The Dreamcast Legacy

The Dreamcast is a bit of an odd beast. Coming on the heels of the unpopular Sega Saturn, the Dreamcast was meant to be a simple console built with off-the-shelf parts and released in late 1998. The Nintendo 64 was already tough competition (1996). Ultimately, the Dreamcast fell out of the public eye in the early 2000s as the Playstation 2, Xbox, and Gamecube were all released with incredible fanfare just a few years later. In some sense, Sega’s last console is a footnote in gaming history.

But despite not achieving the success that Sega hoped for, the Dreamcast has formed a small cult following, because as we know, nothing builds a cult-like following like an untimely demise. Since its release, it has gained a reputation for being ahead of its time. It was the first console to include a modem for network play and an easy storage solution for transferring game data between consoles via the VMUs that docked in the controllers. It had innovative and classic games such as Crazy TaxiJet Set RadioPhantasy Star Online, and Shenmue. Microsoft even released a version of Windows CE with DirectX allowing developers to port PC games to the console quickly.

We see our fair share of console hacks here on Hackaday, but what is the ultimate legacy of the Dreamcast? How did it come to be? What happened to it, and why did so much of Sega’s hopes ride on it?

Opportunity in the Video Game Crash of 1983

The Dreamcast was Sega’s last actual console, marking the end of an eighteen-year-long march of Sega home consoles. But why was this the last console? Why did so much of Sega’s hopes ride on this one piece of hardware? To understand that, we need to go back to the console wars. An excellent resource for this is the book Console Wars by Blake Harris, which tells the story (with some artistic liberties) of the former Mattel VP Tom Kalinske and his journey as CEO of Sega of America during the Saturn and the Genesis. The video game crash of 1983 in America wiped out US companies like Atari, leaving the door open for the likes of Japanese companies such as Nintendo and Sega.

Before 1979, games were primarily made by companies exclusively for their console. This all changed with Activision, a company formed by former Atari employees upset that their names wouldn’t appear in the credits of a game. After that, third-party developers exploded out of nowhere, and by 1983 everyone was trying to get in on the gold rush.

The market became confused and saturated to the point that people stopped buying games and retailers stopped carrying them. Even the more prominent third-party game developers often had the same game for different platforms with massive differences in quality and graphics. Games with the same name by the same developer varying drastically led to customer confusion. The American video game market was a mess.

Enter Nintendo. Nintendo was determined not to make the same mistakes and sought to reel in third-party developers. They established firm contracts that prevented developers from moving their games to other platforms and ensuring each game released on the console met their quality standard. This led to tremendous success, quickly locking most console developers into tight contracts and commanding almost the entire US console market by 1986.

So when Sega tried to market their Genesis system in the US (1989), most developers had exclusive contracts with Nintendo. Tom Kalinske of Sega USA set out to create a new title to re-launch the Genesis, called “Sonic the Hedgehog.” Combined with clever marketing, seeking out new developers who previously didn’t make console games, and a cut in the price for the console, Sega went on to out-sell the NES (released 1985), breaking Nintendo’s complete dominance of the home video game console market in the US at the time. Even when the SNES debuted to the international market (in 1991), the Sega Genesis out-sold it two-to-one in 1991. By January 1992, Sega controlled 62% of the home console market — the first time Nintendo was not the dominant leader since 1985.

So Sega of the early 1990s was at this incredible high, a literal market leader with a promising future. However, cracks were beginning to show. Sega of Japan wanted to move to the new Saturn console in the summer of 1995, despite complaints from Sega of America that the current Genesis was still selling just fine. The console launched to high praise. But, ultimately, underwhelming machine performance, a small game library, and a problematic launch schedule led to the Saturn being less than the stellar success Sega needed.

A Last Hope: A Dreamcast

Just four years after the Saturn was released, they released the Dreamcast in 1998. Market leaders just three years ago, they were now the third-place company. In addition, a price war with Sony’s PlayStation had caused Sega to lower the price on the Saturn to match it, despite the Saturn having much more expensive custom components.

This drained Sega’s coffers, which meant that the Dreamcast would have to be designed around off-the-shelf hardware. The decision to include a modem (at an estimated $15 extra cost to the BOM) becomes all the more interesting in this light.

Despite a disappointing launch in Japan, the extra time leading up to the North American launch allowed Sega of America to develop more games for the Dreamcast. Sega smoothed retail relations, and retailers started stocking more inventory in hopes of a successful launch. The Dreamcast sold over 225,000 units in under 24 hours and over 500,000 over the next few weeks. Europe showed similar sales figures. By Christmas of 1999, Sega had climbed to 31% of the North American market share. It seemed as though bright days were ahead for Sega. The dark shadow of the Saturn had passed, and they would regain their standing. But the console market moved faster.

