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The Dreamcast is a home video game console released by Sega on November 27, 1998, in Japan; September 9, 1999, in North America; and October 14, 1999, in Europe. It was the first sixth-generation video game console, preceding Sony's PlayStation 2, Nintendo's GameCube, and Microsoft's Xbox. The Dreamcast was Sega's final console; its 2001 discontinuation ended the company's eighteen years in the console market. An internal Sega team led by Hideki Sato began developing the Dreamcast in 1997. In contrast to the expensive hardware of the unsuccessful Saturn, the Dreamcast was designed to reduce costs with off-the-shelf components, including a Hitachi SH-4 CPU and an NEC PowerVR2 GPU. Sega used the GD-ROM media format to avoid the expenses of DVD-ROM technology. Developers were able to include a custom version of the Windows CE operating system on game discs to make porting PC games easy, and Sega's NAOMI arcade system board allowed nearly identical conversions of arcade games. The Dreamcast was the first console to include a built-in modular modem for internet access and online play. Though its Japanese release was beset by supply problems, the Dreamcast had a successful US launch backed by a large marketing campaign. However, sales steadily declined as Sony built anticipation for the PlayStation 2. Dreamcast sales did not meet Sega's expectations, and attempts to renew interest through price cuts caused significant financial losses. After a change in leadership, Sega discontinued the Dreamcast on March 31, 2001, withdrew from the console business, and restructured itself as a third-party developer. 9.13 million Dreamcast units were sold worldwide. Its bestselling game, Sonic Adventure (1998)—the first 3D game in Sega's Sonic the Hedgehog series—sold 2.5 million copies. The Dreamcast's commercial failure has been attributed to a variety of factors, including competition from the PlayStation 2, limited third-party support, and the earlier failures of the 32X and Saturn having tarnished Sega's reputation.

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