Sega-Microsoft Ties Are Over?

Nikkei Computer reports that ties between Sega and Microsoft are over -- the comment comes from CSK chairman and newly appointed president of Sega of Japan, Isao Okawa. In the past, both companies have had strong ties in the development of the Dreamcast console, where a customized version of Windows CE is used as the machine's OS. Sega has also been working closely with Microsoft's console Xbox, until negotiations broke down regarding a possible Dreamcast compatibility. Previously, it was mentioned that one of Sega's future roles with Microsoft was to become the OEM manufacturer of the Xbox, but with Okawa's recent comment, that possibility is now even slimmer.

"Sega will now be working on network-related projects without the help of Microsoft, and is currently developing the succesor to the Dreamcast - a completely separate hardware from the Xbox," Nikkei Computer reports.

At this point, Sega of Japan has not officially confirmed the existence of its new gaming console. GameSpot News will keep you posted.