Sony announced the PlayStation 2, Nintendo began to hype their fantastic next-gen console, and Microsoft announced their intention to join the console wars. Electronic Arts, a long-standing Sega partner, announced it wouldn’t develop games for the Dreamcast. As a result, Sega had to cut R&D budgets and shut down some of the online servers that powered the Dreamcast’s online experience. On January 31st, 2001, Sega declared itself to be a software-only shop and cut the price of the Dreamcast to sell off any remaining inventory. Game releases continued until 2002, and they continued to repair consoles until 2007. The innovative dial-up SegaNet, an internet provider, geared towards Dreamcast systems, shut its doors in 2003.

The Legacy

So, where does that leave the Dreamcast? It is a buried relic of the past, held aloft by the promises of what it could have been: powerful hardware and an online gaming experience that never found the widespread adoption that consoles today enjoy. Ultimately, it just couldn’t compete with the next generation of consoles: Xbox, PS2, and Gamecube.

While most of the hacking love goes to the more popular consoles, we still see some exciting and unique hacks on the Dreamcast here at Hackaday. The RAM has been augmented to 32MB, and folks have brought the online experience back with a Raspberry Pi. There are still a few Dreamcast fans out there, and they’re going to keep hacking.

[Editor’s note: we corrected a few things about the timeline that could be confusing to readers].

48 thoughts on “The Dreamcast Legacy

  1. Sega had this weird problem with the Genesis and Saturn where their console could succeed in Japan or the US but not both. Of course the Genesis having any chance at all in the US probably stems from that insane decision from their competition to spend years redesigning the Turbografx 16 instead of just rebadging the PC Engine.

    1. I’m fairly sure that the biggest reason why Sega wasn’t too popular in Japan was simply because it took them a long time to develop their own in-house software talent. Although most games for their systems before the Megadrive/Genesis said they were “by Sega”, the truth is that most of them were contracted out to other companies like Micronet or Compile. Not only did Nintendo have top-notch talent in-house, their success brought other talented developers to make games for their system. That’s reflected in the US story too – the Genesis didn’t sell until they decided to bundle their best game alongside it to show that they had fun stuff too.

      1. One big boost Sony had was from making the Playstation 2 able to play DVDs. Since DVD movies were still very new, many people didn’t yet have a DVD player so the two in one deal of the PS2 (and then the XBox) made the Sony a more attractive deal, especially in parts of Japan where homes and apartments are quite small.

        Sega didn’t have the funds to buy DVD mechanisms or pay the per-device DVD license fee, so they developed the GD-ROM, the Gigabyte Disc Read Only Memory, to be able to make games that wouldn’t fit onto a CD-ROM and also make it impossible for anyone to be able to use a normal PC disc burner to make exact copies.

        But Sega left an unintentional back door for game copying. There was code left in the BIOS for games on CD-ROM, and they didn’t design the mechanism to be incapable of reading CD-R. So someone figured out how to make a boot CD and do hacks to stream GD-ROM data to a PC via the Dreamcast’s serial port. With the game data in hand, it was possible to delete, further compress, and edit stuff to cram a game onto a CD-R and have it run on an unmodified console. Since many games didn’t use the full GD-ROM capacity, they were fairly easy to ‘compact’ to a CD-ROM ISO image.

        Within a short time most of the Dreamcast’s cames had been pirated and ISOs were available online.

  2. The timeline is wrong in the first paragraph. The dreamcast was the first to be released in the generation that also contains PlayStation 2, Gamecube and Xbox. Previous generation contains (atleast) PlayStation, Saturn and Nintendo 64.

    1. To be clear, the confusion is partly because the Dreamcast was *very* early, since they were rushing. The PS1 was released in late 94, same as the Saturn, but the PS2 was released in early 2000, versus the Dreamcast’s late 98. The Saturn was a total failure – they had to get a new console out quickly.

      Hence the silliness of generation grouping, especially if you realize the N64 was very late (because the PlayStation was developed as an SNES add-on): N64 (mid-96), Dreamcast (late 98), PS2 (early 2000), GameCube (late 2001), Xbox (early 2002) – all release dates in Japan.

      The Dreamcast didn’t compete with the PS2/GameCube/Xbox. It was already discontinued before the latter 2 ever hit the market. It competed with the N64 and PS2.

