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Farewell, Dreamcast

The vultures appear to be looming over Sega. The embattled company was first out the gate with the first of the next-generation consoles.

Also of note was Sega's decision to outfit the Dreamcast console with a built-in modem, thereby creating the first online console.

The innovation didn't stop there. Sega went on to create the first gaming ISP for the Dreamcast (although open to PC owners too). Called SegaNet and created specifically for low latency gaming in mind, the service would do what no other service has ever done for consoles: create an online hub for Dreamcast gamers where they could interact and compete in multiplayer games.

SegaNet opened gamers up to multiplayer gaming, something that has been gaining momentum and popularity among PC gamers in the last few years. Alas, it didn't appear to be enough push Sega out of the red ink.

According to a story in The Nihon Keizai Shimbun, Sega is planning to stop the production of Dreamcast by the end of March. The article states that Sega is no longer accepting preorders for its console and is only assembling units from parts in its existing inventory.

Furthermore, the article suggests that after Dreamcast production has been halted, Sega will then concentrate its efforts on creating software and games for rival companies like Sony, Nintendo and possibly for Microsoft's Xbox.

As far as the news goes, some might say that this story is not newsworthy at all, because unconfirmed reports of Sega developing games for rival companies have been around for months, however this time things are slightly different.

Sega has issued a statement earlier this week saying that the company will not comment on any rumors. Few weeks ago, when The New York Times published a story on a possible Nintendo - Sega merger, both companies denied the rumors, but no statement have been made regarding possible partnerships or otherwise mutual deals.

In October of last year, when Sega posted yet another quarterly loss it also announced a new business plan for the future of the company and the new plan clearly stated that Sega will be getting out of console hardware.

The plan also vaguely spoke of other new ventures like set-top boxes and cell phones. To underscore the uncertainty of these times for Sega and the industry, shares in Sega traded up to 19 percent higher upon speculation. Sega's exit from console manufacturing appears