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Sega Denies It Will Pull Plug On Dreamcast

TOKYO – A Japanese newspaper reported here that Sega Corp. is seriously considering abandoning the production of its Dreamcast video game platform and considering developing software for rivals Sony and Nintendo.

The Nihon Keizai Shimbun, Japan’s leading daily, reported that Dreamcast production would end after March and that sales would continue only as long as inventory lasted.

Follow-up reports later quoted a Sega spokesman in Japan acknowledging the company is currently deciding whether to continue manufacturing the hardware platform.

However, Sega America circulated a statement reaffirming the company’s “global commitment” to the Dreamcast platform.

“In fact, Sega has more than 100 games worldwide coming out for the platform in the next year,” the company said. “It is not Sega’s policy to comment on rumors, and the company has not made any statement regarding ceasing manufacturing of Dreamcast or development for other video game platforms.”

Sega has been in trouble for years, forecasting $202 million in losses for the fiscal year ending in March. It posted losses of about $342 million for the previous fiscal year.

Analysts said the reports of Sega’s change of direction are credible, due to disappointing sales this holiday season, in addition to pending competitive threats from the launch of Microsoft’s Xbox and Nintendo’s Gamecube later this year.