Sega pins its Dreamcast hopes on Windows CE

Sega Enterprises announced this week that it has already accepted 200,000 preorders for its upcoming Dreamcast videogame console, a 128-bit system with 3D graphics that is largely based around Microsoft's Windows CE operating system. Sega, which once dominated the market with its 16-bit Genesis system, fell behind Sony and Nintendo when its follow-up Saturn system bombed. But the hype surrounding Dreamcast, which will debut in the U.S. this fall, suggests that the company has a winner on its hands.

Today's market is dominated by the Sony Playstation, an admittedly obsolete system that some commands some 60% of the market. Nintendo's superior Nintendo 64 system, which uses older cartridge-based technology, is second with 30%. While its unlikely that any one company will dominate the market in the future, both Sony and Nintendo also have strong contenders coming in the years ahead. For Sega to succeed, it simply needs to grab more than its current share of the market, a weak 5%. And it has a year's head start: Sony's Playstation II won't arrive until next fall.

"What Sega has to prove with Dreamcast is that we can have success in the U.S. market," says Charles Bellfield, director of marketing for Sega of America. "The Saturn launch here was a failure, and now we need to show that we've learned from our past."

The inclusion of Windows CE in the Dreamcast will play no small part in its success in the United States. With powerful 3D graphics and a custom version of DirectX, developers who are already familiar with the PC will have little problem porting titles to the Sega console. This ensures that Dreamcast will eventually have a full stable of titles that are far more interactive and involving than the typical console title. And with that, the potential market for Dreamcast could easily move upscale into Internet set-top box territory. A $200 Internet box that plays Quake on a 32-inch TV? Sign me up