Sega Hits Back With Low-Cost Fall Launch of Dreamcast

Computergram International, April 19, 1999

Sega Enterprises Ltd is planning a sub-$200 price and early fall worldwide launch for its Dreamcast console. The Japanese company is currently third placed in worldwide console sales, behind Sony Corp's original Playstation and Nintendo Co's N64 console, which lists at $129, but is now considered outmoded technology.

Sega hopes the low price and early launch give it an edge in the critical buying period up to Christmas. The new Sony Playstation looks more technically impressive on paper than the Sega machine, but will probably be significantly more expensive than Dreamcast. In interview in March (CI No 3,613), the president and COO of Sega of America, Bernard Stohlar, claimed that the Playstation is likely to cost over $400. He questioned if the American consumer would be prepared to pay that for a games console. The price performance level will be a crucial deciding factor in the sales war between the two new consoles. Nick Gibson, an analyst at Durlacher Research says that Sega's machine uses a simple, tried and tested hardware set-up, which means that Sega could possibly consider slashing its margins even further. Sony's is a machine that mostly uses 'cutting edge' technology, a new multi-processor system - which allows its spectacular graphics performance - but is unlikely, at least in the short term, to leave the company much leeway for cutting prices. However, Sony and Nintendo are both expected to cut the price of their present consoles to $99 by the Christmas period. Dreamcast will launched on September 9 in the US, priced at $199. In Europe, the machine will hit the streets on September 23, priced at 199 pounds ($320). Ten games for the new machine will available at launch.