DREAM ON : The history of the Dreamcast, Sega's final console

Sega, one of Japan’s greatest exports in gaming history. Starting off as a company based in Hawaii that sent games to US troops, they would move to Japan by beginning to make amusement games throughout the 20^th century. Games such as Periscope, punching bags, pinball machines, early jet simulators and many more old school arcade games were what Sega made. After many years of American service, the company would find a new home in Japan, where they would start dabbling in electronic arcade games such as Head On, Zaxxon, Frogger (in partnership with Konami) and others would turn Sega into one of the most respected arcade amusement companies not just in Japan, but mostly all over the world. 

Periscope 1966

In 1982, Sega would expand into unknown territories for them, the gaming industry. Their new President, Hayao Nakayama, would give the thumbs up for the SG-1000; this would be Sega’s first console. It did not sell well due to their stubbornness to release third party games for the console, whereas Nintendo’s Famicom allowed other companies to make games for them. Everything was going fine until 1983 when the Great Video Game Crash happened. Atari allowed too many companies to make games for their 2600; many of these games were buggy and unplayable, nearly bankrupting Atari. Despite this, Sega’s SG-1000 sold over 100,000 copies in Japan and considered it a small success. Around this time, Sega became a full Japanese company, they struck a deal with Isao Okawa of CSK to form a new Sega that would focus on gaming and arcades for the next generation.

Sega Master System 1985

From 1985 to 1987, Sega launched their second console. The Master System was its name and this time it was released in other continents such as Europe & North America. They would again try to battle against Nintendo’s NES, but they were still 2^nd place despite its rising sales of over 10 million Master Systems. It even managed to sell well than the NES in Europe, due to a deal with Richard Branson’s Virgin group. Many games released for the console included Outrun, Alex Kidd, Afterburner and more. After a surprising success story for Sega, they were not done yet. In 1988, Sega outdid themselves by plunging into the 16 bit graphics scene with the Mega Drive. It was named the Genesis in the USA because Rosen believed it was a new beginning for Sega & the gaming industry. It’s main success was with its aggressive advertising, which was mastered by Sega’s American CEO Tom Kalinske. The company boasted how fast their console was, how they had better music & graphics than Nintendo’s NES and featured many celebrity tie in games (Even Michael Jackson, the King of Pop himself, had his own game on the console), ending with a memorable slogan, “Genesis does what Nintendon’t”. Sega were up everyone’s faces for the right reason. Outside America, the console was named the Mega Drive. The UK’s adverts, however, were different and featured a teenage boy promoting Sega everywhere he went with the slogan “It takes ages to be this good”, with the word ages turned backwards to say Sega. 

Sega Mega Drive/Genesis 1988

In 1991, Yuji Naka was given the chance to introduce a new mascot to compete against Mario; he was responsible for creating Sonic the Hedgehog and gave Sega a new attitude against Nintendo’s upcoming SNES. The first 3 Sonic games were masterpieces that gave players the chance to play as the titular character through speedy yet controllable levels. Like with Apple vs Android, Mario vs Sonic was a huge speaking point in the industry as Sonic was a breath of fresh air for Sega that needed a mascot that was leagues different to Mario through attitude and gameplay. Because of this, Sega secured over 50% of the videogaming Market share and had become a gamechanger. They would continue this by agreeing rights for TV shows based on Sonic, opening new amusement parks all over the world (most notably in London, Akihabara & Sydney) and its total sales of over 30 million consoles. While Sega were enjoying its high rise to the top, it would not be that long until they would face their first dark age.

