Former SEGA Executive Reveals Instant Decision Behind Ending Dreamcast Market

Sega Enterprises will conclude the manufacturing of its Dreamcast video game console on March 31, 2001, marking the end of the company’s 11-year history in the hardware market. Peter Moore, president of Sega of America, confirmed the transition, citing a strategic shift toward the company’s more profitable software business.

The decision follows a period of financial pressure for the console, which held a 15% share of the U.S. Market. Despite selling more than 6 million units globally—with over half of those sales recorded in the United States—the Dreamcast struggled to compete against rivals Sony and Nintendo. The company’s move effectively serves as a withdrawal from the console hardware race to focus on software development for competing platforms.

Sega has already secured agreements to produce games for Nintendo’s Game Boy Advance and Sony’s PlayStation 2. The company is currently engaged in discussions with Microsoft Corp. Regarding potential software development for the Xbox console, which is scheduled for release in the fall.

To manage the transition of existing assets, Sega plans to reduce the price of the Dreamcast in the U.S. From $149 to $99, effective February 4. While the company intends to release 30 new titles for the Dreamcast within the current year, long-term software support for the platform remains uncertain. P.J. McNealy, an analyst with Gartner Group Inc., noted the impact on the consumer base, stating, “There’s no commitment to making software for the Dreamcast in 2002.”

Beyond its internal software pivot, Sega has initiated efforts to license its proprietary Dreamcast chipset technology. On Monday, the company announced a licensing agreement with London-based television set-top box manufacturer Pace Micro Technology.