they failed because their arcade business failed, and they made losses and were near bankruptcy. MS entering the race decided them to throw the towel

Most people I know agree that it was Sega's past hardware failures catching up to them. Dreamcast sold well at the time but wasn't enough to keep Sega afloat in the console market especially with the beast of a console the PS2 was.

About the piracy. Yes it was a problem, but Sega did fix it with the later Dreamcast model.

It's good to see that most people agree that the problem was Sega running out of money.

Do you mean the Wii U is making a profit on hardware alone, or just as a whole?

They could still go on. But MS offered a better deal in exchange of them leaving the market, developing the original Xbox(read up about it) and giving it some software. MS really wanted to secure a position as a gaming company, not because Xbox division's sales, but because games can help them on OS business.

The dreamcast failed because of consumer perception.

Theres only so many times you can be burned before you stop walking into the fire.

There was also always the SEGA japan vs SEGA of america thing. It still exists up to this day i think. It hasnt helped the company in the slightest.

Also connected to the first point, there was a Playstation, the competition. The console that went in to save the generation and bring countless new inovative experiences. Why would anyone go back to SEGA and risk it when they could just wait for the PS2?

Of course, SEGA fans like me did. I was the first one to get the Dreamcast in my country. Did it matter? Not one bit. The damage was already done with the Saturn.

Its the classic example that if you drop your system, consumers will drop you. This is the same thing that will happend if the Wii U gets droped 3 years in. The NX will have no chance if its a sucessor to the Wii U. I am completely convinced Nintendo is aware of this and it isnt the case.

What are you talking about? Saturn had lots of great games. Its just that most of its library wasn't localized for the west. I think that if it did happen, Saturn would have sold much better. But like you said SoJ and SoA were at each other's throats that entire time. I think that was the real reason why they went down. Saturn itself was quite powerful for its time. They just needed to sell it at $249 at launch and it needed a easier architecture to develop games for. Again that was more poor management.

Thank you!! So one gets it. The Dreamcast was not selling 'fine' at the time. 1.25 million units in an entire year in the US is not good.

What did Sega get blackmailed for?

Gamecube failed because PS2 was the better console and had much better games imo.