The first Sonic game : 1991

In 1991, Sega released the Game Gear. This was a handheld console that advertised that they had coloured graphics and the Gameboy did not. Even though some admired its graphics, the Game Gear would struggle against Nintendo’s Gameboy juggernaut with only 11 million Game Gears sold. 2 years later, Sega would jump onto the CD craze and release the Sega CD. Even though it was revolutionary at the time, it failed to grab the public’s attention due to mostly all of the games had cutscenes that had less full motion than VHS tapes with a lot of acting being deemed cringy; even the console was an add on to the Mega Drive on top. Therefore, the Sega CD was a failure. This would also be when games such as Night Trap & Mortal Kombat were being debated in American Congress on whether violent games should be banned or sold with restrictions. This led to the formation of the ESRB & PEGI, American & European companies that rated games through letters & ages to determine and regulate the maturity and violence in video games. Sega would yet again release another add on that would prove to be a disaster, it would be released during the improvement of videogame graphics from the 16 bit to 32 bit era. This was named the 32X and would be quickly released in 1994. It was yet another failure for Sega; it had to have its own charger and the games would easily glitch out. Not even the debut of Virtua fighter could save its demise. One of the producers for Sega argued that the president released the 32X because of his concerns for Atari’s flop of a console named the Jaguar.

Sega Saturn : 1995

Before the end of 1994, Sega finally announced their 4^th gaming console for the next generation named the Saturn. It was a 64 bit console that would start to release games in 3D, while most of the games would continue to be made in 2D. At first, it did really well by selling over 200,000 consoles in Japan on the first week, thanks to its arcade ports of Time Crisis, Virtua Fighter and Panzer Dragoon. Meanwhile, in the USA, Kalinske decided to release the Saturn on ‘Saturn Day’ 2^nd of September. This never happened. Why? Because in the very first E3 in 1995, Sega announced that they would surprisingly release the Saturn on the day they had their conference in May. This was an unfortunate announcement as Sony would announce that they would be stepping into the gaming industry with their PlayStation in 1994 and 1995 in Japan and rest of the world. The main reason for Sony’s entrance was due to a falling out with Nintendo on partnering up to make a CD add on for the SNES. After the Play station’s release and also the Nintendo’s N64 in 1996, the Saturn had lost its impact because of their prediction that the improvement 2D graphics would be more important than 3D and would lose a lot of support for the system. 

Bernie Stolar, Sega CEO : 1998-99

Because of the console’s failure, Tom Kalinske left Sega in 1996, due to differences between him and Sega of Japan. Irimajiri would be named the new Sega of America CEO and then the President of Sega 2 years later after the resignation of Nakayama. Around this time, Sega were planning to merge with Bandai, another gaming company that made software for Sega and were responsible for Digimon. Nakayama’s resignation and employees from Bandai acting sceptical would cause the $1 billion merger to disintegrate. Bernie Stolar would take over as CEO of the American Sega in 1998, after masterminding the release of Sony’s PlayStation there. This felt like a betrayal to Sony as Stolar was the man who gave the console a chance to sell millions of consoles in the USA. When Bernie took over, one of the first statements from him was that ‘the Saturn is not our future’, eventually discontinuing the Saturn all over the world. Sega would  later lay off over 30% of its employees due to the Saturn’s demise. He would partner up with Irimajiri to work on their next console, in order to secure their high ratings in the marketplace again.

Rare pictures of concept designs for the Dreamcast

As PlayStation & N64 were working wanders in the gaming industry with games such as Crash Bandicoot, Metal Gear Solid, Parappa the Rapper, Mario, Zelda, Pokemon and others respectively, Sega were busy planning on their future. Both Sega of Japan & America would draft and design ideas for what their next console would look like. They were both codenamed Blackbelt (USA) & Whitebelt (Japan). Japan’s design won over America’s version because it had bigger memory files and higher resolution graphics with the help of NEC & Hitachi. Orignally, 3DFX of America were partnered up with Sega until, 3DFX accidentally advertised their partnership on some gaming magazines, leading to the partnership being called off. This would cause their first major issue to occur; EA’s departure from making games for Sega. EA used to have a healthy relationship with Sega by releasing games for them since the Genesis such as Fifa, Madden and others. When they heard that the 3DFX was not being used, they decided to quit working with Sega because they were not ready to work on making games with graphics from both NEC & Hitachi. This mean that there would no longer be EA games on Sega’s upcoming 6^th console. 

Microsoft's Modem allowed online play for the console

As Japan’s design was chosen, the console’s codename was changed to Dural, named after a character in Virtua Fighter; it would then be changed yet again during development to Katana. Whereas, the Saturn failed due to being rushed into release, Sega took a different philosophy and allowed the new console to be developed in its time as Sony & Nintendo were continuing to support their consoles. Sega made sure the console had a pleasing design, easier to make games for, had a comfortable controller, secured more third party games and (most importantly) have an added in Modem that allowed gamers to play online. Their choice of online gaming also gave them an unlikely partnership with Microsoft, who also added in Windows 98 to allow people to surf the internet on the console.

