Software sales for Dreamcast, and their constant development of peripherals that never stayed around long enough to earn profits killed Sega as a hardware manufacturer.
It seemed every time a device that was stronger released to the market, Sega had to answer with something. This led to a LOT of devices (such as Sega CD, 32X, Saturn) having very little software. This was pretty concerning to people who would spent money on them and gained Sega a bit of distrust.
Then Dreamcast released, but had a critical flaw in which a burnt cd of a Dreamcast game would work on the console. From there it was all downhill as you can see a decline in sales of actual games from launch to its eventual discontinuation. Even beyond that though, Wii U was trailing behind the Dreamcast and its 1st party software has sold drastically better. Sonic Adventure is probably the best selling title on Dreamcast with 2 and a half (roughly) million units sold. New Super Mario Bros Wii U sold twice that. Mario 3D World sold 4 Million, Mario Kart 8 sold 6.5 million, Splatoon sold 4 million, you get the point.
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