Sega announces drastic restructuring

Sega of America announces that it plans to become a third-party publisher and drops the Dreamcast price to $99.95.


Sega of America has officially announced a drastic restructuring strategy to become a multiplatform third-party software publisher. The company also confirmed a drop in the price of its Dreamcast console from its current $149.95 price point to $99.95. Additionally, as part of its three-tier business strategy, the company will focus its resources on the network gaming arena and on becoming a technology architecture provider of the Dreamcast chipset technology to a broad range of devices. The company announced today that it will provide software to Palm handheld devices, and it recently confirmed that the DC chip will be integrated into an upcoming line of set-top boxes from European firm Pace Micro Technology.

"Sega is a company that has always dared to innovate and push this industry forward," said Peter Moore, president and CEO of Sega of America. "Sega will continue to do so with its new strategy, and the result for consumers will be what you would always expect from a rules breaker like Sega--a library of pioneering, jaw-dropping content now available any way you want to play."

The Dreamcast price drop will become effective on February 4 in North America. As expected, production of the Dreamcast console will be discontinued on March 31. Sega is making the change in an attempt to expedite its exit from the hardware business, though the company will continue to support the console with more than 30 first-party games scheduled for release this year. The company expects to have a 4 million unit installed base in North America and an installed base of more than 8 million units in Japan.

Sega's stock has risen nearly 70 percent over the past several days since news regarding its restructuring strategy broke. The company has received an additional cash infusion through a personal donation of $730 million from CSK chairman, Isao Okawa.

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