Dreamcast system brings Sega back into contention

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Call it a Dreamcast come true. Sega of America might be on a roll.

That wasn't the case a year ago as the company slogged through marketing miscues, management churn and a paucity of support from software developers. Its Saturn videogame system proved no match for Sony Computer Entertainment of America's burgeoning PlayStation franchise.

But with the rollout of its Dreamcast system last fall, Sega returned to its roots as the ultimate brand for the passionate gamer and appears poised for growth this year.

Sega sold nearly 1.7 million Dreamcast systems in the U.S. from Sept. 1 to Dec. 31, 1999, according to technology researcher PC Data. Sega projects sales of 2 million by March 31, when its fiscal year ends. During Dreamcast's September '99 launch month, Sega sold a whopping 700,000 systems, compared with 370,000 for PlayStation.

As of January, Dreamcast accounted for 16% of the dollar share of the videogame system market, just below Nintendo of America's N64 console, at 17.5%. PlayStation weighed in with 34% of the market, while Nintendo's color Gameboy had 31%.


Peter Moore, senior VP-marketing at Sega, attributed part of the comeback to an ultraedgy $100 million ad campaign by FCB Worldwide, San Francisco, that signaled a return to the company's "brand soul."

"Sega is gaming-we're defiant, unexpected, fearless and irreverent," Mr. Moore said.

Sega now is preparing for the September launch of its new Dreamcast Network, a system that facilitates online play between gamers located across the street or the country. The marketer will boost its ad and marketing budget to support the rollout. Mr. Moore projected a range from $115 million to $140 million, though that hasn't been finalized yet.


Sega will continue its guerrilla marketing tactics, evangelizing to about 140 fan sites and extending its extreme-style creative. And as with last year's Dreamcast debut, Sega will deploy all the tools in its arsenal-wild postings, event marketing, product placements, alternative music sponsorships, a mobile truck tour, retail tie-ins and celebrity demos.

"We want to let the consumer know that Sega is true to the gamer and also has an online component," Mr. Moore said. "Sony, on the other hand, is developing a digital entertainment platform with no built-in online solution, no modem."

This week, Sega's in New York demoing its new game network and software titles, and it will unveil a new wave of animated Dreamcast TV spots in April.

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