I had a friend once tell me, "Go big, or go home." I'm here to tell you Sega is going big. With Dreamcast, we're aiming high. I'm here to challenge you to dream big and tell you that everything you know about video gaming is about to change, thanks to Dreamcast. Sega is going to take market share back from Sony and Nintendo with Dreamcast.

I believe that Sega, because of its heritage in game development, can win back its position as it has in the past. Every retailer believes it. The media believes it. Consumers can't wait. We've already come close to selling 1 million units in Japan and our US launch will take place this Fall.

I've been in this industry a long time, and have seen a lot of changes. Dreamcast is truly revolutionary. Sega Dreamcast opens up a new world for developers, players and the entire video game industry. At Sega we are out to change the way people think about video game hardware and software. And I know Dreamcast is the platform that will change more than a few minds.

The good news is that the change holds huge promise for all of us in the industry. Every one of us - manufacturers, developers, publishers, retailers and consumers - will benefit from changes in the video game industry today. Like they say in the movies, "hold on folks, you ain't seen nothing yet. "We're dreaming big and we're delivering...big...We're going to go beyond what has ever been done before, let me show you how.

What you just saw is all possible today with Dreamcast. What made that possible is Dreamcast's revolutionary and evolutionary technology. Dreamcast is the first Internet gaming console. Dreamcast is built for change. It can grow, change and evolve with the gamers' needs, demands and wants. Dreamcast is expandable and upgradable with more than just peripherals. Not only is the operating system built for constant change, the large system memory we have given Dreamcast allows for Internet downloads of information that can enhance the performance of the machine or the games played on it.

In a word, Dreamcast is as alive as the games you develop. The games can live much like you do. They can learn your strategies, learn your style and grow from it.

Now, let me tell you how Sega is going to support you in creating your games. We will provide you 360-degree support for your Dreamcast titles. You will have dedicated account people to keep things right on track. Your engineering group can contact our engineering group 24 hours a day. You will have your choice of development environments to speed development.

Dreamcast development tools support extremely fast graphics, audio, digital video, network- gaming, and high-bandwidth peripheral input. That high-bandwidth opens doors to true force feedback or other new gaming devices we may have not even conceived of yet, but are hidden in the back of your minds. At Sega we talk to people like you - to find out what you need. And what is the one thing that always tops your wish list? More RAM. Dreamcast's dedicated 26 megs of memory are unsurpassed in the video game industry. No longer will you have to use lower-quality 3D models or steal memory from audio to create the graphics of your dreams. Dreamcast's proprietary GD-ROM allows for bigger better games on one disc. Imagine what you can do with more than one gig of storage. Whole new worlds will open up for you and your creations. Again, Dream Big.

Many people have asked us why we have not built a DVD into Dreamcast. It is a simple question of economics. History tells us that most consumers will not buy a $350 video game machine. And most won't buy game software that costs $125. Does Dreamcast have DVD in its future? Absolutely. When DVD reaches a comfortable price point for consumers and developers. That's when we will add DVD to Dreamcast.

Another unique Dreamcast feature is the Visual Memory Unit. This also opens new doors to you by expanding the gaming experience beyond the home. You can now create games that capitalize on the VMU's portability. Gamers can save characters or special plays and swap them with other Dreamcast gamers. They can take games and characters to a friend's house or to a local arcade. The VMU also means that you can create mini-games that enhance and extend standard gameplay elements. These games within games might take many forms. For example, a player might store a character in the VMU to teach it secret moves or new fighting techniques. Those moves could be later put to use on the console or on the Internet. The possibilities are nearly endless with the VMU. It's up to you, the developers, to dream big with this new capability.

I want to share with you now another example of Dreamcast's ongoing evolution and growth. When Dreamcast launched in Japan last November, it shipped with a 33.6K modem. Since the launch, just four short months ago, we have been able to develop new, inexpensive modem technology that allows us to bring a 56K modem to the Dreamcast available for its US launch this fall. This modem upgrade is a prime example of how Dreamcast can grow to meet developers and gamers' needs.

Dreamcast's Network functionality gives supreme flexibility to game development. Whether it be a game with Internet options or upgrades, or a game that lives entirely on the Internet, there is no limit to what can be done in the online environment. The Internet component of Dreamcast means that the game you develop will have a longer shelf life. Do you want to add a character, a plot twist or some new set of powers? If you put them on the network, players will come.

Now let's talk about the arcade. This year, we have seen an industry first. A game, from its inception, created for a home console first, then taken to the arcade in picture perfect form. Ladies and gentleman, allow me to show you Power Stone from Capcom.

