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Sega unveils digital camera for Dreamcast

In a sign that gaming consoles are gaining momentum as PC alternatives, Sega unveils a new digital camera for its Dreamcast gaming system.

Sega today unveiled a new digital camera for its Dreamcast gaming system, a sign that gaming consoles are gaining momentum as PC alternatives.

Sega's Dreamcast machine has been at the forefront of the market for Internet devices, as the console offers both gaming capabilities and Internet access. Sega has painted the machine as the centerpiece of its digital entertainment and home networking strategy.

With today's release of the digital camera, called the Dreameye, Sega is acting on its digital entertainment strategy.

Digital cameras may just be the tip Sega Dreamcast of the iceberg. Dreamcast-like television-based Net appliances are already proving among the most popular ways for non-PC users to access the Web, according to a recent report from International Data Corp. Although many homes still don't own a PC, most have a television that can be used as an alternate medium to access the Net, analysts have said.

Sega reported strong sales of its console in the United States, but Dreamcast wasn't well received in Japan, the company's home market. Analysts have said that to maintain its competitive edge, Sega needs to expand its sales beyond its core "early adopter" market.

Sega's rivals--Sony and Nintendo--have also pushed similar strategies for their own gaming systems. Sony's PlayStation 2, scheduled to be released in March, will act as a platform for everything from home shopping to banking to watching movies over the Internet, the company has said.

"Right now we're just getting started," said Kevin Hause, an analyst at IDC, referring to the market for Internet-connected gaming consoles, handheld devices, and other Internet appliances

"The growth (of information appliances) will accelerate over the next couple of years, and will be one of the fastest growing categories around."

The market for Net devices, including TV set-top boxes, handheld computers and gaming consoles, is set to grow from 11 million units shipped in 1999 to 89 million units in 2004, according to studies.

CNET's complete Dreamcast guide The Dreameye, unveiled in Tokyo today, will use photo editing software developed by Picture IQ. Using the Dreameye, Dreamcast users will be able to capture digital images and edit them using the software. Users can also send pictures to friends or family via the Internet.

"Sega is committed to providing people with the power to do more with the Dreamcast system," said Kideki Sato, corporate senior vice president at Sega, in a statement. "We want people to have more fun through the network, be more creative and communicate with more people."