I mean, I know all of the developers were leaving them and the PS2 was outselling it like 10:1, but...

I think had they stuck with the DC, it could have possibly come in second place last gen. I mean, how could have it possibility been better finacanily to just go "Oops we're leaving the console business k bye" rather then stuck with the console for a few more years and see how things went? I imagine that sales must have dropped like a rock, I'd think they would have silently stopped making the consoles and waited until nearly all of their consoles were gone until they announced it...

Makes you wonder if the Dreamcast COULD have been successful....

They had no choice, if they kept going then they had a good chance of being bankrupt so decided to reduce their loses and focus on software which meant they don't lose out on hardware.

Exactly--they didn't have the money to keep pushing on.

I think they did, but they could make a quick buck with M$ buying big games of them. When you look at the DC numbers compared to GC and xbox, it wasnt doing that bad and most likely could have come second. But with M$ coming to the console market it was way too crowded.

They lost too much money to Sega CD, the 32X and the Saturn that it killed them, DC was actually a positive for them, just too little too late

"stuck with the console for a few more years and see how things went?"

They probably did bleed cash like hell and didn't have the strength of Sony or Microsoft to contain that.

Sega basically ran out of funds and software sales were terrible across the board (first and third party). I am not sure what was to blame piracy or the launch of the PS2.
By 2000 the Dreamcast was officially dead in Japan with none of its high profile titles like Shenmue 2, Space Channel 5 and Virtua Striker 2 selling big, it was losing exclusives thick and fast as developers jumped aboard to the PS2's Hype Machine. And with EA's boycott of the Dreamcast, Sega lost 2 key franchises Madden and FIFA.

Sega kind of made up for America with NFL 2K, but Europe was all but lost when they failed to bring out a decent Football/Soccer game.

Peter Moore who was then the CEO (Sega OF America) was summoned by his boss, Sega CEO Isao Okawa to Japan. At the meeting Okawa told him that Japan was lost, but Dreamcasts performance in America was beyond their wild expectations. He was given $500 Million (Sega's remaining cash reserves) and told to make Dreamcast a success in America. It was either the American Market or Bust for Sega.

Let's not forget how easy it was to simply copy a Dreamcast game with a single CD-R... I don't know why Sega had to change their "SecuROM thingy" for the Dreamcast, I thought it was good enough with the Sega Saturn.

I would have liked to see more of the Dreamcast... I thought it was a great console.

The add-ons were definitely to blame for their financial woes which in turn led to them abandoning console hardware.