Sega announced that Sonic Adventure, the next game starring company mascot Sonic the Hedgehog, would arrive in time for the Dreamcast's launch and promoted the game with a large-scale public demonstration at the Tokyo Kokusai Forum Hall.
As more than half of its limited stock had been pre-ordered, Sega stopped pre-orders in Japan.
The Dreamcast was also the first console to include a built-in modem for Internet support and online play.
After a change in leadership, Sega discontinued the Dreamcast on March 31, 2001, withdrawing from the console business and restructuring itself as a third-party publisher. Although the Dreamcast had a short lifespan and limited third-party support, reviewers have considered the console ahead of its time.
Its library contains many games considered creative and innovative, including Crazy Taxi, Jet Set Radio and Shenmue, as well as high-quality ports from Sega's NAOMI arcade system board.
Because the Saturn had tarnished Sega's reputation, the company planned to remove its name from the console entirely and establish a new gaming brand similar to Sony's Play Station, but Irimajiri's management team ultimately decided to retain Sega's logo on the Dreamcast's exterior.
Sega spent US$50–80 million on hardware development, $150–200 million on software development, and $300 million on worldwide promotion—a sum which Irimajiri, a former Honda executive, humorously compared to the investments required to design new automobiles.
Released in Japan to a subdued reception, the Dreamcast enjoyed a successful U. launch backed by a large marketing campaign, but interest in the system steadily declined as Sony built hype for the upcoming Play Station 2.
Sales did not meet Sega's expectations despite several price cuts, and the company continued to incur significant financial losses.
Neither price cuts nor high-profile games were proving helpful to the Saturn's success.
As early as 1995, reports surfaced that Sega would collaborate with Lockheed Martin, The 3DO Company, Matsushita, or Alliance Semiconductor to create a new graphics processing unit, which conflicting accounts said would be used for a 64-bit "Saturn 2" or an add-on peripheral.
Initially known as "Whitebelt", This angered Sega of Japan executives, who eventually decided to use the Dural chipset and cut ties with 3dfx.
According to former Sega of America vice president of communications and former NEC brand manager Charles Bellfield, presentations of games using the NEC solution showcased the performance and low cost delivered by the SH-4 and Power VR architecture.
S., in part due to a massive advertising campaign and strong third-party support engendered by Sony's excellent development tools and liberal licensing fee.