Sega has confirmed that it will no longer manufacture the Dreamcast console itself, but will focus instead on developing games software for other platforms.
The video games maker's announcement follows widespread speculation last week that such a move was imminent and was endorsed by analysts who believe that gaming software is where the firm's strength lies.
Kazutoshi Miyake, Sega Europe's chief operating officer, said: "Our new strategy will allow us to put our software content across a variety of platforms, keeping Sega at the forefront of gaming."
Sega plans to license the Dreamcast chip-set technology to set-top box companies such as Pace Micro Technologies, and to provide both online and offline games for Palm devices. Sega also plans to introduce Java-based games for Motorola's mobile handsets.
The first Sega games will be made available on other consoles later this year and include Space Channel 50 for PlayStation 2 and Sonic the Hedgehog Advance for Game Boy Advance.
The company added that by March 2002, it intends to ship more than 100 games to run on Dreamcast, 30 to run on other video game consoles and an unspecified number for other internet devices.
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