Why The Dreamcast Was Ahead Of Its Time

The Dreamcast was the last console ever released by Sega. In an attempt to bring back the success they had with the Genesis/Megadrive and erase the failure of the Sega Saturn, Sega released one of the best gaming consoles ever.

source

The background

Sega launched their sixth generation console on November 27, 1998 in Japan. It was the the successor to the failed Sega Saturn that was released 3 years earlier.
The 128-bit console was a last attempt to bring back the former glory that Sega had during the 16-bit era.

The Dreamcast is a disc based console with a 200 MHz Hitachi SH-4 CPU and a 100 MHz NEC PowerVR2 GPU. The Dreamcast has 16 MB main RAM and can output approximately 16.77 million colors at a resolution of 640 x 480

The Dreamcast's main competition at the time was the Playstation 2

The Futuristic

There were a lot of things why the Dreamcast was considered ahead of its time.

The controller

Sega was always good at designing controllers. Their six-button genesis/megadrive and Saturn controller were among the best in the business. The Dreamcast controller was no exception. It featured a analogue stick on left side of the controller and had triggers instead of shoulder buttons.
The Dreamcast controller was revolutionary because it had a modular design. The controller has two expansion slots that can be used to insert add-ons like the VMU (Visual Memory Unit), Rumble pack or even a microphone.

The Dreamcast controller is rumored to be the main inspiration for the original Xbox controller.

The VMU

The VMU (Virtual Memory Unit) is memory unit with a LCD display that can also be used to play mini games without being connected to the Dreamcast. It shows information while playing, this is either in-game info or a logo of the game/game developer. Another feature is that you can connect two VMU's to exchange information. It is basically a mini gameboy that you can insert into your controller. Remember that this was introduced in 1998, the next console that had a similar function was the nintendo Wii U and that console was released in 2012, almost 14 years later.

Online Gaming

Nowadays online console gaming is more something we find very normal.
But back in 1998 online gaming on consoles was a novelty. This was the time of dial-up modems. Internet was done over telephone landlines and the cost for surfing the internet was high. DSL was not commonplace and very expensive. If you wanted to game with your friends, you had to invite them over to your house.
The Dreamcast came with a built in modem. The service for online gaming was called Seganet, you could use the service for online gaming but also web browsing. The most well-known game that offered online play was Phantasy Star online. Although the Dial-up was a 33k or 56k modem there was little to no lag when playing.
For most console gamers this was the first time they could play online with a gaming console.

In 2001 Sega released a DSL modem for broadband internet access. Sega was criticized for not including the modem at the initial release

The Games

This generation of Consoles was finally able to produce arcade quality graphics. The Dreamcast was no exception. The Dreamcast version of Soul Calibur was even better than the arcade version. The Dreamcast version added extra content and a Mission Mode.
The Dreamcast was innovating when it came to hardware but it was also innovating when it came to games. The most noteworthy innovating games were Seaman (where you interacted with your game character using the microphone) and Shenmue which was an open world game (again, remember that we are talking about 1999/2000!).
The list of great games for the Dreamcast is very long, Games like Soul Calibur, Street Fighter III, Silver, Power Stone, ShenMue 1 & 2, Crazy Tax, Capcom vs SNK 2 (the list goes on and on) are still fun to play to this day.

I often start up my Dreamcast to play some of these games and they don't feel dated. The only thing that really shows the age of the games is the 640x480 resolution.

The Failure

So if the Dreamcast was so great, why wasn't it more successful? Well, there were a couple of reasons why the Dreamcast did not do as well as it should have.

The competition

The mighty Playstation 2. Could any console have gone up against this console and come out on top? Basically, the Dreamcast never stood a chance.

In 2012 worldwide sales for the Playstation 2 totaled a whopping 155 million (That is 12 years after its initial launch!).

Piracy

It was really easy to copy games for the Dreamcast resulting in low sales for Dreamcast games. Ironically the roles were reversed with the previous generation of consoles (the Sony Playstation and the Sega Saturn). Then it was the Playstation that had Piracy issues.

In 2001 on March 31 Sega finally pulled the plug on the Dreamcast and announced that they were backing out of the console market.

The console is still very popular to this day and a lot of Sega enthousiasts are still hoping that Sega will reconsider their decision of never releasing another console. Every now and then news pops up on the internet claiming that Sega is planning to release a new console or that there are plans of releasing a Dreamcast 2

source

sources/links
http://bordersdown.net/content/400-Dreamcast-Peripherals-and-Hardware-List-with-photos
http://segaretro.org/Dreamcast_Controller
http://www.gamesradar.com/best-dreamcast-games-all-time/