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Despite its short lifespan and limited third-party support, reviewers have celebrated the Dreamcast as one of the greatest consoles. It is considered ahead of its time for pioneering concepts such as online play and downloadable content. Many Dreamcast games are regarded as innovative, including Sonic Adventure, Crazy Taxi (1999), Shenmue (1999), Jet Set Radio (2000), Phantasy Star Online (2000), and high-quality ports from Sega's NAOMI arcade system board.
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Before the Dreamcast's release, Sega was dealt a blow when EA, the largest third-party video game publisher, announced it would not develop games for it. EA's chief creative officer Bing Gordon said that Sega had "flip-flopped" on the hardware configuration, that EA developers did not want to work on it, and that Sega "was not acting like a competent hardware company". Gordon also said that Sega could not afford to give them the "kind of license that EA has had over the last five years". According to Stolar, the EA president, Larry Probst, wanted exclusive rights as the only sports brand on Dreamcast, which Stolar could not accept due to Sega's recent US$10 million purchase of the sports game developer Visual Concepts. While EA's Madden NFL series had established brand power, Stolar regarded Visual Concepts' NFL 2K as superior and would provide "a breakthrough experience" to launch the Dreamcast. While the Dreamcast would have none of EA's popular sports games, "Sega Sports" games developed mainly by Visual Concepts helped to fill that void.
The Dreamcast launched in North America on September 9, 1999, at a price of $199, which Sega's marketing dubbed "9/9/99 for $199". Eighteen launch games were available in the US Sega set a new sales record by selling more than 225,132 Dreamcast units in 24 hours, earning $98.4 million in what Moore called "the biggest 24 hours in entertainment retail history". Within two weeks, US Dreamcast sales exceeded 500,000. By Christmas, Sega held 31 percent of the North American video game market share. Significant launch games included Sonic Adventure, the arcade fighting game Soulcalibur, and Visual Concepts' football simulation NFL 2K. On November 4, Sega announced it had sold over one million Dreamcast units. The launch was marred by a glitch at one of Sega's manufacturing plants, which produced defective GD-ROMs.
Through the regional distributor Ozisoft, the Dreamcast went on sale in Australia and New Zealand on November 30, 1999, at a price of A$499. The launch was planned for September, but was delayed due to problems with Internet compatibility and launch game availability, then delayed again from the revised date of October 25 for various reasons.[b] There were severe problems at launch; besides a severe shortage of the consoles, only six of the thirty planned launch games were available for purchase on day one with no first-party software included, and additional peripherals were not available in stores.
The Ozisoft representative Steve O'Leary, in a statement released the day of launch, explained that the Australian Customs Service had impounded virtually all the supplied launch software, including demo discs, due to insufficient labeling of their country of origin; Ozisoft had received them only two days before launch, resulting in few games that were catalogued and prepared for shipment in time. O'Leary also said that the Dreamcast's high demand in other markets had reduced the number of peripherals allotted to the region. Further complicating matters was the lack of an internet disc due to localization problems, and delays in securing an ISP contract, which was done through Telstra the day before launch. The online component was not ready until March 2000, at which point Ozisoft sent the necessary software to users who had sent in a filled-out reply paid card included with the console. The poor launch, combined with a lack of advertising and a high price point, produced lackluster sales in Australia; two large retail chains reported a combined total of 13 console sales over the first few days after launch.
Moore became the president and chief operating officer of Sega of America on May 8, 2000. He and Sega's developers focused on the US market to prepare for the upcoming launch of the PS2. To that end, Sega of America launched its own internet service provider, Sega.com, led by CEO Brad Huang. On September 7, 2000, Sega.com launched SegaNet, the Dreamcast's internet gaming service, at a subscription price of $21.95 per month. Although Sega had previously released only one Dreamcast game in the US that featured online multiplayer, ChuChu Rocket!, the launch of SegaNet combined with the release of NFL 2K1, with a robust online component, was intended to increase demand for the Dreamcast in the US market. The service later supported games including Bomberman Online, Quake III Arena, and Unreal Tournament. The September 7 launch coincided with a new advertising campaign to promote SegaNet, including advertising on the MTV Video Music Awards that day, which Sega sponsored for the second consecutive year. Sega employed aggressive pricing strategies around online gaming; in Japan, every Dreamcast sold included a free year of internet access, which Okawa personally paid for. Prior to the launch of SegaNet, Sega had already offered a $200 rebate to any Dreamcast owner who purchased two years of internet access from Sega.com. To increase SegaNet's appeal in the US, Sega dropped the price of the Dreamcast to $149 (compared to the PS2's US launch price of $299) and offered a rebate for the full $149 price of a Dreamcast, and a free Dreamcast keyboard, with every 18-month SegaNet subscription.
Nevertheless, on January 31, 2001, Sega announced the discontinuation of the Dreamcast after March 31 and the restructuring of the company as a "platform-agnostic" third-party developer. Sega also announced a price reduction to $99 to eliminate its unsold inventory, which was estimated at 930,000 units as of April 2001. After a further reduction to $79, the Dreamcast was cleared out of stores at $49.95. The final Dreamcast unit manufactured was autographed by the heads of all nine of Sega's internal game development studios, plus the heads of Visual Concepts and Sega's sound studio Wave Master, and given away with 55 first-party Dreamcast games through a competition organized by GamePro. Okawa, who had previously loaned Sega $500 million in 1999, died on March 16, 2001; shortly before his death, he forgave Sega's debts to him and returned his $695 million worth of Sega and CSK stock, helping Sega survive the transition to third-party development. As part of this restructuring, nearly one third of Sega's Tokyo workforce was laid off in 2001.
Sega also produced the Dreameye, a digital camera that could be connected to the Dreamcast and used to exchange pictures and participate in video chat over the internet. Sega hoped developers would use the Dreameye for future software, as some later did with Sony's similar EyeToy peripheral. In addition, Sega investigated systems that would have allowed users to make telephone calls with the Dreamcast, and discussed with Motorola the development of an internet-enabled cell phone that would use technology from the console to enable quick downloads of games and other data. 350c69d7ab