Sega Dreamcast

After the Saturn's failure and years of losses, Sega wanted a cheap console that was easy to program. In 1997 an IBM team in the US and an internal team led by Hideki Sato worked in parallel. The Japanese design won, with a Hitachi SH-4 processor and NEC's PowerVR2 graphics, and 3dfx sued Sega over it. Sega used PC-like parts, the GD-ROM disc format developed with Yamaha and a version of Windows CE. In most regions it would ship with a built-in modem.

Sega unveiled it in Tokyo on May 21, 1998. The name, a blend of dream and broadcast, came from a contest with over 5,000 entries, and Ryuichi Sakamoto composed the startup sound. It launched in Japan on November 27, 1998, at ¥29,000, with limited stock due to a PowerVR chip shortage, and sold out that day. Later sales were weak. It reached the US on September 9, 1999, at $199, and Europe on October 14.

Its library passed 600 games. Highlights include Sonic Adventure, Soulcalibur, NFL 2K, Shenmue, Crazy Taxi, Jet Set Radio, Rez and Phantasy Star Online, the first online console RPG. The NAOMI arcade board shared its technology, which allowed near-identical arcade conversions. Electronic Arts, however, refused to publish on it. SegaNet opened in the US on September 7, 2000, and Europe had Dreamarena.

The PlayStation 2 announcement slowed sales. Price cuts deepened Sega's losses. On January 31, 2001, the company announced the console would end after March 31 and that it would become a publisher for other platforms. It kept repairing consoles until September 28, 2007. Today the Dreamcast is seen as ahead of its time for online play and downloadable content, and it keeps an active homebrew community.