Sega's revolutionary games console with Internet access has been officially launched in Europe.

Chris Nuttall: Sega has only a short time to establish market share

But the machines will not go on sale until 14 October due to network problems.

The Dreamcast console was paraded at a showbiz extravaganza at London's Commonwealth Institute on Sunday, just down the road from where its Sony and Nintendo rivals were exhibiting at ECTS - the largest games trade fair outside the US.

Emphasing the importance of the success of Dreamcast to the company, Sega's president, Shoichiro Irimajiri, had flown in for the launch from Japan, where more than 1m units have already been sold.

Virtual world of gaming

He told the audience the European market was a difficult one because of its PAL TV system, multilingual nature and different networks.

"But still, success in Europe is very very crucial for us. Our ultimate goal is establishing a kind of virtual world to be connected to game play," he said.

A console for the weekend sir?

The game will be launched in the US on 9 September, where 300,000 consoles have already been pre-ordered and the Sega president predicted 1.5m could easily be sold in the first year.

Sega appears to have staked the company on Dreamcast after the expensive failure of its bug-ridden Saturn console, which kept it out of the market for two years.

It now has a window of perhaps a year to grab market share before Sony and Nintendo leapfrog it with even more advanced consoles.

Datamonitor analysts predict Dreamcast will do well until Playstation II and Nintendo Dolphin arrive. By 2003, they predict the market will be worth $12bn, but Dreamcast will have only 2% of that with Sony and Nintendo dividing up the rest of the revenues.

Huge launch budget

Sega is therefore pouring huge resources into the launch to try to defy the odds. The promotional budget is the biggest ever for a console in Europe, the target is 1m units to be sold by next summer, 100 plus games released and a 90m Euro investment.

European Marketing Director Giles Thomas said the Dreamcast had 12 times the processing speed, 13 times the memory capacity and 15 times the graphics power of Playstation - the market leader with more than 30m units sold in the US and Europe.

With its capacity to surf the Web, play online and send e-mail, Dreamcast was taking gaming into a new era, he added.

Sega Europe's Chief Executive, J-F Cecillon, said online gamers would be connected through subscription-free Internet Service Providers (ISPs) in Germany, the UK, Spain and France initially, with plans to extend this to the whole of Europe by next summer.