RealTime IT News

Swan Song for Dreamcast

Over the course of the next few days, Sega has given the public appearance of seriously mulling over its options, although in reality, the company has been weighing its options long before the events of the past weeks.

Sega, it appears, is officially considering shedding its money-draining console making business and instead concentrating on developing game titles across multiple platforms and making a concerted effort to expand into wireless and online gaming.

What was once speculation is appearing to turn into reality, especially when shareholders have their say. In the past, shares of Sega rose sharply upon the "news" of Sega's change of plan. Indeed, fueled by the latest developments, shares of Sega rose 12.93 percent on Wednesday, January 24 and then again 15.75 percent the very next day in European markets. Societe Generale's recent upgrade of Sega's stock to strong buy from sell certainly contributed to this upswing.

A move to software developer may do wonders for a company whose name is currently tarnished by disappointing sales of its last two consoles.

The Dreamcast sold 5.9 million units worldwide to date. An impressive figure, except that it barely dents global Playstation sales of 76 million. Already, the Playstation 2 has sold over 3 million worldwide and is poised to overtake Sega in the coming weeks. Sega has only been able to capture less than 10 percent of the video game market, a sliver of market share.

Sega's game development houses, however, are world class, creating state of the art arcade games as well as critically acclaimed titles across a wide spectrum of genres. Dropping the Dreamcast, could catapult them into the rarified company of Square, Konami and Electronic Arts.

Even if Sega stops Dreamcast production, there is the possibility that it may show up in other set top boxes from other manufacturers. Moreover, the Dreamcast's online capabilities coupled with a few enhancements such as DVD and hard drives could revive the platform, although realistically, that possibility at this time seems unlikely.

While waiting for word of an official announcement, Sega is quick to point out that development for the Dreamcast has not halted. Indeed, Sega has officially announced no fewer than 23 titles for 2001 out of a tot