The Dreamcast failed because of three main flaws that, in the aggregate, simply overcame Sega. First, Sega should have gone with some type of proprietary format or DVDs, rather than their standard CD based system--piracy was so rampant that it made publishers very reluctant to support the system, especially given the more secure options presented by Nintendo and Sony at the time. Second, Sega focused too much on original IPs and not enough on cultivating previously popular franchises... I loved Samba de Amigo as much as the next guy, but it was no Madden. And finally, Sega was simply too proud: time and time again, with every company from Atari to Nintendo to Sony, we gamers have seen that pride truly comes before the fall.