SEGA will retire Dreamcast this week

[Rambus]

NEW YORK (AP) — Sega was expected to announce plans Wednesday to abandon the production of its Dreamcast video-game machine and to slash prices by a third to $99 to get rid of excess inventory, according to sources familiar with the plan.

The Tokyo-based company will then focus its efforts on developing and supplying its home software games to such rival companies as Sony Computer Entertainment and Nintendo.

The announcement shouldn't come as a surprise; last week the company said it was considering abandoning the console as an "option."

With the announcement, Sega also was expected to report that U.S. sales of Dreamcast will come in below the already reduced forecast of 4.5 million units sold through December, the source said. The company's original goal was to sell 7.5 million units in the U.S. by March 31.

Read More (http://www.usatoday.com/life/cyber/tech/review/games/2001-01-30-sega.htm)

[ginoledesma]

That's sad news. I guess it was only a matter of time.

[Rambus]

PALM NEWS - Wednesday, 31st January 2001

Sega is to launch a range of games for the Palm Computing platform as part of a restructuring programme which will see it withdrawing from its traditional business of manufacturing games consoles. Sega's Dreamcast console has suffered from intense competition from Nintendo and Sony, leading to Sega's decision to abandon manufacturing and focus on creating content and networks for gamers worldwide. The company already has an agreement with Motorola to provide games written in Java for future Motorola handsets and now plans to bring its portfolio of entertainment titles to the Palm platform. It is thought that Sega's games for Palm devices will be network-enabled, allowing users to compete across a mobile internet services such as Palm's MyPalm portal.

[payaSo]

Here's an anecdote which appeared in today's Asian Wall Street Journal.

The day before the PlayStation 2's worldwide debut, Ken Kutaragi, head of Sony's videogame business, visited the office of Isao Okawa, the controlling shareholder of Sega Corp, to demonstrate the features of Sony's new game machine. Okawa was impressed, later telling his people that the PlayStation's superior performance and design made him feel as if a brilliant "architect" had created it. He then berated a Sega executive for being a mere "carpenter".

(end of anecdote)

But despite the superior design, Sony's PS2 is not without its problems. For one, Sony has had problems delivering enough machines to meet demand created by its own outstanding marketing. The new machine has p*ssed off some game software developers because of its complexity (some of them say it will take several years for them to adjust to the power of the new machine). And Sony has admitted that the costs associated with PS2 development are draining profits. In the year ending 31 March 2001, Sony will have shipped 9 million PS2s, one million short of its sales target for the same period.

Sega has said that since April 2000, it has shipped 2.32 million Dreamcast units worldwide, 44% below its initial goal. Software sales were 34% below the goal for the same period. Sega will slash the Dreamcast's price to $99 to clear out an inventory of two million units. The company plans to create four games for PS2, and two other games for the Nintendo Game Boy Advance. The company is also talking to Microsoft and Nintendo about writing software for those companies' new machines, due out later this year.


Some more data for all of us:

Total global retail sales for video game consoles and software, in billion US dollars:

Nintendo 64: 1998 3.75; 2000 2.41; % change -35.62
Sony PlayStation: 1998 9.05; 2000 4.74; % change -47.59
Sony PlayStation 2: 1998 none; 2000 3.13; % change N/A
Sega Dreamcast: 1998 none; 2000 1.31; % change N/A
Game Boy: 1998 1.68; 2000 2.90; % change +81.25

Total: 1998 14.40; 2000 14.49; % change +0.65

Source: International Development Group