Dreamcast’s Last Hope

We are so proud of Sega, throwing a monkey wrench into the pending console war. Just when all the industry pundits had concluded that Sony was going to be the undisputed winner in this battle, Sega comes up with the proverbial rabbit out of what everyone thought was an empty hat.

Last week Sega announced that it would give a $200 rebate on a Dreamcast, plus a Dreamcast keyboard, to anyone who signed up for its soon-to-be-launched Internet Service Provider for a two-year contract. Essentially, if you get the ISP, you can have a Dreamcast with a keyboard for free. Sega, probably more out of necessity that good will, is making the offer to anyone in the U.S., even those that already own a Dreamcast.

The target market for this proposal however, is not console gamers. Sega wants to rope in PC gamers and those that would not normally consider buying a console system. This move has made some hardcore console gamers livid; the head of Ken of Ken’s Corner reportedly spun several times when he saw the news flash on this. What Sega is doing is letting more people into the console club. Eventually this may mean less Quake and more kids games, much like we are seeing in the PC market.

But Sega’s decision is ingenious. The bosses at Sega have to know that if they try to go toe to toe with Sony, they are going to lose when the PlayStation 2 comes out in the U.S. market. Sales of Dreamcast are going very well, but Sony was able to nearly match Sega’s hard fought numbers with Japan-only sales in just three days.

So Sega has found a way to give the Dreamcast away for free, and still make money on the backside. Think about a typical consumer who does not yet have e-mail access. They can now get an ISP for the normal ISP cost, and suddenly have e-mail, multiplayer functions and a next-generation console system for no extra cost. Seems like a pretty attractive deal, considering to get an ISP today currently requires a comparatively expensive computer. Throw in a keyboard, and the Dreamcast can become the center of not only the family entertainment system, but also a valuable tool to connect to the rest of the world.

And I think this offer will also be attractive to PC users. Most PC users love their computers as game platforms. Console platforms, especially in the areas of real-time strategy and role-playing, normally fall well short of most PC offerings. Likewise, many PC users would never think of buying a console system, except in those rare cases where a console-specific game might tempt those with large amounts of disposable income to get a system to play it on. But the idea of an extra ISP that comes with a free Dreamcast will lure many over. Why not, when you can get the console for free just for having an ISP?

This will also allow Sega to concentrate on true multiplayer games, and control bandwidth and usage issues through their own servers. This will give them a tremendous advantage over console systems that don’t employ a similar system.

Will this move make Sega the dominant player in the market again? Who knows? A lot could depend on how fast they can actually get the program up and running, and on the reliability of the ISP they create. But from their initial announcement, it certainly seems like the games will be there, which is always a factor in console industry battles.

Sega knows it will lose on the current battlefield, so they are changing the battlefield. If Sony and soon-to-be-distant-third Nintendo can’t counter this move, and do it quickly, Dreamcast could well reign supreme after all. And you have to admire Sega’s ingenuity.

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