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November 29, 1998

CUSTOMERS QUEUE FOR DREAMCAST – SEGA WAITS FOR CHIPS

By CBR Staff Writer

Games machine maker Sega saw customers queued from midnight to get its new Dreamcast console when it was launched in Japan last Friday. But company bosses, who are relying on the new 64-bit machine to leapfrog rivals Sony Corp and Nintendo Inc, are more likely to be missing sleep over problems at supplier NEC’s chip plant at Hiroshima where they are only getting yields of 20% to 40%. The problem, insists NEC, is temporary and the result of using a cutting edge 0.25-micron process (CI No 3,538). Despite this, Sega is optimistic about achieving sales of 500,000 before Christmas in Japan before launching in the US and Western markets next year. With Sony and Nintendo working in considerable secrecy on their own new 64-bit consoles, it is essential for Sega to get out as many machines as possible while it holds a technical advantage over its rivals. Sega president Soichiro Irimajiri was quoted in the Financial Times as saying: With the release of Dreamcast, we’re not competing with Sony and Nintendo any more, we’re blowing them out of the water. UK graphics chip designer VideoLogic also has a lot riding on Dreamcast’s success after winning the contract when Sega ditched plans to use 3Dfx Interactive’s chips. The company hopes the success of the console will lead users to migrate to PCs equipped with its PowerVR graphics accelerator.

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