On September 9, 1999, Sega released the Dreamcast in North America. While the launch was successful--Sega touted a one-day sales total of nearly $98 million--the good news and the console itself were short lived. The Dreamcast soon faltered, and Sega pulled the plug on its final hardware effort in January of 2001. Since then, it has become a third-party publisher, with its former hardware standard-bearer Sonic the Hedgehog appearing on systems made by former rivals, such as Nintendo, Sony, and Microsoft.
Throughout the Dreamcast era and for two years afterward, Peter Moore was president and CEO of Sega of America. For the 10th anniversary of the console, Moore took time out from his current duties as president of EA Sports to speak with GameSpot about the lessons to be learned from the Dreamcast's brief life and rapid demise. Excerpts of the interview follow below. A more thorough version of the conversation--one in which Moore talks about the changing industry, EA Sports' downloadable content plans, and this year's lack of NCAA football, NHL, or NBA action on the Wii--can be heard on this week's episode of the HotSpot podcast.
GameSpot: What lasting impact do you think the Dreamcast made on the industry?
Peter Moore: I think there are a couple of things. As an employee at that time and somebody now looking at this milestone of 10 years, I think the lasting impact on the industry is that we put an online console onto the market...albeit dial-up and at a time when the huge majority of Americans were connecting through a phone modem rather than cable, DSL, or any form of broadband.
And secondly, you look at the way we built the launch, made the launch a huge event, and, I think, catapulted video games into the general psyche of entertainment and made it a legitimate entertainment medium. We had looked at the numbers we felt we were going to get in the first 24 hours a few months prior to that [and] had done a ton of research on entertainment launches. It was very clear to us that we were going to be--if we hit our numbers--the biggest 24 hours in entertainment retail history. And we put a lot of stock behind that as a PR message.
I think it was instrumental in vaulting video games into the minds of even non-gamers as a legitimate entertainment medium that could stand on its own and wasn't the domain of boys in their bedrooms. To this day, I think you can look back at the Dreamcast as being a benchmark in how to launch a console, how to push technology forward, and how to change the view of observers as to what video games are all about.
GS: We're now living in a world where 10-year life cycles are an entirely realistic goal for successful consoles. Is there anything you think could have been done differently that would have the Dreamcast only now winding down its last days?
PM: Yeah, I wish. They were challenging times, if you recall. It had been a difficult few years prior to that for Sega with the Saturn not quite doing what I think the expectations were. I wasn't with the company then. I was still with Reebok in those days. Once I arrived at Sega, I realized we needed to do two things: a little bit of rehabilitation with the consumer and then start fresh with the Dreamcast itself.
When you think about the challenges that were impending, it was obviously the launch the following year of the PlayStation 2 and what that would mean for us. Could we actually establish a platform that could live alongside and be very competitive with the PS2? And that platform was going to be online gaming. But of course, we had determined to build a dial-up modem in, and the broadband peripheral came later with just a couple of games. Quake springs to mind and maybe Counterstrike...that allowed you to play on a broadband modem through the Dreamcast and it just certainly wasn't a portfolio that was big enough.
I think the overall platform of online gaming and expression we'd coined at the time, "taking gamers where gaming was going" were probably somewhat premature in that positioning. The market wasn't ready for it. The infrastructure in North America wasn't ready to deliver broadband to everybody's home like it is today, for the most part. And we simply didn't have the pipeline of software that we could sustain for a number of years that was going to make the platform a must-have even in the face of a very powerful competitor in Sony coming to market with the PS2.
GS: Some of the Dreamcast's best-loved and most memorable games--Shenmue, Jet Grind Radio, Skies of Arcadia, Seaman, Crazy Taxi--were original intellectual properties. Was there too much of an emphasis on these original and unproven franchises?
