The news helped raise the share value of the company by 15% in early trading today in Tokyo. Analysts see Sega’s strength in its games development, not its consoles.
Sega is possibly admitting defeat in a market where it trails behind both Sony and Nintendo. Microsoft’s Xbox is due for release later this year. Some reports suggest that Sega is also negotiating the possibility of development work for the Xbox and planning to incorporate Dreamcast technology in other manufacturers’ set-top boxes.
Sega has made losses in each of the past three years and has warned investors that it anticipates losses of around $200 million in the current financial year, ending in March.