The significance of this game can not be denied. It clearly displays the power of the Dreamcast technology - perfect translations of arcade to home games and home to arcade games. Dreamcast's arcade technology is called Naomi. Based on the same architecture as the home unit, Naomi fully realizes the arcade experience in the home. Translations are seamless and exact. All the details from the original remained intact, no skimping on backgrounds, audio or game features. It is something never before realized on a video game console. And don't think that because Naomi games are based on a home console that they will under perform, when stacked up against arcade technology.

Dreamcast itself pushes more polygons than Sega's own Model 3 arcade board, has a faster frame rate and more dynamic audio. Play House of the Dead 2 in the arcade and let me know what you think. My email address is Bernard.Stolar@sega.com.

For the launch of Dreamcast this fall, we will have 10 to 12 first and third party games in all the popular genres. Those titles will include games like Sonic, VF3, CART, Football, Basketball, House of the Dead 2 and Geist. Sega has an in-house development team of more than 3,000 people hard at work right now. They are creating games that push the limits of the system. In Japan, North America and Europe, industry legends such as Naka, Suzuki and Mizagauchi are creating landmark software for Dreamcast.

They are in good company with an outstanding list of third party publishers. Already we have announced Acclaim, Accolade, Capcom, GT Interactive, Hasbro Interactive, Interplay, Microprose, Midway, Mindscape, Namco, Take 2 and THQ. Even our arcade rival Konami has pledged support for Dreamcast. Right now, worldwide, there are more than 100 companies developing games for the system. At launch, look for Mortal Kombat 5 and Ready to Rumble from Midway, Castelvania from Konami, PowerStone from Capcom and Soul Calibur from Namco.

My commitment to you, retailers and ultimately, consumers, is that every Dreamcast title will be breakthrough.

To give you a taste of the quality that we expect for Dreamcast, let me show you two of our first-party titles for Sega Sports. Both are created by Visual Concepts. You will be able to see from the following footage the amazing level of detail the game designers were able to achieve using Dreamcast.

We view Dreamcast as being alive. It is a living organism that can grow as the player grows. Our technology is so advanced it lets developers create games that can actually adapt to the user, creating unique experiences that involve all of the player's senses. Dreamcast has the ability to learn your moves, learn your strategies and tactics, and use them against you.

When you are looking at this tape, notice how true to life the movements are, notice the realism and authenticity of the facial expressions, and notice the details. All of these elements ultimately change the consumers' gaming experience and they are only possible on Dreamcast. Let's roll Dreamcast Football and Basketball.

I can tell you that retailers believe Sega will recapture market share. We have been on the road for months speaking with the likes of Toys R Us, Wal Mart, Target, Babbages, Best Buy, EB, Sears and KB. They are all committed to the system.

Dreamcast will be in 15,000 to 20,000 storefronts by Christmas this year. In fact, retailers are already responding to the consumer demand for Dreamcast. Our top retailers tell me they expect to sell anywhere from 250,000-300,000 Sega Dreamcast units prior to launch via pre-orders. In comparison, the Sony Playstation sold only 100,000 units before it shipped in 1995.

Retailers are telling me they believe we will have the largest opening weekend in terms of sales this industry has ever seen. And, with our planned in-store presence, promotions and advertising, Dreamcast is on track for the biggest retail launch in North America.

I can tell you that consumers can't wait for this system. Already, with a launch still months away, the media and gamers are creating a tremendous buzz for Dreamcast and its games. So far this year, Business Week, Newsweek, USA Today, US News and World Report, and the Los Angeles Times have called Dreamcast "The product to watch in 1999". The gaming books all agree.

And, the competitors seem to agree that Dreamcast is the one to watch. In fact, some of our competitors are already so threatened by Dreamcast that they are rushing to make announcements about their next system...As BusinessWeek magazine wrote last week and I quote, "These are desperate times at Sony. Dismayed by the warm reception that rival Sega Enterprises is getting for its Dreamcast game console; Sony set up a roadblock on March 2nd. The event had all the marks of a rushed technology announcement. If this were software, the word "vaporware" might spring to mind."

At Sega we put together the hardware to deliver the ultimate gaming experience. But it is up to the developers to deliver on what gamers of all ages want and more importantly, never thought possible.

I would like to close with a look at the future of video gaming. I would like to present to you what happens when you develop for Dreamcast and you Dream Big. This is Shenmue a game coming soon to Dreamcast.