It was released in 1999 long before other similar consoles were and enjoyed brisk sales its first season. It was an attempt to break into the console market with a next generation system designed to supersede Sony's PlayStation and Nintendo's N64, but mainly because of doubt (some Sega add-ons and consoles have been less than successful, such as the 32X and Sega CD) and anticipation of the Nintendo GameCube, Sony PlayStation 2, and Microsoft Xbox, it lost a lot of steam and Sega began to lose money once again. In January 2001, Sega announced that the Dreamcast was to be discontinued by the end of the year but that new games would still be made. The failure of the Dreamcast was the final blow that took Sega out of the home console business.
Dreamcast used a proprietary format called GD-ROM for storing games in order to foil software pirates, a strategy that ultimately backfired when the first run of discs had a high rate of defects, and pirates managed to pirate the games anyway (in some cases the pirated games were released before the legitimate versions!). Sega largely had themselves to blame for the high levels of Dreamcast piracy - their use of the GD-ROM format was completely undermined by the console's support for the Mil-CD format, which allowed the console to boot from a standard CD-R. Mil-CD support was removed from the final Dreamcast revisions toward the end of the console's life.
Microsoft cooperated with Sega hoping to promote its Windows CE operating system for video games, but Windows CE for the Dreamcast showed very limited capabilities when compared to the Dreamcast's native operating system. The libraries that Sega offered gave room for much more performance, but they were sometimes more difficult to utilize when porting over existing PC applications.
The Dreamcast has a modest hacking enthusiast community. The availability of Windows CE software development kits on the Internet, as well as ports of Linux and NetBSD operating systems to the Dreamcast gave programmers a selection of familiar development tools to work with, even though they do not really support the high speed graphics. A home brew minimal operating system called Kallistios offers support for most hardware, while not offering multi-tasking, which is superfluous for games. Many emulators and other tools (mp3, DivX players and image viewers) have been ported to or written for the console, taking advantage of the relative ease with which a home user can write a CD which is bootable by an unmodified dreamcast.
Sega released a board, using the same technology as the Dreamcast, called Sega NAOMI for use in arcade games.
Though the Dreamcast was officially discontinued in early 2001, commercial games were still developed for it and were released afterwards (though mostly only in Japan). Sega will release one final game on February 24, 2004 called Puyo Puyo Fever. Also a small number of 3rd party games are still being released.
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