      1. The dc didn’t compete with the ps2 in the uk… it competed with the ps2 media hype, the ps2 didn’t launch in the uk until November 2000, it would be just around 3 months later the dc would be discontinued, so in real terms the ps2 only came in at the dcs death throes. Not the only inaccuracy in your article. As to the Saturn failure, well, possibly true, but in the uk the n64 was a horrible failure as well, outside of really big games like Goldeneye and Mario, it struggled to shift anything and by the end of the Saturns life, the n64 was dead in the water as well. I was working in retail at the time and no one wanted n64 games…. but folks were still buying saturn titles like HOTD and Burning Rangers.

        1. “but in the uk the n64 was a horrible failure as well,”

          I mean, that might be your experience, but sales doesn’t back it up. The Saturn sold a grand total of 1M units in the entirety of Europe (and 9.26M worldwide). The N64 sold several times that many in Europe (and 3X that total worldwide).

          The only region where the Saturn did even okay was Japan (where it sold over 50% of its total units), whereas the N64 did extremely well in the US (same) inasmuch as anyone did well outside of the PlayStation.

  3. “and ultimately the Dreamcast fell out of the public eye as the Nintendo 64 was released with incredible fanfare.”
    Did you mean the GameCube? N64 launched June 23, 1996 in Japan so it had been out several years when the Dreamcast launched. Thanks for the read!

  4. What a great console the DC is. I really enjoyed it a lot, with all that arcade perfect conversions. My favorite console of all time along with the Megadrive. The previous failures with the MegaCD, the 32X and the Saturn, along with the PS2 hype killed it before it was born, but man, every one who had one, loved it and continues loving this beautiful white machine.

    1. I don’t know about Europe, but the SegaCD was considered successful in the US and Japan. It has a fairly respectable library of interesting games for it.

      The 32X was a dumpster fire, and the Saturn was doomed in the US because Kalinske was fired as CEO and the guy who replaced him practically sabotaged the company. He’s famously quoted as saying “Saturn’s not our future” two years before the Dreamcast was to come out in the US, Osborne-effecting themselves out of the market.

      1. SegaCD was not a success in the US nor Japan. Worldwide is sold 2.15 million units.

        Kalinske wasn’t fired he left. Solar came in and was right about the Saturn, it was a dumpster fire. The issue with SEGA was honestly itself. SEGA of America and SEGA of Japan didn’t get along and didn’t agree on much. That’s why the consoles in the 90’s failed for SEGA.

      2. Sega USA had the better “road map” for hardware. They wanted to build a new console with a 3Dfx GPU, and IIRC have it backward compatible with the 16 bit cartridges. Sega Japan didn’t want that Not Invented Here stuff and what we got was the mess of addons for the old 16 bit console, the CD, the 32x etc. Then for some reason the later versions of Ye Olde 16 bit console had compatibility for the CD removed.

        What Sega needed was to have gone with an all in one console with 32x and CD as soon as possible, then end all the other hardware so there would’ve been just one console, and a requirement for an ever increasing % of 32 bit CD games from the game companies until in a couple of years all the new Sega games would be on CD, then a new, lower cost, CD only console could have been released. Perhaps with the capabilities of the Dreamcast + CD32 backwards compatibility. Some were hoping Dreamcast would play CD32 games.

    2. Absolutely agree with you. Dreamcast is still my favourite console. Some amazing, ahead of their time games. I’m getting the DC Digital board fitted for 1080p (960p) resolution so the console will live on. Let’s not forget the strange but amazingly comfortable controller, the VMU and microphone addons etc. Awesome

  5. I believe the Dreamcast was also the first console that could play burned games without mods having to be added. I know my roommate’s oldest son was able to burn games onto CD-R and pop them right into the DC with no issues, unlike the PlayStation or PS2 that required taking the console apart to solder in a mod chip.

    1. Not exactly. The early CD based consoles like TG-CD or SegaCD didn’t have any copy protection on the disks at all, since the cost of CD-Burners was so extravagant at the time piracy wasn’t a concern for them.

      1. Not necessarily, the problem was simply that burning a cd-r in *just* the right way that a DC would boot it successfully was really tricky, and depended on a bunch of things. For some people, it was easiest to obtain a single working boot CD from someone who could make them properly, and then use it to chainload an easily created but non-bootable game disk.

  6. Dreamcast is one of my favorite consoles, I still remember getting it for xmas. I got Sonic Adventure with it, but our copy had a bad boot sector (or whatever you call it on the GD-ROMS).

    In the first day or so I cracked it open so I could see why it wasn’t booting. With the case off I was able to do a disc-swap with a working game and get Sonic Adventure to boot. Eventually got a good copy but it was a learning experience.

