The combatants: Dreamcast vs PlayStation 2
The weapons: Soul Calibur (Dreamcast), Tekken Tag Tournament (PS2), Jet Grind Radio (Dreamcast), SSX (PS2), Sonic Adventure (Dreamcast), Grand Theft Auto III (PS2)
The trash talk: "The console war is over. The battle for number two is undecided, but by next year will be moot." – Sony CEO Kaz Hirai, 2002 (after the Dreamcast had ceased production)
Above: OK, so this one doesn't have much to do with the console wars. But it rules. Stuff like this is why we liked the Dreamcast - no wonder it failed
The battle: Dreamcast was the system that made up for Sega's past mistakes. It came with a modem; it offered an Ethernet adapter for the five or six people who had access to broadband in 2000. It was the first console with native high-resolution VGA output. It had a keyboard, a mouse, and a web browser. And by the time the PS2 launched in 2001 for $300, Dreamcast was half the price of Sony's supermachine.
And yet, in addition to DVD movie playback, PS2 had something even more important for existing PlayStation owners: Backward compatibility. Sega, with a string of orphan hardware systems, designed Dreamcast as a fresh start, but Sony had only one previous product to consider, making PS1 playback on PS2 monumentally easier. After years of little more than a "thank you" for their support of other game companies, Sony fans felt respected; their corporate overlords now loved them back. Anybody who wasn't already emotionally invested in the console wars was now, and Sega paid for its past mistakes at exactly the wrong time. The well-designed Dreamcast wasn't too little, but it was too late.
Of course, the increasingly vocal executives at rival companies made the most of this. Sure, it's every businessman's job to sell his product and stop you from buying the competition, but with the advent of the PS2, CEO boasting grew more powerful than marketing campaigns. If you can't say something nice, say it into a microphone. Now the troops, once listening to television commercials and reading print ads, were taking their orders directly from the generals.
The spoiler: Xbox and GameCube. Even while Dreamcast was showing its best stuff, the world knew PS2 was coming...and both Nintendo and Microsoft were working on their own challenges to follow that. The Xbox and GameCube launched the year Dreamcast was discontinued, which changed the players but didn't fundamentally change the game.
The victor: After a 1999 launch, Dreamcast sold about 10 million consoles before its abrupt 2001 end. PlayStation 2 currently claims 115 million units shipped worldwide and counting (roughly 37 million in the US); the Xbox 360 and the Wii may be the new hotness, but at press time, the PS2 still outsells either one on a monthly basis.
