Earlier this week, Sega Enterprises' chairman Isao Okawa entertained a group of educators and journalists during an Okawa Foundation presentation at San Francisco's Ritz Carlton Hotel. While the event was ostensibly built around an awards presentation of ten US$10,000 grants to various US-based educators for their work in the area of information and telecommunications, Mr. Okawa - who funds the foundation and is also the chairman of the CSK Corporation - took the opportunity to give a full-fledged presentation of the Dreamcast console. He also divulged some news pertaining to its Japanese launch on November 27.

　　So while a peach-hued room of puffy chairs and scurrying waiters with trays of wine and bacon-wrapped wieners awaited, a motley crew of game journalists was top Dreamcast titles led by Sonic Adventure, along with PenPen TriIcelon, Virtua Fighter 3tb, and Godzilla Generations

　　Okawa first introduced his foundation to us all and made some quite generous comments about paying a debt of gratitude to those educators who work with children and in the field of information technology. Okawa said he wanted to be known as more than just a seller of games. And he explained that this was the first year in the foundation's ten-year history that included in its roster of recipients non-Japanese scholars. But before the Foundation's award ceremony, it was time for a little fun and, with apologies to Okawa-san, a presentation of the Dreamcast and a short list of games, games, games Sega would soon be selling, selling, selling.

　　Actually, the presentation itself was little more than what the EGM editors who traveled to the Tokyo Game Show were exposed to. But after various earnest Sega Enterprises employees navigated through a dozen or so business charts and even though a few games, I was able to sit with the already relaxed Okawa in one of the puffy chairs. I tried to gauge his level of confidence as Sega Enterprises launches the Dreamcast into what every newspaper and radio broadcast calls a "crisis" economy. At every turn, Okawa was very cool.

　　"The economy isn't as bad as you think." Okawa assured me. "Americans are thinking the situation is worse than it is. In Japan, the fundamentals are still strong - even compared to the American economy. Our balance of trade is strong - and in Japan, production of goods is strong. However, real estate and stocks are suffering."

　　I asked Okawa about the tendency of the Japanese to save - to the point of stifling economic growth. And more to the point, who's going to have the disposable income in Japan to buy the 29,800 yen Dreamcast?

　　Okawa said the Japanese save when they are nervous about the future, but that now, the Japanese have a bright outlook on the future. "If the Japanese see the future as one of being strong, they will spend." I didn't notice until later that evening that in Sega's current annual report are the words: "In Japan, however, the current market can hardly be called robust; the ongoing economic slump has chilled consumer spending tremendously." (italics added)

　　Okawa said he was looking toward sales of four to five hundred thousand consoles out of the gate. He said demand is there (in Japan) for a million units, but manufacturing shortages will limit distribution to half that through the end of '98. He thinks all units delivered to retailers will sell through to consumers. As to whether he was nervous about Nintendo's launch of Zelda 64 or a possible flank attack by Sony - in the form of major PlayStation 2 announcements around the time of the Dreamcast launch - Okawa-san referred me to one of his colleagues, the artsy-looking executive vice president of Sega Enterprises, Mr. Hirose, who commented at length about the threat from Nintendo and Sony.

　　"Regarding Nintendo," Mr. Hirose said, "from a quality point of view, they've got the number one software. The problem is that the shipments of the N64 are only 2.5 million units - and I don't think that Zelda will generate new hardware demand. I think that, yes, a portion of the users will buy Zelda, but these past two years, Nintendo is very low key. The main focus today is skewed toward Game Boy Pocket, and soon they will start to sell Color Game Boy. If I were a kid and had some money, my choice would be to buy a Color Game Boy with software or, if I already have an N64, to buy Zelda."

　　Obviously, Hirose thinks Nintendo will not offer the sort of holiday competition one need lose sleep over.

　　"Regarding Sony, I'm very doubtful they will announce a new generation machine before Christmas. It would hurt their own business. If I were Sony, I would announce their new machine around February as this will be the first tough time for Sega - as February is typically a low-demand month, so we have to drive demand. So Sony may announce its new machine around then . If they make an announcement around the end of November or early December, it will kill their software sales."

　　Sega brass was uniformly optimistic, thinking that their Dreamcast console in Japan will squeak in between the ever-weak N64 and the still-unannounced PlayStation 2. We'll see how smart Sega is in the coming weeks. In a peach-hued room, it's easy to see the world through rose-colored glasses.