Kazza
Member
Jenovi, with another forensic look at Sega's past:
The video itself contains lots of interesting info and is well worth 20 minutes of your time, even if you feel you have already heard everything there is to know about the story of the Dreamcast. Still, I've summarised some of the most interesting parts below:
1. He doesn't believe that piracy killed the Dreamcast
His main argument against this often cited reason is the game attach rate as compared to other consoles of the time. As you can see, Dreamcast falls somewhere in the middle in this regard, doing better than the PS2 at a similar point in its lifetime cycle, but worse than others:
2. Ruinously expensive hardware/software development, combined with too low of a US launch price, was a greater factor:
He thinks that the story of Bernie Stolar setting the price at $199 against the wishes of SoJ probably has some truth in it, and resulted in every US Dreamcast having to sell 8 games to break even (as opposed to 5 at the originally planned price of $249). According to his sources, the machine was still costing as much as $250-285 per unit to manufacture two years after launch.
3. EA refusing to publish their games on the system wasn't such a big deal
He says that sales for NFL2K on Dreamcast were similar to Madden 2001 on the PS1 (901k for the former and 990k for the later) and much higher than the 661k that Madden 2001 sold on PS2. Combine that with the high critical and user acclaim that the NFL2K series was getting, and the whole EA thing doesn't seem likely to have had as big an effect as is sometimes claimed.
He thinks the main reasons as to why Sega had to prematurely retire the Dreamcast and exit from the console market are as follows:
1. Decline in other revenue streams (primarily the premature killing of the Saturn in the US by Bernie "The Saturn is not our future" Stolar, which was largely responsible for a 59% decline in Consumer Division (i.e console hardware/software) sales from 1997-1999, plus a 26% fall in Amusement (i.e. arcade) Division revenues in 1999)
2. Overleveraging of assets in order to launch the Dreamcast
3. Inability to hold out financially until he Dreamcast could turn the corner of profitability
His sources are all listed in the video description. So long as they are all accurate, then I think his explanation of events is very convincing.
The video itself contains lots of interesting info and is well worth 20 minutes of your time, even if you feel you have already heard everything there is to know about the story of the Dreamcast. Still, I've summarised some of the most interesting parts below:
1. He doesn't believe that piracy killed the Dreamcast
His main argument against this often cited reason is the game attach rate as compared to other consoles of the time. As you can see, Dreamcast falls somewhere in the middle in this regard, doing better than the PS2 at a similar point in its lifetime cycle, but worse than others:
2. Ruinously expensive hardware/software development, combined with too low of a US launch price, was a greater factor:
He thinks that the story of Bernie Stolar setting the price at $199 against the wishes of SoJ probably has some truth in it, and resulted in every US Dreamcast having to sell 8 games to break even (as opposed to 5 at the originally planned price of $249). According to his sources, the machine was still costing as much as $250-285 per unit to manufacture two years after launch.
3. EA refusing to publish their games on the system wasn't such a big deal
He says that sales for NFL2K on Dreamcast were similar to Madden 2001 on the PS1 (901k for the former and 990k for the later) and much higher than the 661k that Madden 2001 sold on PS2. Combine that with the high critical and user acclaim that the NFL2K series was getting, and the whole EA thing doesn't seem likely to have had as big an effect as is sometimes claimed.
He thinks the main reasons as to why Sega had to prematurely retire the Dreamcast and exit from the console market are as follows:
1. Decline in other revenue streams (primarily the premature killing of the Saturn in the US by Bernie "The Saturn is not our future" Stolar, which was largely responsible for a 59% decline in Consumer Division (i.e console hardware/software) sales from 1997-1999, plus a 26% fall in Amusement (i.e. arcade) Division revenues in 1999)
2. Overleveraging of assets in order to launch the Dreamcast
3. Inability to hold out financially until he Dreamcast could turn the corner of profitability
His sources are all listed in the video description. So long as they are all accurate, then I think his explanation of events is very convincing.
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