The official Dreamcast logo (U.S. Version)

Finally, the Katana was finished and had a new design. The controller was shaped to felt comfortable on hands, the colour changed to white in order to please people to buy it and it was less heavier than the Saturn. Only one thing did not fell right for Sega, they wanted to change the name for its initial release as they thought it would scare away people who were not as competitive as others. A huge competition was set up for all Japanese employees to search for a new name with over 5,000 people taking part. According to one of the employees, someone named Kenji Ito won the competition and even made a spiral logo to go with it, the winning name was the Dreamcast. It was a word that combined both ‘dream & ‘broadcast’ as if it felt like a dream playing a video game. Its start-up sound when turned on was composed by famous musician Ryuichi Sakamoto, famous for composing music for the Barcelona 1992 Olympics, ‘Merry Christmas Mr Lawrence’ & ‘The Revenant’. Originally, Sega did not want their name on the Dreamcast, just like Sony did to the PlayStation; they would change their minds later as they wanted Sega’s name to show that they were back from dark times. 

Sonic Adventure : 1999

In late 1998, the Dreamcast was launched in Japan. This was done to test how the console would do, just in case if they had to cancel the release everywhere else. During the launch, Sega announced that Sonic was getting a major redesign and a new main game after 6 years as the Saturn’s Sonic got cancelled due to motion sickness. Sonic Adventure was released to critical acclaim for its comfortable debut into 3D. Decades later and reviews became mixed due to the game not timing well and audio voiceovers not being synced correctly. Before the launch, Sega failed to meet shipping goals with NEC as many graphics chips were not made yet and thousands of people had to wait a few weeks after the launce to finally get their Dreamcast. Sega would sell nearly 1 million consoles in Japan and were ready to plan for the Dreamcast’s release around the world.

American promotional poster for the Dreamcast

In the USA, Bernie Stolar used the same tactics he had used while working at Sony to launch the Dreamcast. Luckily, the Launch date was set for 9/9/99. All 9s in one date felt perfect to Stolar as the number 9 in numerology terms meant universal love, yet again relating to online multiplayer. 15 games were released on the Dreamcast’s launch in America and it looked like it was going to be extraordinary. Many Sega fans were expecting a launch event just like in 1989 with the Mega Drive/Genesis. 300,000 Dreamcasts were pre-ordered, even though Final Fantasy 8 for the PlayStation was also competitively released on the same day. When it came to their games, Sega managed to find success with Sonic Adventure, Virtua Fighter 3, Segs Rally Championship, Seaman, Crazy Taxi, Jet Grind Radio, Samba De Amigo and also Sega’s own sports games such as NBA 2K, NFL 2K, Virtua Tennis & Virtua Striker. Sega would use their online capabilities to allow gamers to compete against others around the world with games such as Chu Chu Rocket, Power Stone, Soul Calibur and Phantasy Star Online; one of the first online RPGs to be created, this was before World of Warcraft & Runescape were released. Its advertising on TV focused on its multiplayer, online, its games and (importantly) its graphics. Even though there was no physical contact of ‘bullying’ other companies, Sega’s launch of the Dreamcast was also invading newspaper front pages; all with the slogan “It’s Thinking”, to show the power of the console. 

A collection of Dreamcast games

Even though the launch was on the horizon and just a month before the Dreamcast hit shelves, Bernie Stolar was fired as the CEO of Sega of America. In an interview with G4, Stolar would state ‘I didn’t agree with Mr. Okawa, so we had parting of the ways and I left the company’. In his place, Peter Moore (who helped out with the launch) took over as CEO. Finally, the Dreamcast was launched. With a price of $199, it sold over 500,000 consoles in two weeks and fared better than the Saturn in the USA. Just a month later, the Dreamcast sold 1 million units and was ready for a European launch for 14/10/1999. Sega of Europe, instead, focused more on online multiplayer with adverts displaying player 1 and player 2 in real life from who can shave someone’s head off first or who can throw a stone the furthest. Most music came from Robbie Williams, his single ‘She’s the One’ was released during the launch and was used as the main music for the Dremacast’s launch in the UK. It even reached #1 and was bundled with the console as a bonus. Also, Sega made sponsorships with football clubs, most notably with Arsenal from 1999 to 2002. Other clubs included Sampdoria, St Etienne & Deportivo la Coruna from Italy, France & Spain respectively. After two months of being in the shelves, over 500,000 Dreamcasts were sold, doing nearly the same Numbers as what Sega did in North America.

