The Sega Change

The New York Times (free registration required) is the latest with an article about Sega and the problems they are having. As hinted at before, it looks like the Dreamcast will really be Sega's last gaming console, with their focus shifting on content. Analysts expect the company to post a loss of more than $360 million this year, so the Dreamcast hardware and software sales are still too flat to make any kind of profit. Also, people close to the supposed Nintendo-Sega takeover negotiations say the two companies have been having talks despite both the companies denying. Nintendo is apparently interested because Microsoft is interested as well, and Nintendo really doesn't want MS to get their hands on Sega. The article also mentions Electronic Arts being interested, but since they don't even make games for the Dreamcast (they decided to focus on the PS2 instead) this seems less likely.

Although Dreamcast has recently been second in sales only to Sony's latest system, PlayStation 2, Sega faces new competition. Microsoft, which is planning to introduce its own system, Xbox, and a next-generation system from Nintendo, Gamecube, may pose too great a threat for Sega to continue in the hardware business and may be why it has been holding talks with its rivals.