The failure of the Dreamcast
Posted by Trixter on March 22, 2017
The Dreamcast had a very short life; officially less than 3 years, although it felt like 4 because the Dreamcast continued to be sold in the US after it was officially discontinued. I was recently part of a discussion where someone asserted that piracy was the major contributing factor to the failure of the Dreamcast, and I disagree. The Dreamcast failed to achieve long-term acceptance, in my opinion, primarily because of the competition of the PS2.
The PS2 followed a long, very successful run of the PS1 and had more pull with Sony fans (Dreamcast sales dropped sharply in the USA when the PS2 USA launch date was announced). Additionally, the PS2 was backward compatible with PS1 games, and was also a DVD player, both of which were very appealing. Finally, some major developers and publishers did not support the platform (most notably Electronic Arts and Squaresoft), having been burned by Sega’s mismanagement of various aspects of prior consoles (such as announcing the Saturn early, which killed 32X sales, and also by the Saturn being very difficult to write code for due to its use of multiple processors).
If you were a brand-agnostic consumer with a choice between the PS2 and the Dreamcast, and you were trying to figure out which one was more special, you had a choice between a console that could play games on the internet (something only computer gamers cared about in 1999), or a console that could play hundreds of the previous generation’s games as well as DVDs. That was a one-two punch that the Dreamcast could only overcome through brand loyalty to SEGA, and it did so, admirably, for 3 rough years. Piracy was a problem for Dreamcast only after the Dreamcast was already on its way out, not the other way around.
I don’t view the Dreamcast as a complete and utter failure, but rather as a console that had a shorter-than-expected lifespan.
Oldskooler Ramblings 
WordOfLife said
Sony also made a wonderful job by lying to the public about the performance and arrival time of its own PS2.
This successfully prevented a lot of potential buyers to go for the Dreamcast to fill the gap between PS1 and PS2. They were justing waiting for the PS2 which was supposed to be “right around the corner and so much better than Dreamcast”.
codebetyar said
Yeah, piracy was definitely not the deciding factor, but an important factor nonetheless. If fewer console units are sold, there are fewer potential sales to make, and companies are more sensitives to margins. And that can turn away people from developing to that particular platform(something that affected heavily the Atari ST and the Amiga too).
Sony was leading excellent marketing at the time, and the DVD+backward compatiblity+EA/Square was too powerful of a combo. There were some heavy hitters released in late 1999 and in 2000 for the PS1, and that meant that the PS2 had a varied library from the beginning. It is important though that pricing matters, like it was the case with the PS3. Though another problems were that blue ray was not that big of a deal, and the real good games were very late. (Gran Turismo 3 was released in the first year of PS2s life, an improved GT4 should have been released for the PS3 the same way and that could have bumped up sales a bit)
Trixter said
Piracy doesn’t hurt console sales, though — it can actually increase them. It hurts game sales, but you still needs the consoles themselves to play pirated games.
codebetyar said
I think it hurts in an indirect way, because there are less games made for the platform and therefore there is less incentive to buy one.
I am sure that was not the only reason, but why didn’t Namco port other games after the fantastic Soul Calibur? And probably Sega did not have the best relationship with fellow Japanese developers, but no Koei, no Tecmo?