  7. I bought mine, console and keyboard and a mouse, plus one VMU, back in the early part of the century, based on an article someplace for making a Linux kernel for it. Got far until I realized it’s strange method of attaching things made it difficult. Now? If I can get a VMU to work I might try again.

  8. I haven’t seen anyone yet mention the fact that the Dreamcast lived on *well* after the official end of the console’s lifespan, by virtue of the arcade market.

    Sega used the Dreamcast chipset, with double the main RAM and video RAM, and four times as much audio RAM, as the basis for the Naomi arcade platform. In different incarnations, it could support either ROM cartridges, or a separate GD-ROM reader.

    In addition, Sega made the Chihiro arcade platform (which was based on the Xbox) compatible with the same GD-ROM reader that could be used on the Naomi. Likewise, the Triforce arcade platform (a three-way collaboration between Nintendo, Sega and Namco, based on the GameCube chipset) had a socket compatible with the same GD-ROM reader, but I’m uncertain if any games made use of it.

    Beyond that, the Sammy Atomiswave arcade platform, which used ROM cartridges as well, was based on a more stock Dreamcast – it lacked the expanded RAM that was found on Naomi boards.

    Sega additionally used the Dreamcast’s chipset as the basis for their System SP arcade platform, which used CompactFlash cards for storing the games instead.

    Finally, some Chinese developers have essentially cloned the SH-4 and PowerVR chipset used in the Dreamcast, upclocked it, and released a small handful of arcade games as well.

    I’m legitimately shocked that in an article titled “The Dreamcast Legacy”, there’s no mention whatsoever of any of this.

    1. As a former arcade repair tech, SEGA games were some of my favoites to work on. Good documentation, easy access inside to work on, and built to last and fail gracefully. Sega’s been out of the US arcade market for years and years but you still catch a working Monkeyball here and there in the wild because that hardware is basically bombproof.

    1. Bleem! was supposed to be a universal PS1 game player for Dreamcast but that proved to be too difficult so only a three Bleem! CDs were released, for these games: Gran Turismo 2, Tekken 3, and Metal Gear Solid. One for WWF SmackDown was in the works but wasn’t released. A beta version of the Bleem! emulator was leaked then modified and integrated into ISO’s of various PS1 games to burn self booting “bleemed” games for Dreamcast.

  9. 3 things killed the Dreamcast.
    First was the PlayStation 2. This was backwards compatible with the PS1 so people who already had PS1 games or could get cheap used PS1 games were more likely to buy this than the Dreamcast. The fact that the PS2 could play DVDs out of the box (it was one of the cheapest DVD players at the time IIRC) also made it more attractive than the Dreamcast.

    Second was the lack of 3rd party developers. Hard for Sega to convince developers to develop for the Dreamcast after the failure of the Saturn.

    And third was piracy. Once the flaws in the system allowing easy piracy with no real effort appeared, no-one wanted to touch the system anymore because anything that got released would just be pirated (if not by individuals then by organized piracy rings out of Asia)

    1. Not so much.

      1st. It was really just about the DVD player that came with the PS2. Sony had the rights to make and sell DVD players, SEGA didn’t. DVD player were still pretty expensive at the time as well.

      2nd. They had some decent 3rd party developers, the only real big one was EA they lost.

      3rd. Piracy really had zero to do with it. Piracy on the console came early it didn’t really become a thing until after the DC was discontinued. Saying Piracy was a reason is just revisionist history.

      What what really was the causes you left out.

      4th. Failures of consoles before the DC. SEGA at least hardware wise made pretty much no money and was bleeding money by the time the DC came around.

      5th SEGA of America and SEGA of Japan couldn’t get along or agree on anything. Hence why the Saturn failed.

    2. Ripping a GD-ROM using slightly modded Dreamcast to allow for disc swapping between the ripping boot CD-R and the game GD-ROM was the “easy” part. A gigabyte of data streamed over the serial port of the Dreamcast took quite a while.

      The came the not at all easy part. Figuring out if there was any “fluff” that could be deleted and patched around so the game trying to access it wouldn’t cause a crash. Rippers also did things like further compressing audio and textures, and video if it was important, to pack everything down to a single 700 megabyte CD-R. IIRC some single GD-ROM games were somehow split across two CD-Rs.

      A Dreamcast game pirate had to have very good knowledge of how the console and software worked.

  10. I always found it interesting that if the Saturn and Dreamcast was ever fused into a single console – with an updated modem – that console might have been able to compete with many of the consoles out now (better SDK notwithstanding).