Sony's PlayStation 2 : 2000

While Sega was enjoying another successful release since the Genesis and taking the whole world by storm, Sony were secretly planning their second PlayStation in an attempt to rain on Sega’s parade. It would be confirmed on March 1999 that Sony were indeed developing the PlayStation 2. It had the same but clearer graphics, more third party games and the addition of allowing to play music CDs & DVDs. This was their attempt to rise the sales of their next consoles as they understood a lot of families would love to buy a console that played games, music, movies and tv shows. When Sega heard about the announcement, they realised that it was too late to change the Dreamcast or make a newer version for the next few years; they decided to keep strong and continue to support the Dreamcast until they plan to make changes when the PlayStation would be released in Japan on 4/3/2000. Also, Nintendo announced that their were working on ‘Project Dolphin’, their next console with the same graphics as the Dreamcast and would promise that CDs were being used. Even Microsoft gate-crashed into the gaming industry with their Xbox planned for a 2001 release. 

Phantasy Star Online : 2000. An online game

As all of these consoles were announced, Sega saw a change of sales with the Dreamcast. They were decreasing and were starting to lose their early lead yet again, they had secured 27% of the gaming marketplace when the Dreamcast was launched. When the PlayStation 2 was finally released, 980,000 consoles were sold on day one! Only the Dreamcast sold over 200,000 consoles in the first week and this felt like a huge blow for Sega. They were losing money and the first thing they did was not to decrease the price of the Dreamcast; instead, Sega closed over 200 arcades over the world. Sega closed down the Sydney arcade due to the place not ageing well, they resigned from London’s huge arcade due to criticism and low foot traffic and others were closed because they were not achieving a lot of visitors. Sega of America would later start up a gaming service named SegaNet. Sega of Europe would also form an online service named Dream Arena; it was launched a year before America’s version. Both these online services allowed gamers to chat, email and surf the internet; it even added more online games such as Quake Arena, Unreal Tournament and other games. Even though this addition of online services kept Sega alive and dropped the Dreamcast’s price to $149, the PlayStation 2 was about to be launched in America, Europe and everywhere else on October & November 2000.

Sega's response to Sony's shipping failures

As the PlayStation 2 arrived with its quirky advertising lead by David Lynch of ‘Twin Peaks’, Sony had overseen a massive amount of units sold. By early 2001, over 10 million PS2s were sold around the world. On the other side, the Dreamcast was losing the battle. Shenmue, a revolutionary game at the time, was supposed to be the game that would change people’s minds to buy a Dreamcast and ditch the PlayStation 2 at the final minute. The game would only sell over 1.2 million copies, even though the game had a massive amount of praise. Sega of America stated that they needed to sell over 5 million units in order to stay up in the gaming industry; they would fall short with only 3 million Dreamcasts sold since its launch date of 1999. Sega would then lose over $400 million dollars and would be in an enormous pile of debt. There was still a bit of hope as Sony’s launch of the PS2 was having problems with their stock being bought too quickly, Sega would still sell the Dreamcast and were still surviving; only for the original PlayStation’s smaller brother PS One to outsell the Dreamcast during the holiday season of 2000. Even Sega were being dwarfed in the market share with only 15% as compared to Nintendo’s 35% & Sony’s 50%. Because of this, Irimajiri stepped down as the Chairman of Sega; in his place, Isao Okawa (who helped Sega become a full Japanese company) took over. 

