Sega to cease Dreamcast production

Not killing it yet, though

By Tony Smith, 23rd January 2001

Magic Quadrant for Enterprise Backup/Recovery

Sega has brought its Dreamcast project to an end, according to a report in Japan's Nikkei newspaper. The article claims production will cease come 31 March, not coincidentally the last day of Sega's current fiscal year.

Or will it. Sega US, for one, is saying the story isn't true.

The story appears to follow on from earlier reports that Sega has commenced a plan, outlined last November, to develop software for Sony's PlayStation 2 and Microsoft's Xbox. That claim yesterday resulted in Sega's share price rocketing up 19 per cent.

The cost of promoting Dreamcast to an ever-decreasingly interested market has already cost Sega the chance of reporting a profit this financial year. The company will now report a loss of ¥22.1 bilion for it's fouth loss-making year in a row.

According to Nikkei, Sega is preparing five PlayStation 2 titles and two more for Nintendo's GameBoy Advance, which is due to ship in the March/April timeframe.

According to Sega US' senior spin doctor, Charles Belfield, however, "Sega remains committed to the Dreamcast format going forward".

Belfield's comments don't inherently contradict Nikkei's claim. The paper reckons that Sega will continue to market Dreamcast through 2001 - it simply won't be making any more come March.

That's not so far off comments from Sega's president back in 1999 that Dreamcast might well be the company's last console. Certainly by the end of 2001, when Microsoft launches Xbox, Dreamcast will have reached the end of its expected lifespan. It first shipped in November 1998. In the circumstances, it seems unlikely that Sega will want to spend millions of Yen developing a successor. ®