Dreamcast jumping off the shelves

Sega's video product shows how to gladden the executive heart

Fun and games

September 11, 1999|By Kristine Henry | Kristine Henry,SUN STAFF

Sega executives had been predicting about $41 million in sales during the first 24 hours that the company's new Dreamcast equipment and games were available. Turns out they were shy by more than half -- first-day sales reached almost $97 million.

The one-time industry leader is hoping that the new product, despite some initial glitches, will help bring it back from the brink of extinction. In 1995 Sega replaced its popular Genesis system with the Saturn version, which bombed. The Tokyo-based Sega is now a distant third to Sony Play Station and Nintendo 64 with about 1 percent of the $7 billion video game market.

This week's sales numbers have not been broken down into regions yet, but, judging from what store managers in this area had to say, Baltimoreans contributed their fair share to the buying frenzy. The Toys `R' Us in Towson sold out of Dreamcasts on Thursday, with all of the approximately 100 sales going to people who had put deposits on the systems. The store received another 60 units yesterday. "We did great; if we had more we would have done better," said Dan Dias, one of the store's managers. "There were about 15 or 20 people waiting at the door when we opened."

Business was also good at the Funcoland in Mondawmin Mall, where more than a dozen people were waiting when the store opened. "We were busy from when we opened at 10 a.m. until we closed at nine," said store manager Terrill Powell. "There wasn't shoving and pushing; most people had called and reserved their games ahead of time."

The store had fewer than 100 Dreamcast units on hand and still has some left over, Powell said, although most have been reserved.

More than 300,000 people throughout North America put down at least $10 to reserve their Sega game systems through today. The system retails for $199.99; games cost up to $49.

But some of those games don't work.

Sega acknowledged yesterday that some copies of four new games -- Blue Stinger, Sonic the Hedgehog, Hydro Thunder and Ready to Rumble -- are defective.

Sam Kennedy, news editor of the San Francisco-based videogames.com Web site, said that even a minor glitch could be a big problem for Sega.

"They had a lot of hype for this system and they had a great launch up until now," Kennedy said. "This may not seem like a big deal, but they can't really afford any problems right now."

The company said the problem was isolated to one manufacturing plant.

"Anytime you have a new hardware system and games, you are bound to have glitches here and there," said Sega spokesman David Karraker. "We are analyzing the problem and encourage people who have problems with the software to take it back and get the game replaced."

But officials kept an upbeat mood, noting that the film "Star Wars: Episode 1 -- The Phantom Menace" took in $28.5 million in its first 24 hours -- a record in entertainment history.

"We always thought this was something big, but to surpass and more than triple the previous sales leader is just phenomenal," Karraker said. "We are back on track to be a dominant force in the video game industry."

It's too soon to say, though, if the Dreamcast will put Sega back on top, said analyst David S. Leibowitz of Burnham Securities.

"The key will be the play value of the software," he said. "Toys are one of the few items that are bought, not sold. The first member of a peer group gets a game and invites others in the peer group to play, and if they like it they will give the product two thumbs up and see that the toy-buying unit of the family buys it for them."

Leibowitz said Sony and Nintendo, which recently cut their systems' prices to $99, will have a hard time making a dent in Sega's sales. New versions of game machines by Sony and Nintendo aren't due out until next year.

"For the immediate future," he said, "the Dreamcast is the only next-generation piece of hardware available."

The Associated Press contributed to this article.

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