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I have heard rumor that sega dropped out of the system manufacturing to collect enough money to release a system once again after they make a lot of money making games on several platforms. Might be a plausible idea.......get people hooked on sega games and then have those franchises exclusively on the sega. This link is all I could find back in 2005. Pretty impresive specs considering they would be on par if not excell graphics wise with the PS3. read this link.

 http://www.hardwareanalysis.com/content/topic/42567/

Sega DreamCast 2 is expected to be released late 2006. The new machine will feature an 4 AMD processors based around the AMD64 Dual Core architecture & ATI's newer R580 graphic's core. The processor is expected to be based on the 65nm, SOI, copper interconnect process and a highly scalable HTT giving teraflops of floating point performance and low ultra power usage. The system will also house a built in 120GB hard drive with SATA2 technology. ATI's on-board graphics are based around a customized R580 GPU, offering around 80 times the performance of the Graphics Performance in the late DreamCast. Its chipset is also based on a modified version of ATI's RADEON® XPRESS 200 Series.

Does anyone have any more information on this??? Please post, as Sega was the Healthyiest competitor for Nintendo(excluding Xbox/Sony)