Sega offers free consoles in US

Sega is making an aggressive push into the US online gaming market by giving away consoles and launching its own gaming network service provider.

Sega's new online company, dubbed Sega.com, will also include SegaNet - a high-speed online console gaming network that will offer multiplayer games, chat, cheat codes, tournaments and other content. SegaNet will also act as an internet service provider for Sega Dreamcast and PC users. Additionally, SegaNet will provide gamers with content on other areas of interest including music, sport and movies.

To attract consumers, Sega is offering a rebate scheme not dissimilar to the free PC schemes ISPs have tested. Current Dreamcast owners signing up to SegaNet will receive a $200 rebate and a free keyboard regardless of when they purchased the system. PC users signing up to SegaNet will get a free Sega Dreamcast and keyboard.

"We believe this $200 rebate will drive consumers to retail outlets where they will purchase software, peripherals and other e-services from Sega," explained a spokesperson for the company.

Sega is gambling on SegaNet becoming ingrained in consumers' minds before Sony's Playstation II, slated for delivery in Europe and the US this autumn, and Nintendo's Dolphin, due out next year, can affect its lead. Microsoft is also planning to launch its X-Box using PC technology next year.

Sega has undoubtedly clawed its way back against Sony, its biggest competitor, since the launch of Dreamcast. The Dreamcast console now commands 15 per cent of the US gaming hardware market since its launch in September.

Analysts believe it is a radical move, but one that Sega needs to make to stay in the game, especially as they are the weakest financially. "They are begging the ranch because they have to," said Sean McGowan, an analyst with Gerard Klauer Mattison.

GTE Internetworking will provide the managed internet access service for SegaNet. GTE currently provides internet services to Yahoo and BankOne.

Sega also plans to have a specially designed MP3 player that inserts into the Dreamcast console - in the space which is currently occupied by the visual memory unit - for downloading music from the internet. The device will cost below $100 and its 64Mb of disk space will store about two hours of music.