappointed due to the poor launch lineup. Perhaps the console could have thrived, or at least survived, if it made a good first impression, but it didn't. While the PS2 promised a ton of interesting titles (as we've just gone over), the Dreamcast launched with the likes of Soul Calibur, Mortal Kombat Gold, Sonic Adventure, NFL Blitz 2000, and House of the Dead 2, among others.
All established games, but none the likes of which the PlayStation 2 offered. You can only play so much Mortal Kombat, ya know?
It may not look like much now, but DVDs were once the coolest thing on the market. There was a lot of buzz surrounding DVDs back in the late 90s and early 2000s, as the technology was brand new and promised crystal clear images and bombastic sound the likes of which VHS could never accomplish.
DVD players were expensive, but the PS2 served as a cheaper alternative. So, you essentially got a powerful gaming system AND a DVD player in one package. How could anyone in the early 2000s say no to that?
3 Cost Disadvantages
The DVD technology is also related to one of the major reasons for the Dreamcast's failure - a significant cost disadvantage.
During an interview with Famitsu magazine, a Sega marketing employee named Tadashi Takezaki stated, "Sony was part of the team that developed the DVD standard, so they could develop a system around that. Sega, meanwhile, was buying everything from outside companies, so it was at a distinct cost disadvantage. We couldn't easily cut costs on manufacturing."
2 Network-Centric Strategy
Takezaki also admitted that the Dreamcast's network-centric strategy proved dire for the company's, and console's, prospects. They wanted to introduce online gaming and were willing to sell the consoles at a loss in order to build an online audience.
According to him, "Sega's whole business model was to build a userbase of cheap network devices, then provide services and products through the internet." However, "accessing the net for free...was simply fantastic, and we were the ones footing the bill."
1 The Rise Of PCs
And finally, we come to one of the biggest reasons for the Dreamcast's lack of success: the rise of PC gaming. PC gaming has always been a thing of course, but it really took on a world of its own in the early 2000s thanks, ironically, to networking and the internet.
This was detrimental to the Dreamcast's failure, as many people would rather play online gaming through their PCs than a Dreamcast with a rather lame lineup of video games. All of this combined to make the Dreamcast a monumental, if rather respectable, disaster.