Sega will stop manufacturing Dreamcast at the end of March, 2001, and has announced games which will be seen on Sony and Nintendo platforms. The shutting down of Dreamcast will generate $689 million in extraordinary losses.
Analysts have applauded the end of the 128-bit Dreamcast as a crucial step toward profitability for a company facing four straight years of losses, where its hardware division earned 23 percent of total sales and contributed to 95 percent of its total operating loss.
Announced also is a price cut in the Dreamcast consoles to $99.00 in an effort to clear as much of the present stock as possible. Sega is still committed to the platform for the rest of this year, but have announced software for Playstation II (Space Channel 5, Virtua Fighter 4, Sakura Wars), Nintendo (Puyo Puyo, Sonic the Hedgehog Advance and Chu Chu Rocket) and talks with XBox on future releases.
In a report by
Reuters, Sega will trim its workforce to the minimum level needed for operating a content business, and would consider cutting back or divesting its European and American operations as well as affiliated enterprises.
It said it expects to sell nine million software titles this business year and boost that by 50 percent next by selling games designed for other machines and plans to develop by the end of this year, game content for Palm Inc.'s handheld computers, which last year enjoyed a dominant share of more than 70 percent in the fast-growing U.S. hand-held computer market.
