Sega had decent proits for the time... I dont recall exact numbers but they had 300-400 mil per year from 1992 to 1995. 1996 they had ~160 mil profits. After that shit went sour...

I'ma tell you, Like Wu told me, cash rules everything around me.

The reason the Dreamcast died had nothing to do with the Dreamcast. It was all to do with internal drama. Look at what was going on within Sega of Japan and between Sega of America and Sega of Japan before the launch of Dreamcast and during it's life. Heck look at what has been going on SINCE then, all the good people have left because they got tired of the *****.

Before Dreamcast Sega was already on a downward slide. In 96 a lot of Sega of America employees left due to not getting along with Sega of Japan (basicly Tom Kalinske was trying to do things to save the Saturn, but Hayao Nakayama wouldn't let him). In 97 Hayao Nakayama ***** up the Bandai merger and stepped down. Isao Okawa took his place, changed the way things were run, fired or encouraged retirement of a lot of senior people, and pissed a lot of people off. He said the Dreamcast would be their last console, and didn't even really want to release the Dreamcast. He fired Bernie Stolar - who made some mistakes but was doing well advertising the Dreamcast, presales were looking good - right before the launch of Dreamcast.

The Dreamcast actually did pretty well, but it wasn't enough to cover Sega's debt. To quote Peter Moore, ""We had a tremendous 18 months. Dreamcast was on fire - we really thought that we could do it. But then we had a target from Japan that said we had to make x hundreds of millions of dollars by the holiday season and shift x millions of units of hardware, otherwise we just couldn't sustain the business. So on January 31st 2001 we said Sega is leaving hardware. We were selling 50,000 units a day, then 60,000, then 100,000..."

So Isao Okawa (who was about to die) gave Sega $695 million worth of Sega and CSK (a technology company he formed and was chairman of) stock so that they could go afford to go software-only. Hideki Sato took Isao Okawa's place. Hideki Sato use to be the head hardware engineer. Coincidence that things have turned out as they have?

tl;dr = Dreamcast died because of poor bussiness management.

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Found this somewhere

Why? Because MS have loads of money and SEGA did not, MS made a lot of mistakes with first Xbox (look how much money they lost)and the 360 but they had enough cash to overturn that situation. Sega just did not have space for mistakes

Unfortunatly this :( MS had done lost of market testing at the cost of billions... it barely even shows in their fianncial report.... Sega had few chances and blew it... the DC was amazing, but the fact that the world wasnt ready for it yet, extreme piracy and much stronger rivals in the advertisement division killed it :|

This

I guess the thread is over now....

Microsoft actually spends money, that's why.

What's that supposed to mean?

          Yes, but I think Sonic was just as revolutionary on Genesis as Halo was on the original xbox and platformers were probably as big in the 16 bit era as fps games are on consoles now.  And my question was about how Microsoft managed to make such a successful transition into the 7th gen with the first console released in that gen while Sega failed to do the same thing in the fifth and especially in the 6th gen when they had a better year for quality games in their first year of that gen with Dreamcast and the games that were released on it from its launch through January 1 2001 than many of the consoles have done since and the only console to ever have better years with their game lineup since then was PS2.