Dreamcast debut overshadowed by fears of stock shortages

Tomorrow is 'D-day', the arrival in UK stores of the much anticipated Dreamcast games console.

But the event has already been overshadowed by fears of stock shortages and a three week delay in the unit going on sale.

Independent retailers are still unsure about how much stock they will receive. However, 100 outlets across the country, owned by chains including Virgin and Electronics Boutique, plan to open at midnight tonight to start selling the games machine.

In the UK, consumers are still very keen, with a reported 40,000 advance orders taken from enthusiastic gamers eager to secure the console.

Prior to its US launch in August, 300,000 advance orders were placed for the console.

Switching sides

When Sega announced the Dreamcast, its rivals, Sony and Nintendo, quickly slashed the price of their consoles to just £79.99 in an attempt to spark a price war with the Dreamcast.

But even the most hardcore Playstation users are expected to immediately switch to Sega rather than stick with Sony and wait a year for the Playstation 2.

"People have loyalty to technology, not a company. They just want bigger and better consoles," explained Chris Ratcliff, owner, editor and publisher of Game Guide and head of the G30 consortium of independent games retailers.

With a 128bit processor, Dreamcast delivers faster and more realistic graphics than Sega's earlier gaming consoles. It is 15 times more powerful than a Sony Playstation, 10 times more powerful than a Nintendo 64, and has four times the graphics processing power of the fastest Pentium II processor.

With a modem inside, games players can use a range of Internet services, including Web access, email and chat via their TV sets, as well as online gaming.

Bad dream

The Dreamcast will retail at £199 when it goes on sale on 14 October, but was originally due to hit the UK high street on 23 September. But problems with the Internet access incorporated into the console caused Sega to put back the launch until 14 October, a move that angered independent retailers.

"It's a nightmare. I'd planned my advertising and now the whole campaign is on hold," said Will Copeland, managing director of One Step Beyond. Only days before the Dreamcast's debut, the store has yet to receive the all important delivery - around 80 per cent of the stock he requested.

"I'll believe it when I see it," Copeland told vnunet.com on Monday.

The problem is that Sega isn't saying what percentage of Dreamcast consoles are being allocated to the independents. But according to Copeland, Sega has allocated just 12 per cent to this sector.

Independent stores are said to represent 15 per cent of the total market, but Copeland believes they are hugely underestimated, so there will be a problem with shortages.

Mad scramble

Sega too is expecting a frantic rush for the Dreamcast when it finally hits the shops next month, despite consumers being able to pre-order the console from stores such as Virgin, HMV and Dixons as well as Woolworth and Toys R Us.

"There may well be a mad scramble," admitted a Sega spokesman.Ratcliff is excited about 'D-day', but is concerned that all the hard work by the independents will be overshadowed by stores such as Toys R Us and Woolworth undercutting them.

"We're looking forward to Thursday, it's going to be the bonanza we were hoping for," said Ratcliff. "The only thing that will spoil it is if the Beanie Babies and Barbie retailers get in on the act."

Assurance

Gem, the exclusive distributor for the Dreamcast, is also keeping quiet about the actual number of units being made available to the independents, but wants to assure them that they will all receive the console.

"They will get a fair and significant allocation of stock as they are an important sector," said Paul Donnelly, managing director of Gem.

A spokesman for Sega refused to comment on the delay and how it will affect stores, particularly the independents, but Donnelly was upbeat.

"We are all disappointed about the delay, but the customer won't go away. The delay gives time for more stock and more titles to be available at launch," he said.

Coping with demand

While most of the retailers have got used to the delay and uncertainty, they are concerned that if demand is too great, the stock shortage will continue and then the real problems start.

"The chains are taking deposits on Dreamcast and some are saying the first batch is already sold out," said Copeland. But for stores that only had a few consoles to start with, "the real acid test is when the second delivery comes. If the shortages are extended to the third week, then there will be problems."