On the 21 May 1998, Japanese salarymen opened their newspapers to find a full-page advertisement showing a picture of a battlefield littered with the bodies of samurai. Overlaid on to the gruesome scene was the text: “Has Sega been defeated for good?”
To most onlookers, the answer was a resounding ‘Yes’. Following a triplet of high-profile hardware disappointments in the Mega CD, the 32X and, to a lesser extent, the Saturn, Sega’s console successes had been few and far between in recent years. Moreover, despite some strong creative software, the Saturn’s crushing worldwide defeat at the hands of Sony’s PlayStation and the Nintendo 64 had left Sega with losses of $242 million for the financial year ending March 1998. Could there really be a way forward for the beleaguered company?
But the advertisement was one of a pair taken out by Sega itself, the follow-up published the next day in the same papers, now showing the samurai rising to the feet in readiness to fight once again. Six months later Sega would launch the Dreamcast, the company’s final foray into the hardware manufacturing business, a console on whose shoulders the fortunes of Nintendo’s one-time main rival rested, and in whose innovative design the very future of video games could be perceived.
Two rival R&D teams competed against each other to design a machine capable of placing Sega ahead of its rivals, one based in America and one based in Japan. This unusual gestation period came about when the newly appointed Sega of Japan president Shoichiro Irimajiri enlisted the services of Tatsuo Yamamoto from IBM to work on a design in the United States. However, when Hideki Sato, head of hardware development at Sega of Japan, caught wind of the plan he instructed his own team to produce a design for a new console, challenging his boss to choose whichever console came out stronger.
At first, Irimajiri opted to go for the IBM design that used graphics processors from the company 3Dfx. But when 3Dfx leaked details and specifications of the then- secret Dreamcast project when declaring their IPO, Sega immediately pulled the plug on the project, and instead opted for Sato’s design.
The specifications were impressive. As well as offering four controller ports for multiplayer, and memory cards with LCD screens that could be removed and used as rudimentary handheld systems away from the console, the Dreamcast was the first system to come with a built-in modem for online gaming. Despite a somewhat tepid Japanese launch, the Dreamcast’s innovative features secured 300,000 pre-orders and 500,000 unit sales in the first two weeks following its US launch.
EA decided not to support the machine, but the similarities in internal architecture between the Dreamcast and Sega’s cutting-edge Naomi arcade hardware meant that the console became home to some of the best arcade-to- home conversions such as Soul Calibur and Crazy Taxi. The Dreamcast exclusive titles maintained the bright, primary-colour aesthetic of Sega’s arcade output with games such as Sonic Adventure and Power Stone while the SEGA Sports label plugged the gap left by EA’s shunning of the machine with NFL 2K1, marketed as the first football game with online play, outselling the official Madden game during its first weeks on the market.
But the announcement of Sony’s successor to the PlayStation dealt a shuddering blow to the Dreamcast’s fortunes, Sony’s marketing promise of a mysterious ‘Emotion Engine’ that would elevate video games to a new art form slackened interest in Sega’s machine, which was soon seen as a stop-gap. In truth, the Dreamcast was years ahead of its time. Its pioneering work in introducing the first console MMORPG and allowing players to play against one another across the world, established concepts that define video games today. In March 2001, two years after the system’s US launch, Sega announced it was not only discounting the Dreamcast, but retreating from the console hardware business altogether.