The Dreamcast[a] is a home video game console released by Sega on November 27, 1998, in Japan; September 9, 1999, in North America; and October 14, 1999, in Europe. It was the first sixth-generation video game console, preceding Sony‘s PlayStation 2, Nintendo‘s GameCube, and Microsoft‘s Xbox. The Dreamcast was Sega’s final console, its 2001 discontinuation ending the company’s eighteen years in the console market.
The Dreamcast was developed by an internal Sega team led by Hideki Sato. In contrast to the expensive hardware of the unsuccessful Saturn, the Dreamcast was designed to reduce costs with off-the-shelf components, including a Hitachi SH-4 CPU and an NEC PowerVR2 GPU. Sega used the GD-ROM media format to avoid the expenses of DVD-ROM technology and a custom version of the Windows CE operating system to make porting PC games easy. The Dreamcast was the first console to include a built-in modular modem for internet access and online play.
The Dreamcast was released to a subdued reception in Japan, but had a successful US launch backed by a large marketing campaign. However, interest steadily declined as Sony built anticipation for the PlayStation 2. Dreamcast sales did not meet Sega’s expectations after several price cuts, and the company suffered significant financial losses. After a change in leadership, Sega discontinued the Dreamcast on March 31, 2001, withdrew from the console business, and restructured itself as a third-party developer. 9.13 million Dreamcast units were sold worldwide. Its bestselling game, Sonic Adventure (1998)—the first 3D game in Sega’s Sonic the Hedgehog franchise—sold 2.5 million copies.
Despite its short lifespan and limited third-party support, reviewers have celebrated the Dreamcast as one of the greatest consoles. It is considered ahead of its time for pioneering concepts such as online play and downloadable content. Many Dreamcast games are regarded as innovative, including Sonic Adventure, Crazy Taxi (1999), Shenmue (1999), Jet Set Radio (2000), Phantasy Star Online (2000), and high-quality ports from Sega’s NAOMI arcade system board.