Sega was in for a rude awakening with the release of their Sega Dreamcast in 1998. The console was the first of the sixth generation and the first to have a built-in modem, which made it the only console to have internet access, until the release of the xbox. It sold poorly in Japan, but with clever marketing it was able to sell very well in North America, but only for a little while. The announcement of Sony's Playstation 2 killed most of the excitement surrounding the Dreamcast, causing it to underperform and eventually become Sega's last video game console.
In 2000, Sony released the sequel to their first console, the Playstation 2, digital boogaloo. One of the biggest selling point of the Playstation 2 was the fact that it could play DVD's, despite the fact that it was much smaller and cheaper.
Nintendo's Gamecube squared up the competition in 2001. It was the first Nintendo system to use optical media instead of cartridges, but the discs were only 8 centimeters, instead of the standard 12 centimeters.
Microsoft surpised everyone by jumping head-first into the console market, with the release of the Xbox in 2001. It was the first console to have an external hardrive, to include an Ethernet port for broadband internet, and it pioneered online gaming with the introduction of Microsoft's revolutionary Xbox LIVE service.
Handhelds that were released in this time include the Game Boy Advance and the N-Gage, which was a horrific, technological chimera.
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