Really? Nintendo hardware and software always sold more than its SEGA counterpart.
NES-61.91 million units sold
SNES-49.10 million units sold
N64-32.93 million units sold
Gamecube- 21.74 million units sold
Master System-10-13 million units sold
Mega Drive/Genesis-39 million units sold
Saturn-9.5 million units sold
Dreamcast-10.6 million units sold
Source: List of best-selling game consoles - Wikipedia, the free encyclopedia
I also agree with others that SEGA's systems were ahead of their times. Heck, it seems that Nintendo took inspiration for the screen on the Wii U controller from SEGA's Dreamcast!
Just finished sonic 4 episode 2 and liked it, what's so bad with SEGA
The failure of the Sega Dreamcast can be attributed to numerous things, and the above quotes appear to sum things up. Sega Dreamcast failed due to lack of healthy competition at the time. It was also released at an inopportune time period, when the release of sixth generation consoles was a looming threat, especially the then impending launch of the PS2. Consumers not only found the Sony system's built-in DVD player more appealing, but they also wanted more from Sony due to the success of the PlayStation. I'd also factor in the somewhat disappointment of the Sega Saturn. The whole debacle with said console embittered many of Sega's fanbase - many became skeptical, which in turn slowed Dreamcast sales considerably.
Another problem was its gaming library. It was an amazing line-up - one of the best in terms of the amount of good games released in such a short period of time. However, from a business perspective, this was not a good move, apparently; pacing is everything when it comes to releasing new titles. If only Sega had been aware that releasing such a large assortment of games all at once would lead to a drought in the long term. The Playstation 2's library was much stronger and its pacing was well-executed, which further boosted its sales over the Dreamcast. Sega is also believed to have failed to employ an effective marketing strategy to draw in consumers; the PlayStation 2's advertising at the time is believed to be far superior.
Consumers anticipated the new consoles, and all attention was directed to the impending release of the Gamecube and Xbox. The announcement of said consoles contributed to the Dreamcast's short life - a mere two years. Considering the life expectancy of the previous console gen - six years or so - this was devastating. The competition was growing ever fiercer and Sega had lost its momentum rather quickly. The company's revenue suffered a substantial blow due to this; most arguably the largest contribution to the failure of the console. Sega was apparently distraught over this realization and announced that it would end the console's life early and leave the console market for good.
Despite all this, the Sega Dreamcast has gained cult status among fans, and is still given credit for having introduced to gaming internet browsing, online play, and in-game voice chat, etc. It also released a great assortment of games, many of which are a rarity to this very day (though some are now available for download on PSN and such). Many of said games also appear to be popular with homebrew developers. It was a console far ahead of its time, and it serves as a testament to the fact that this can be both a boon and a curse.