The cost to manufacture Dreamcasts?

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CD AGES
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The cost to manufacture Dreamcasts?

Post#1 » Fri Jul 03, 2020 3:29 pm

Is there any documenatation on how much SEGA spent on manufacturing of Dreamcast's, particularly during its first initial production run in 98/early 99?

Does anybody know for a fact how much each until would cost the company to manufacture?
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dark
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Re: The cost to manufacture Dreamcasts?

Post#2 » Sat Jul 04, 2020 12:23 pm

You might want to check this out, I'd never seen it before today, but it looks like a tear down and estimated manufacturing cost analysis for the dreamcast circa 2000 conducted by a third party.

http://ebook.pldworld.com/_eBook/SEGA/1 ... amcast.pdf

You probably want to look at pages 34 and on with page 49 showing the total estimated manufacturing costs ($250 per console including cost of components and costs for assembly of the components).

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Bob Dobbs
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Re: The cost to manufacture Dreamcasts?

Post#3 » Sat Jul 04, 2020 12:39 pm

Wow, and I bought mine for only $150.00 at a Toys'r'Us.
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dark
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Re: The cost to manufacture Dreamcasts?

Post#4 » Sat Jul 04, 2020 12:49 pm

I wonder how the business model for the naomi worked out. It seems like it was mostly the same components, however I think sega sold the naomi main hardware for over $1000 in the early 2000s (just the motherboard, not a full plastic or wooden arcade cabinet). If they could manufacture naomis for ~$300 and sell them for ~$1000 or higher, that seems like a good rate of return.

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Ian Micheal
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Re: The cost to manufacture Dreamcasts?

Post#5 » Sat Jul 04, 2020 12:50 pm

$199
The Dreamcast launched in North America on September 9, 1999 at a price of $199—which Sega's marketing dubbed "9/9/99 for $199".

Which made this the silly price they lost heaps selling them in fact if the launch went better which at the time set a record it would sent them bankrupt

It would cost more right now to make a dreamcast then it did then..

Plus the fact there was chip shortage

Sega released the Dreamcast in Europe on October 14, 1999, at a price of GB£200. By November 24, 400,000 consoles had been sold in Europe.

might know GB was worth more then the usd so the cost of the console in the uk was a lot higher was worth more in 1999

https://www.poundsterlinglive.com/bank- ... o-USD-1999

my first dreamcast in australia cost me $499 price at launch

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Tarnish
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Re: The cost to manufacture Dreamcasts?

Post#6 » Sat Jul 04, 2020 1:11 pm

Dunno how true it is, but I recall reading SEGA of Japan wanted to sell it for $250, but Bernie Stolar didn't budge from the $200 price.

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CD AGES
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Re: The cost to manufacture Dreamcasts?

Post#7 » Sun Jul 05, 2020 2:14 am

Tarnish wrote:Dunno how true it is, but I recall reading SEGA of Japan wanted to sell it for $250, but Bernie Stolar didn't budge from the $200 price.


It's true. It's essentially what got Stolar fired from SEGA only weeks BEFORE the US launch. SOJ didn't want the console to sell at a loss out the gate so they asked him to price it at $250. He went over their heads and priced it at $199 instead.

Ian Micheal wrote:$199
The Dreamcast launched in North America on September 9, 1999 at a price of $199—which Sega's marketing dubbed "9/9/99 for $199".

Which made this the silly price they lost heaps selling them in fact if the launch went better which at the time set a record it would sent them bankrupt

Plus the fact there was chip shortage

https://www.poundsterlinglive.com/bank- ... o-USD-1999

my first dreamcast in australia cost me $499 price at launch


It's probably why the hardware was only mass produced on assembly for only a year (or so i hear) and why it went thru 2 additional hardware revisions in such short amount of time in an effort to reduce cost as much as possible (Final hardware revision for the console was so cheaply built! -_-)

That's why I asked. I wanted to know if the hardware was ever profitable during its retail life. They tend to only ever be at launch MSRP (unless your Microsoft lol!).

The chip shortage only ever affected the Japanese launch in 98 after NEC made a fairly negligent error during manufacturing process of the chip. That said, that fiasco really derailed the launch out there and SEGA wasn't even able to fulfill every preorder.

Yeah recall reading Dreamcast's being very expensive in that region due to how scarce they were out there. I hear system and it's launch was a huge blunder in Australia due to how poorly handled the distrubution was managed.

dark wrote:You probably want to look at pages 34 and on with page 49 showing the total estimated manufacturing costs ($250 per console including cost of components and costs for assembly of the components).


Yeah someone sent me this link yesterday, and even prior to that, most of us on Social Media estimated that each unit had to cost around $250 after I asked. Nevertheless thank you Dark. Its really good stuff indeed.
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Re: The cost to manufacture Dreamcasts?

Post#8 » Sun Jul 05, 2020 2:32 am

dark wrote:I wonder how the business model for the naomi worked out. It seems like it was mostly the same components, however I think sega sold the naomi main hardware for over $1000 in the early 2000s (just the motherboard, not a full plastic or wooden arcade cabinet). If they could manufacture naomis for ~$300 and sell them for ~$1000 or higher, that seems like a good rate of return.


Considering the platform was official supported for nearly 14+ years, is a pretty good indicator it was financially profitable for SEGA to continue supporting it. Tho I imagine the Software NAOMI Rom Cartridges were not as cheap to manufacture as the hardware itself. Which is perhaps why they eventually replaced Rom Cart's with GD-ROM Media in conjuction with the NAOMI Dimm board attachment of the Naomi 2.
Tho being the particular industry that it is, I can't imagine arcade hardware having anywhere near a sizable install base (or demand) as its home counterpart.
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Re: The cost to manufacture Dreamcasts?

Post#9 » Sun Jul 05, 2020 1:43 pm

I gotta question some of this a bit, Was it really such a big deal DC's were sold at a slight loss? That's pretty much been the business model of home consoles for the most part. I have nearly every issue of Next Generation Magazine, when looking thru the issues leading up to the launches in 1995, the Saturn was sold at a loss at launch, the original Playstation and PS2 were sold at a loss at launch as well. The business model has almost always been make the money back on software sales. The only company that either tries to make a slight profit or at the very least break even on console sales is Nintendo

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CD AGES
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Re: The cost to manufacture Dreamcasts?

Post#10 » Sun Jul 05, 2020 4:48 pm

The PS1 sold at cost. And that was only AFTER Sony's last minute decision to price drop their hardware at $100 cheaper than Saturn on day 1. A bold move that paid off. SEGA couldn't even follow suit with their own price drop until much much later since Saturn was so expensive to manufacture they literally couldn't afford to. Even at $399 MSRP, SEGA still sold the hardware at a considerable loss.
Hideki Saito has said that is why Saturn hardware production was cut off so early. SEGA didn't want to sell it since each unit sold put the company on the red even moreso.
Last edited by CD AGES on Sun Jul 05, 2020 6:14 pm, edited 2 times in total.
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