  11. What this article is missing is any mention of the several inventions to replace the GD-ROM drive. Since it’s using the standard ATAPI/IDE interface it’s fairly simple (for the hardware) to connect a hard drive that can store a huge amount of full GD-ROM images. Some use a boot CD-R to run the menu, others flash a modded BIOS so the GD-R is no longer required.

    Another one plugs in place of the GD-ROM drive and has a USB port under the lid. Another one connected an SD card to the serial port, but that can be too slow for games that hit the disc a lot or play video or stream CD audio for in game music.

    The first one is made in small batches and has a high 3 figure price. The guy who developed it initially got it nearly perfect then put it away for quite a while to work on other projects. The more eager people were to buy, the less inclined he was to finish it and have it manufactured. Eventually he did but added attempts to protect its software from being copied and put a high price on it. So of course it was eventually cloned and the clones work but aren’t capable of accepting later firmware updates.

    All of that is why there are all the other ways of doing without the GD-ROM drive.

  12. The Saturn was a great machine, let down by terrible management and lazy third party developers.
    Even though the machine itself was hard to program on, it was a very capable piece of hardware, when games were built from the ground up for the system, they often matched or even exceeded what the PS1 was capable of, but all too often, multi platform games were ported directly from the PlayStation and that would always cause issues.
    A similar story is true of the 32X, a powerful piece of hardware that never really got to show of its true potential and was mostly used by third party developers making a quick buck, re-releasing Mega Drive/Genesis games with minor upgrades.

    1. To be fair though, a lot of those Genesis / Mega Drive games were awesome. It had some of the best computer and arcade ports. If the 32x had willing third-party devs and games willing to port, it could have been received better (the way Playstation had ports) but I’m not so sure…

    2. “Lazy 3rd party developers” Sega only had an actually useful development kit mid 1995, and only after buying out a 3rd party R&D house. It’s not the 3rd party developers’ fault, Sega sat on their thumbs after releasing a half baked “development kit” that was just a glorified debug box at the opposite end of a SCSI cable, that’s not a proper development kit for an architecture that from the ground up was completely foreign.

  13. Not sure what this article is talking about, as the Genesis didn’t outsell the NES or the SNES. Not even close.

    Genesis – 30.75 million
    NES – 61.91 million
    SNES – 49.9 million

  14. I remember the Dreamcast. Phantasy Star Online and waiting for the modem to release in North America to use with relatively new cable internet (2-4 years new at this point). Don’t remember the modem thingie ever being released and moved onto other things.

  15. DC may have had a weak launch in Japan, but lived on well after the US and Europe. With occasional official releases through 2006, and unofficial releases into the 2010s. The GDU being so easy and cheap to releases games for, and lots of retro shops ready to stock gave small startup and one-man producers an opportunity. While some are great arcaders, most are story games, dating sims etc. (Things that would never get a license on another platform).

  16. How about mentioning the SD2GDU projects (and products). Or VGA mod (and now HDMI mods too).

    Theres a lot more hacks out there than throwing another Pi at it. (That ram uprade is impressiv tho)

  17. The UK launch of Dreamcast had 18 titles. Much more than any previous and since console. Like the PlayStation UK launch (Wipeout by Psygnosis). There were Europe-vibe titles too, Trickstyle.
    Some solid titles on Dreamcast, Vanishing Point, MSR, Headhunter.
    The Europe/UK ad campaign for the Dreamcast was lifestyle/sports oriented. No gameplay or screenshots in ads.

  18. Sega’s downfall was a windfall to me. When the console dropped to $99, I bought one and the games were generally $20 and even $10. I figured that for the price of an X-Box and 2 games, I got the Dreamcast and about 25 games… and there were a lot of good games. My kids loved the Dreamcast, particularly because they were big fans of Sonic, so we got a lot of mileage out that purchase. Just based on the Sonic Adventure, we got so much value from that console, but I really enjoyed a lot of the driving games, and I played Sonic a bit myself. Then there were rich RPGs like Grandia II and Shenmue.

    A couple years later, one of my kids, who was about 8 at the time, was looking at Sega Saturns on eBay, and somehow managed to accidentally bid on one. To this day, I do believe it was really an accident. Anyhow, we ended up winning the bid, but it wasn’t for a lot of money, so I didn’t really mind. The Saturn definitely had some good stuff, too, although I never really played it so I can’t comment in detail. To this day, he’s still a huge fan of retro gaming, and even has an Atari 2600 and a box of cartridges… which makes 12 year old me in 1977 super jealous.

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