How Xbox Could Have Helped The Dreamcast Survive

There have been rumours for years that Microsoft planned to buy Japanese game maker SEGA. But did you know SEGA hoped to make the original Xbox compatible with Dreamcast games?

The SEGA Dreamcast was launched in late 1998 to great fanfare. The console - featuring dial-up online - was years ahead of its time. Then the Sony's PlayStation 2 launched, and the SEGA console never recovered.

SEGA Chairman Isao Okawa was not willing to go down without a fight. "Before Mr. Okawa passed away," tweets former Microsoft exec Sam Furukawa, "he visited Gates several times, to see if it would be possible to add Dreamcast compatibility into the Xbox." According to Furukawa, Okawa was offering the SEGA assets to Xbox, it seems, which would create a path for Dreamcast customers to migrate to the Xbox.

Even if the Dreamcast was dying, this move would keep the platform alive and maybe even give it a second wind.

Okawa insisted that internet was indispensable for the Dreamcast games, it seems, but Microsoft didn't want an internet connection for the Dreamcast titles and negotiations fell apart.

(Of course, Microsoft pushed online gaming for its own Xbox titles; however, one has to wonder what expenses it would incur by not only making its Xbox play DC games, but play them online.)

Furukawa says that Okawa negotiated with Gates himself, but he was unable to work out a deal to pass on the Dreamcast customers. Before Okawa, Furukawa adds, he gave over roughly $US900 million from his personal fortune to SEGA in order to keep the company afloat.

Okawa passed away in Tokyo on March 16, 2001 due to heart failure. He was 74. The Dreamcast went out of production later that year. The chairman who followed Okawa decided that SEGA should focus on software production.

SEGA of America exec Peter Moore, the man who has admitted to making the decision to stop producing the Dreamcast, joined Microsoft in 2003.

CSK Holdings, the company Okawa created, owned the major stock share in SEGA until 2004 when CSK's shares were bought by Sammy, a pachinko company. And Microsoft continues to struggle in the Japanese market.

Furukawa is currently a professor at Japan's Keio University.

幻に終わったXboxのドリームキャスト互換・今明かされるその理由 [Kotaku Japan]


    Thank god that didn't happen, Microsoft will just hold the liscences for intellectual property and do nothing with it.

      Still, maybe we could have had a decent Sonic game sooner :P

      I hope Project Needlemouse is everything it should be.

    In all honesty i would've bought the Xbox if it had DC compatibility over the PS2, Im only 17 yrs old this year but back in 2003 i was a huge fan of Sonic the hedgehog merely because of the fact he looked so darn cool.

    It would slip in seamlessly with the temporary hole that Sega would leave in the Japanese market. Not only would the Sega company have much more backbone than it does today Microsoft would benefit from the installed fanbase of the DC globally, and ignore past misfortunes such as the 32x and Sega CD citng reference to a new management system and care for its fanbase.

    Depends on whether Microsoft actually owned the IPs or not. From the sounds of it, it would probably just have been compatability. This could have altered Microsoft's trajectory significantly, especially in Japan. It's always interesting when you hear about these what if's. Especially when you get to the other side and you're thinking obviously they should have done this differently, though nobody could really tell what would have actually happened.

    what a sad way to end an era.
    RIP Sega (the one that was good anyhow)

    I remember when I bought my xbox way back when it was mostly because it looked like the Dreamcast 2. The controller was similar, and it had a heap of sequals to DC games. Panzer Dragoon, Sega GT, Jet Set radio, etc. Shame this deal never went through a Sega branded Xbox probably could have gotten a good foothold in Japan.

    It makes you think how differently things would have played out if sega was succesful in its partnership with microsoft.


    quite sad to see Dreamcast fade away... Okawa is truly a visionary. internet gaming is the way to go.

    Dreamcast is still the second choice for fighting / arcade game fans who can't afford the high price tag of the NeoGeo. Long live the Dreamcast.

    Ive always thought M$ would have more success in Japan if they rebranded their consoles with a localized brand, sounds like SEGA would've been a natural fit.
    I suppose the Japanese version of Xbox could've featured some software compatibility with Dreamcast (through emulation maybe or modified hardware) and perhaps SEGA could have focussed more first party attention to a SEGA branded Xbox?

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