Sega's new console aims to capture young game players with new
Sonic the Hedgehog whips through gold rings in a blue blur - so fast, it's tough for the two boys to keep up. "This is the fastest video game I've ever played," says 12-year-old Adam Cochran.
That comment is music to the ears of the beleaguered former video giant, Sega, which in recent years all but dropped out of the home video-game competition. The company had cornered nearly half the market as recently as 1993, but that was an eternity ago in technology time.
Now Sega hopes to regain its former glory with yesterday's launch of its Dreamcast video game system, the most advanced video-game technology available.
"Dreamcast is the first of the 128-bit systems in the market," says Charles Bellfield, Sega's director of marketing. What that means for the consumer, says the Sega executive, is more than 15 times the speed of existing systems, such as Sony PlayStation and Nintendo 64.
Perhaps most important, Dreamcast includes a built-in modem that allows players to browse the Web, download software, and join online games, as well as use e-mail.
Dreamcast's target audience of young boys is flocking to the new technology - Sega took in more than 300,000 pre-orders before the Sept. 9 debut date. But the industry players themselves are very big boys indeed. Overall, the video industry is poised to earn more than $7 billion in 1999. That would exceed the $6.7 billion take of the movie industry in 1998.
The new 128-bit console already has cost Sega more than $100 million to bring to market. Currently, two dominant firms - Sony with its PlayStation and Nintendo with N64 - virtually own the marketplace for console video players.
One in 6 American households has a PlayStation. Revenues from Nintendo's wildly popular Pokmon video games alone have exceeded $200 million so far this year. To undercut the introduction of Dreamcast, which retails at $199, Sony just announced a price drop on its signature unit to $99.
Sega's Mr. Bellfield is unfazed. "If you want to pay $99 for a doorstop, fine," he says. "That's old technology, five years old."
But analysts remain wary. "It's not enough that the system itself is way ahead," points out David Tobin at Boston-based Par Capital Management. "Right now, Sega has none of the market."
While the company's stock may have risen more than 20 percent in anticipation of the new console, what really matters are the quality of the games and customer satisfaction, points out Chris Turner, who reviews video games for the technology magazine Shift. "Sometimes sheer speed is unnecessary," he says. "Content is what counts."
Lessons learned when Dreamcast was introduced in Japan last year have shaped its American debut. Chief among them: More games are now available, 18 in all. That's "a very high number," Mr. Tobin says.
Whether Dreamcast takes over the market or simply finds a niche in a competitive environment, its presence serves a purpose: Competition pushes the creative edge of an industry and besides, points out Tobin, "You wouldn't want one source of technology because they could wildly overcharge, and you'd have no recourse."
(c) Copyright 1999. The Christian Science Publishing Society