Sega to pull out of videogame-console business

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Sega Enterprises has confirmed that it's pulling out of the videogame-console business ending months of industry rumors and speculation. Sega will instead produce game software for consoles marketed by Sony Corp. and Nintendo Corp. and for handheld platforms such as the Palm operating system and Nintendo's Game Boy Advance. Sega launched the Dreamcast console more than a year ago buffeted by a $100 million ad and marketing campaign created by True North's Foote Cone Belding, San Francisco. In the fall of 2000, Sega promoted Dreamcast for multiplayer online gaming. It wasn't known whether Sega has pulled advertising or marketing efforts. A company spokesman did not immediately return calls seeking comment. The company sold just 3 million Dreamcast units in the U.S. during the last 15 months and was under increasing pressure from rivals Sony and Nintendo, and the anticipated entry of Microsoft Corp.'s Xbox, due out this fall. Sega has cut prices on Dreamcast to $100 from $150 to quickly clear retail inventory. Sega's "Crazy Taxi" racing game is the first title planned for Sony's PlayStation 2 system, due out this spring.

Copyright January 2001, Crain Communications Inc.

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