The success the PS2 caused Sega to leave the console business

Because of what happened with the Dreamcast, Okawa desired Sega to abandon making consoles and instead make video games and arcades for other companies, meaning that they would make video games for Sony, Nintendo and Microsoft. Even former CEOs of Sega shared the same ideas. David Rosen, who left Sega in 1996 after 31 years as the Chairman, also believed that Sega should stop making consoles as it limited their potential as a video game company. Bernie Stolar believed that Sega should have sold themselves to Microsoft and made games for them. Judgement day had arrived on October. Both Peter Moore & Charlie Bellfield (Europe CEO), were chosen to seal the fate of the Dreamcast and both decided that it was time to abandon making videogame consoles and focus more on software. Both CEOs would later resign from Sega afterwards. On the 31^st of January 2001, Sega officially announced that the Dreamcast was Discontinued. The 31^st of March would be the final day of Dreamcasts being manufactured. Over 930,000 units were sold, these were unsold inventory Sega quickly sold during the final 2 months with price reductions from $99 to 49.95. The last few Dreamcast consoles were autographed by the Heads of many video game studios that Sega worked with, including Yuji Naka & Yu Suzuki.

Isao Okawa, Saviour of Sega

The dream was over, and it even looked like Sega’s life was nearly over. With over $500 million of debt and financial problems, Sega was on the verge of going out of business. Even more mournful news came when Okawa passed away. Luckily, when it came to sorting out his wealth, it was written in his oath that his earnings would be donated to Sega when he dies. A total of $695 million was transferred to Sega and kept them alive to transfer into making games for other consoles. And because of that, Sega were ready to leap into their next adventure. They would go on to make games for the Xbox such as Panzer Dragoon, Jet Set Radio and more; Sony were given the rights to Virtua Fighter, a remake of Altered Beast, Shinobi and others; and lastly, Nintendo were given the rights for many games made by Sonic Team, the company that made games based on the Sonic franchise. Even though Sega are not as mighty and transcendent as they used to be in the 90s, they are still a major video game company to this day. Recently, in 2013, they bought independent games developer Atlus, who are responsible for the Persona & Catherine series. Other companies that ally with Sega include Football Manager’s company Sports Interactive and even the Games Workshop, who own Warhammer and even offer Duke of Edinburgh places for Warhammer for its painting and strategy. 

Sonic 25th Anniversary event : 2016

Sonic, on the other hand, has not had a receptive future since Sega’s abandonment of console gaming. Games such as Sonic Heroes, Sonic Unleashed, Sonic Lost World and recently Sonic Forces had divided many fans due to its comfortability on nostalgia, self-aware jokes and its lack of originality from its past games. The remake of Sonic the Hedgehog in 2006 was critically panned for its buggy gameplay, over the top story line and the useless need for a human character to fall in love with the titular character. Sonic Boom: Rise Of Lyric also faced the same criticism 8 years later. The series has also had some success with Sonic Generations, a game based on the 20^th anniversary of Sonic; Sonic Mania, a 2D game based on the first trilogy; and the Movie that came out this year. It was originally and infamously going to use a new design for the character, but had to get Sega involved to fix the design. This was a perfect turn of events, which lead many to enjoy the movie and gain over £300 million in the box office. Sega even dabbled into returning into the arcade amusement scene too. They struck a deal with British bowling company Superbowl UK to add arcade ticket areas and amusements that made people reminisce of the days when Sega used to run Sega World in the 90s. Even though Akihabara shut down their Sega Arcade in August, at least Sega is still a name to be aware of when it comes to video games and arcades.

Dreamcast launch event in a Babbage's : 1999

To conclude, Sega is still going strong. Even when people would favour the PlayStation 2, Nintendo GameCube or Microsoft Xbox, the Dreamcast still lives on in people’s hearts. It was a console that was ahead of its times, revolutionised the way we played online, gave Sega a lot of hope to continue to make perfect games in 3D and showed that when going through many trials and errors in the late90s, the Dreamcast was a sign that Sega were not giving up and introduced many people into  what videogames have become. There may have been problems with the PS2’s hype, the concern of Sega’s future, the lack of games from Squaresoft & EA and poor timing; these problems may have killed the Dreamcast, and the people that owned it still kept owning it and played on it when it comes to looking back at Sega’s last hurrah in the console gaming industry. And for all of that, the Dreamcast's legacy lives on.