The Dreamcast was doomed to failure. Sega just had terrible management. I've posted this before. The failure of the Dreamcast ultimately started before the release of the 32X. Sega had always been a niche hardware maker. The only success they had in the hardware arena was the Genesis. The Genesis was a success because of then Sega of America president Tom Kalinske. Sega of Japan and him got into a disagreement over the 32X. He didn't want to release it because he knew it would harm the Saturn's chances. What SoJ was thinking is beyond me. They failed in Japan despite their headstart over the Super Famicom. Kalinske had suceeded. He resigned because he didn't want to release the 32X and the fact that despite not knowing the US market, SoJ still had final say.
The whole irony of the situation is that SoJ hired Bernie Stolar as his replacement. Stolar completely botched the Sega Saturn in the US. The Saturn was Sega's most successful console in the Japanese market. Because Stolar failed so badly with the Saturn, SoJ had to speed up development of the Saturn's replacement. Retailers and Third Party developers in Japan weren't too happy with this. That is why the Dreamcast had no chance to succeed.
The Saturn debacle in the US, the early launch started it, handicapped the Dreamcast with US retailers and consumers. Some retailers that weren't a part of the Saturn early launch refused to carry Sega products. Consumers were hesitant buy the Dreamcast because the Sega CD, 32X, and Saturn were all failures. In Japan the Dreamcast had little chance because retailers and consumers were unhappy with the Saturn's lifespan being cut short. You add the two billion dollar debt Sega had to the equation and you have a recipe for disaster.
