Nikkei reports Sega Discontinuation of Dreamcast and company restructure - 1.23.01
Special thanks to K. Shimizu for notifying the News.
The Nihon Keizai Shinbun (Nikkei) -the top respected paper for Japanese investors, reported Sega's decision today to discontinue the manufacture of Dreamcast consoles after March. From April, only the remaining stock of Dreamcast consoles will be sold. Details of Sega's future business plans according to the Nikkei goes as follows.
Sega plans to cut down on red ink by discontinuing the production of home consoles which has been creating deficit, and restructure as a company based on software development.
Sega will concentrate on developing and distributing software for the home market, releasing games on other companies' consoles including rivaling companies SCEI and Nintendo. Sega currently makes 40% of their total revenue from sales in the home market. Sega plans to strengthen the development of game software with high profitability, and release games in other companies' game consoles and cellular phones. It has been estimated that Sega will be releasing 2 titles for Nintendo's Game Boy Advanced, and over 5 titles for SCEI's Playstation 2.
In addition, Sega plans to sell their graphic processing technologies to third party electronics companies, aiming to recover revenue in the home market. Sega also plans to strengthen their standpoint in the arcade market which has been bringing in surplus.
While the Nikkei announced Sega to have decided on discontinuing their Dreamcast, the Mainichi news and Reuters reports Sega's decision not to be final. The Mainichi reports that Sega will make their final decision after collating reports from the result of last year's Christmas business competition in the United States.
Sega aimed for the advantage over the internet market with their Dreamcast console; the first home console with built-in support for Internet connection. However, the Dreamcast declined in sales after their release, totaling to only 6 million sales worldwide.
Sega's total deficit currently stands at 23,600,000,000 Yen (approx. 236 million dollars), but has the possibility to undergo more deficit due to the announcement of Dreamcast's discontinuation. Sega will enter their 4th fiscal year of deficit in March.
Sega will still develop game software for the Dreamcast, with an estimate of 100 games to be released during the next year.
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Copyright Nikkei, Sega, 2001
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