I wouldn't place the Dreamcast in the same generation of PSX and N64. T
The "three" of that era/generation were Saturn, PSX and N64, which all came out in 95/96 in the US/EU. The Dreamcast came out in 1999 in the US so, 3 years after the N64, and it was like a whole new generation, hardware was progressing very fast back then ( the first Voodoo card came out in 1996 ) and, fact the DC was the first home console that moved away from the usual 320x240 or so resolution since the 8 bit era, was a clear sign it was a "next-gen" hardware when it came out.
DC really belongs more to the PS2/Xbox/Gamecube era ( all 480p-ish ), but it was destroyed by the hype surrounding the release of the PS2 and clearly, lots of developers didn't had much faith in Sega, after the Saturn ( and the 32X ).
I know the DC quite well ( I have two of them... ) and there were quite a bit of great games other than those two, for example:but I only remember Crazy Taxi and Skies of Arcadia as being really fun to play.
Marvel vs Capcom
Phantasy Star Online (an online MMO on console, I played it to death, with the BB adapter! )
Jet Set Radio
Metropolis Street Racer
Resident Evil Code Veronica
Power Stone 2 ( that was a lot of fun, especially in 4 people )
Dead or Alive 2
The DC wasn't so difficult to develop for, because it could run Windows CE, so developers could choose to use the familiar DirectX without worrying too much about the strange tile rendering.Between the low console sales and the different approach to 3D (it used tile rendering), not very many devs risked writing for it.
I think the main problem for Sega getting developers on board (the most striking absence was EA) was:
- the Saturn was perceived as a failure, which came after an even bigger fail, the 32X
- there was just too much anticipation and pre-release hype for PS2.
- Microsoft, who worked with Sega on the Dreamcast ( it ran Windows CE ), was right there waiting for Sega to fail and basically took all the best ideas from the DC, like the Ethernet connection on connected console, the embedded Windows, the controller layout, to do the Xbox, which came only few months after the DC was discountinued.
In fact, I think that more than the PS2, it was the original Xbox that really killed the Dreamcast. With Microsoft being able to lose money indefinitely, and Sony unstoppable and Nintendo still always profitable, even with the Gamecube, the market really couldn't sustain 4 console makers so, the weakest had to go, and it was obviously Sega.