PM: Yes and no. We had nine studios in Japan and relatively decent third-party support across the board. But there was a little bit of the second phase of "wait and see." In other words, we had not secured, two to three years out, a pipeline that we could look at from our third-party partners at that time. But we had a very strong engine out of Tokyo that was supplemented. A number of those were actually arcade games, Crazy Taxi being the most memorable. You still had the arcade teams--the AM teams as we called them--that had two platforms they could develop for: the Sega arcade machines in Japan, which were during that period of time still successful and popular, and then it was a relatively quick port to the Dreamcast.
The development teams there were very strong and had a very clear view of what they wanted to do to develop new intellectual property. There was no questioning that that was the right thing to do at that time. As you mentioned those games, all of them were groundbreaking. You think of Seaman, which was so quirky and unique, but really caught the attention. And then Shenmue...still to this day if I start talking Dreamcast to people I meet on the street, it's still one of the games they feel was groundbreaking. Still to this day, everyone wants sequels to Shenmue.
To answer your question, I wouldn't have changed the strategy. I thought new intellectual properties were where we needed to go. We needed to make sure we were delivering a differentiated experience and weren't relying too heavily on third-party games that also might show up on the PS2.
GS: Games like Seaman and Shenmue obviously made a very strong impression on people. Did you find that translated well into sales?
PM: Yes and no. New intellectual property is always a challenge because you've got to build it from scratch. You've got to explain it to the consumer. It wasn't easy explaining how you keep your Seaman alive through oxygen and heat, making sure you talk to him and why he would know you hadn't played with him the previous day. And in fact, you were cheating on him by playing Sonic the Hedgehog. It was all very new and different, and it was a tremendous amount of fun.
Shenmue was Yu Suzuki's masterpiece. It was deep, but we needed to be able to build upon this, and in those two instances, neither of them were truly mass-market games. You needed a microphone. Certainly Seaman was more expensive than the average game. We didn't have enough games to justify the microphone on top of that. And Shenmue was a very deep experience. But in those days role-playing games of that nature were still somewhat of a niche genre rather than a mass-market genre.
We really didn't--maybe with the exception of Sonic Adventure--have that game that was aimed at a broad mass market that could really be the "killer app" to drive the hardware. Certainly sports were serving a purpose for us then, but there was nothing when we look back that said, "This is the one game that is going to sell millions of units, the must-have game." We had a tremendous portfolio at launch--18 titles and some great games that followed up quickly--but nothing you can look back and say was the game that drove Dreamcast where it needed to be.
GS: The Dreamcast had at least some support from every major third-party publisher except EA. From your perspective on the Sega side, what kept EA from embracing the Dreamcast? How badly did the lack of support hurt the machine?
PM: Difficult to say how badly it hurt the machine. The one thing it did have us do at Sega was invest heavily in our own sports brand--Sega Sports--that evolved into 2K Sports. It created a great and fun competitive element between Sega and EA, which I enjoyed thoroughly. And interestingly, now being on the other side, [I] talk fondly of people who were here at the time, including [EA CEO] John Riccitiello.
It actually, I think, helped grow the sports genre during the 1990s because there was tremendous competition between ourselves and EA and--depending on the sport--Acclaim and Konami. They were fun times. Do we wish that EA had published for the platform? Of course, but they had their own reasons. It was their business; they made a decision. And we just had to get on with it, not worry too much about what we couldn't have, and just focus on what we could get.
GS: At Sega, you oversaw the company's last attempt to reestablish itself in the hardware market. At Microsoft, you fought with Nintendo for a distant second behind the PlayStation 2. At EA Sports, you're finally the biggest dog on your particular block. How different is it playing the favorite instead of the underdog?
PM: You tend to think about your brand, your business, what the consumer wants, and worry less about the competition. Do you look back at those days and enjoy being the feisty underdog? Sure. But in my role today, I'm absolutely blessed to have such a great brand as EA Sports and phenomenal licenses. And I think the world has changed.
We get competitive challengers all over the place, from my old friends at 2K Sports, from Konami...particularly in the world of soccer, obviously. But in today's world of 24-hour-a-day interaction with our consumers, we've got to listen to them and make the best game they're looking for, rather than worry about what the competition is doing. It's a whole different world today than it was as recently as seven or eight years ago.