Goodnight, sweet prince. It's actually happening. We didn't want to believe it, but it's happening. Sega, as a first-party console maker, is no more. The company has formally announced that it will be quitting the hardware business and becoming a third-party software developer. A price drop for the Dreamcast was also announced to help clear any remaining stock.
Representatives for the company have said that, while the outlook is grim for the Dreamcast, the company will continue to support it fully until the end of 2001 at the very least. Dreamcast may also live on via technology integration agreements with other manufacturers, such as set top box makers.
Without a home console to call its own, the strategy for Sega will now be to become 'platform agnostic', which means that they won't discriminate when it comes to which hardware to put their games on. The Virtua Fighter series is said to be heading to Sony's PlayStation 2, as will Space Channel 5. Acclaim will reportedly work with Sega to bring arcade classics like Crazy Taxi and 18 Wheel American Pro Trucker to PS2 as well.
What this means for Sonic and Sonic Team remains to be seen at this point. It's not the most convenient time to be doing this - it's Sonic's 10th Anniversary, and Sonic Adventure 2 is due to hit the Dreamcast later this year. So who knows what will happen? Hopefully E3 in May can help clear some things up - if not sooner!