Sega Dreamcast — History of Game Consoles
Seeing Sony coming to market with it’s Playstation and hearing of Microsoft’s entry to the market, Sega could no longer compete by offering consoles at a loss and ran from the market.
Above: Microsoft Xbox game console
As a result, the company ceased production in 2001. The company left the hardware business behind to focus on the software side of the business.
In Sega’s last gaming venture, they revolutionized the console market in three main ways:
1) By standardizing on a popular operating system, development was simplified.
2) Sega proved that online gaming was very lucrative and would offset the cost of console development.
3) Outsourcing of processor and graphics reduced the cost of development and facilitated easier development.