system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: Why did the Dreamcast fail?
gpt
The Dreamcast's performance was underwhelming. The main reason: it launched in the West only six months before the PlayStation 2. When the Dreamcast launch, marketing for and buzz around the PS2 was massive. The PS2 would have far better graphics than the Dreamcast, and had a range of extremely high-profile desirable titles in the works -- Tomb Raider, Metal Gear Solid, Final Fantasy, Silent Hill, Crash Bandicoot, FIFA, NFL. The marketing centred on the technological power of it, with tons of tech demos, and Sony pursued a more adult image -- they ran a bunch of disturbing surrealist commercials and emphasised games like Metal Gear and Silent Hill that appealed to teens and young adults a lot more than the relatively childish image Sega was promoting (based almost entirely around Sonic the Hedgehog). Even the machine was a sleek black thing with jagged edges, next to the beige plasticky-looking Dreamcast.

What was more, everyone was pumped about the PS2 being built around DVD technology. This was 1999, DVDs were pretty new and the players were expensive, but everyone knew it was the next big thing. The PS2 launched as one of the more affordable DVD players on the market, *and* it doubled as the most advanced console ever released, with a bunch of the most desirable franchises. (Sony sold the consoles at a loss; they planned to make money from people buying games, and also had a strong interest in promoting the DVD format, which would be profitable for the film arm of the company.) Games on DVDs seemed truly next-gen -- a DVD could hold as much as *twelve* CDs! -- so the fact that the Dreamcast had CDs or 1 GB discs compared to the PS2's DVDs/8.5 GB discs really made it seem old hat.

In the West, the Dreamcast was just destroyed by the hype for the PS2.

Plus there's the background: the 32x, Sega CD, and Sega Saturn had all been huge failures. Sega hadn't launched a successful console in 11 years, which meant that a lot of people had almost forgotten about them, and had switched to the PlayStation. Sega's key franchise, Sonic, hadn't had a hit in 6 years, and in that 6 years a ton of new franchises had appeared (Metal Gear, Tomb Raider, Crash Bandicoot, Pokemon), so that many had stopped caring. So Sega wasn't in a great position anyway. Remember that Sonic targeted the under-15s, to whom 6 years might as well be eternity.

The Dreamcast launched much earlier in Japan, and it did better in Japan than it did elsewhere, but it still struggled; it launched without anything of interest and many perceived that it took way too long for the interesting titles to come out. It was competing there with the N64 and PS1; although the Dreamcast was technically much superior, it really struggled because those two consoles were at the time releasing a barrage of entries from super-popular franchises to rave reviews -- while the Dreamcast launch was being marketed, people saw its rivals release *Ocarina of Time*, *Tomb Raider 2*, *Crash Bandicoot 3*, *Resident Evil*, *Metal Gear Solid*, *Gran Turismo*, *Starcraft*, *Xenogears*, *F-Zero X*, *Resident Evil 2*, *Final Fantasy 7*, *Pokemon Silver*, *Mario Kart 64*, *GoldenEye*, *Symphony of the Night*, all of which are commonly ranked among the best or most successful games of all time. The Dreamcast launched with four games, only one of which got positive reviews. By the time its lineup was fleshed out, people were hyped for the PS2.

After all of this, Sega could still have stayed in business, could have released another console. But a large part of the management were tired of the hardware business, and had wanted Sega to become a software developer for Nintendo/Sony for a long time. There was a debate between the pro-hardware and anti-hardware factions in management as far back as '94. The spectacular failure of the Dreamcast in the West didn't drive Sega into despair, it just gave the anti-hardware faction the justification it needed to reorganise the company. Their pitch was along the lines of "We failed with the 32x, failed with the SegaCD, failed with the Saturn, and failed with the Dreamcast. We COULD gamble on yet another system for launch in 2005, trying to recapture what we last did in 1989, and just endure the next 5 years... or we could start writing software for the 30 million PS2s out there *today* and guarantee steady profits", and few could argue.

# bulletpoints:
- By the time the Dreamcast launched outside Japan, the PS2 was almost ready. The PS2 was much stronger graphically, used much larger discs, and doubled as a cheap DVD player when DVD was just becoming big, which made everyone want it.
- Sony marketed with a much cooler and more adult image and made Sega look juvenile in comparison. They captured the teen and adult markets almost completely (and Nintendo would go on to capture the under-16 market).
- Sony had all the cool new franchises like Silent Hill, Resident Evil, Metal Gear, Crash Bandicoot, Final Fantasy, Gran Turismo, Tomb Raider, etc on the way. Sega only had Sonic.
- In Japan, the Dreamcast had an anemic lineup, which only became impressive by the time the PS2 was launching with an even better one.