Sega plans Dreamcast's U.S. debut

Sega of America will sink $100 million into the ad campaign for the new game console, which it hopes is a nightmare for rival Sony.

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Dream no more. Sega of America announced plans to start selling the company's next generation Dreamcast game console in the U.S., backed by a $100 million marketing campaign.

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When worlds collide is pulling out all the stops to take back market share in the ultra-competitive game console market, according to president and COO Bernard Stolar. The system will be priced at $199 when it debuts on September 9, which Stolar claims is a first for any new game console rollout.

"We are on target for the biggest game console launch in U.S. history." Stolar said in a conference call.

Just as importantly, the high-profile rollout of the system will be a high-water mark in terms of the convergence of PC and consumer electronics technologies. The system offers the ability to run games written for the Windows CE operating system from Microsoft; at least two of the expected 12 titles initially available for the platform will use Microsoft technology, while the rest use Sega's own application programming interfaces (APIs).

The system also includes a 200-MHz 128-bit processor from Hitachi and is the first console to offer a built-in modem for online gaming, Web browsing, email, and chat capabilities. All told, Sega claims that the console's graphics processing power is four times that of a 32-bit 450-MHz Pentium II processor.

Sega, which trails Sony and Nintendo in the video games market, introduced Dreamcast in Japan on November 27. Sega is attempting to catch up in the $15 billion market for video games with Sony's PlayStation, which has sold about 50 million units since 1994. So far, Sega said it is on track to sell one million units in Japan alone, and has an "impressive" list of backorders from U.S. retailers, said Stolar.

Sony has already announced plans for a new PlayStation next year, in part to keep customers waiting for its system instead of switching to Sega's. Sony, for its part, is promising its system will include a 300-MHz 128-bit processor.

In Europe, the Dreamcast system will also launch in September for $321 in the United Kingdom, which is higher than rival systems based on older technology. In other parts of Europe, the system will sell for under $300.

Sega Europe, the company's European subsidiary, said it plans to spend 90 million euros ($97 million) marketing the system in its first year.

Sega has delayed selling the system in the U.S., the biggest market for video games, and the U.K., the No. 3 market, as it waited for the development of new games and for NEC , which manufactures the product, to increase production.

Bloomberg contributed to this report.